Neros gets $450M Pentagon loan to cut reliance on Chinese drone parts

The Pentagon’s Office of Strategic Capital has agreed to lend up to $450 million to Neros, the California maker of the Archer attack drone, to build drones and their key parts in the United States, the Department of War announced on Nov. 2.

Neros said it will put $165 million of its own equity into the project, bringing the total to $615 million. The money will expand production at the company’s factory in Torrance, California, where it plans to build complete drones and ground control stations as well as motors, flight controllers, radios, thermal sensors and batteries. Neros still has to meet financial, legal, technical and due diligence conditions before the money is released, and neither side disclosed the loan’s interest rate, term or schedule.

The Office of Strategic Capital, or OSC, is a Pentagon lending office set up to finance companies in industries the military depends on. It said the goal is to reduce American drone makers’ reliance on foreign-made components and to supply parts that comply with U.S. defense procurement law to other U.S. and allied manufacturers as well as to Neros itself.

“Neros has already demonstrated an ability to design, manufacture, and deliver exceptional small unmanned aircraft systems,” said David A. Lorch, director of the Office of Strategic Capital. “OSC’s investment will turbocharge Neros’ ability to manufacture drones and components critical for the production of drone systems.”

Neros was founded in 2023 by former drone racers Soren Monroe-Anderson and Olaf Hichwa. Its main product, the Archer, is a first-person-view, or FPV, attack quadcopter that a pilot flies through video goggles and crashes into a target. It has a range of about 20 km (12 miles), can carry a 2 kg (4.4-pound) payload and costs roughly $2,000 before a warhead is added. The company builds it without Chinese parts, and it is approved under the Pentagon’s Blue UAS program for drones cleared for military use.

The company’s first big order was a contract to deliver 6,000 FPV attack drones to Ukraine in early 2025. The U.S. Marine Corps has since made the Archer its program of record for FPV one-way attack drones and recently flew it with live warheads in Japan. In July, the U.S. Army awarded Neros a contract worth up to $500 million, and in September the Department of War ordered 14,000 attack drones from the company after it placed near the top of both categories in the second round of the Pentagon’s Drone Dominance competition.

“This capital puts Neros on the path to one million drones per year by 2028, and accelerates America toward drone dominance on a global scale,” said Soren Monroe-Anderson, chief executive and co-founder of Neros.

Neros was reportedly building around 2,000 drones a day by December 2025, with about two-thirds going to Ukraine. The company said its future lineup will include long-range strike drones and interceptors alongside close-range attack drones, and it is already developing a counter-drone interceptor called Bandit.

The commitment is the second large drone loan from the OSC this year. On July 31, the office offered up to $820 million to Performance Drone Works in Huntsville, Alabama, to mass-produce drone components. Both deals support President Donald Trump’s June 2025 executive order on “Unleashing American Drone Dominance,” and OSC director Lorch said in July that several more component makers would receive loans.

There were also reported talks earlier this year about the Pentagon taking direct equity stakes in Neros and other drone makers through the OSC, though neither the Department of War nor Neros mentioned an equity stake in their announcements.