Shield AI agrees to buy Kirkland's Echodyne for up to $5.3 billion

Shield AI said Thursday it has agreed to acquire Echodyne, the Kirkland radar maker spun out of Intellectual Ventures in 2014, in a transaction valued at up to $5.3 billion. GeekWire reported the deal is believed to be the second-largest acquisition of a private venture-backed company in Washington state history, behind Okta's purchase of Auth0. Shield will pay $4.8 billion at closing, with up to $500 million more if Echodyne hits performance targets. The companies expect the acquisition to close in early 2027, pending regulatory approvals.

To help pay for it, Shield is raising $2.5 billion, including $1 billion in new Series H funding at a $28.8 billion post-money valuation, more than double the $12.7 billion valuation it reached in March, plus $1 billion in structured equity from Blackstone-managed funds and $500 million in debt led by JPMorgan. Echodyne has about 400 employees and makes compact solid-state radars used in counter-drone and security systems in more than 40 countries. No layoffs are planned, and CEO Eben Frankenberg will stay in that role, reporting to Shield CEO Gary Steele. Echodyne's Woodinville factory and Kirkland base remain in place.

Echodyne raised about $200 million in total, with Bill Gates and Madrona among early backers. Madrona's Tim Porter called Seattle a real defense-tech hub. Shield already plans to build its X-BAT autonomous fighter in Des Moines, Wash., and says the deal is its fifth and largest acquisition.