Anduril CEO Not Rushing IPO Amid Market Volatility
Quick Look
- Anduril CEO Brian Schimpf stated the defense tech company is not in a hurry to go public due to current market conditions and high valuations.
- He believes a successful IPO requires investor returns, and a hype cycle is a bad time to launch.
- Despite increased demand for defense tech, the IPO market remains tepid.
AI-generated summary
Why It Matters
Anduril, a defense tech company, is considering an IPO. The defense sector is experiencing high demand, but the tech IPO market is currently tepid.
Anduril CEO Brian Schimpf said the defense tech company is in no hurry to go public given the current market conditions.
"We define a successful IPO as our investors got a good return three years from actually going out," Schimpf told CNBC's Julia Boorstin at the Allen & Co. Sun Valley Conference on Thursday. "A bad time to do that is in the middle of a hype cycle. So we're not in a rush to go out."
Defense tech companies like Anduril are riding a surge in demand for their products and services, fueled by President Donald Trump's military reindustrialization aspirations. Spending on the technology is hitting all-time highs, with the defense budget on track to reach $1.5 trillion.
Still, the tech IPO market remains relatively tepid, even after SpaceX's record offering last month. Shares of Elon Musk's space and artificial intelligence company closed at a high of $201.80 on their third day, but have since lost about a quarter of their value and are trading just above their $150 opening price.
Meanwhile, AI model leaders OpenAI and Anthropic have both confidentially filed to go public, but neither have set a timeline for their IPOs. Some investors are increasingly skeptical of whether the public market would buy in at their current valuations of close to $1 trillion.
Anduril, which makes drones and AI-powered weapons, doubled its valuation in May to $61 billion, becoming one of the most richly valued private tech companies. Schimpf said at the time that the company would "aggressively" invest in scaling defense systems for the U.S.
Defense tech companies Shield AI and autonomous shipmaker Saronic also closed big funding rounds earlier this year.
However, that's not necessarily a good thing, Schimpf said.
"We're seeing crazy high valuations on the expectations of future growth and all of those different things," he said. "I'm not sure that the market is particularly rational on the pricing right now."
As Anduril scales, questions mount over when the shares will finally hit the public market. Founder Palmer Luckey has said he "definitely" aims to IPO, but hasn't set a target.
"I do think a lot of companies are dangerously leading into overvalued territory in a way that could backfire," Schimpf said.
What to Watch
AI outlook — possibilities, not facts
Anduril will likely delay its IPO until market conditions improve.
Likely · Within months
Open Questions
- When will Anduril go public?
- Will other defense tech companies follow Anduril's IPO strategy?
- How will market conditions evolve for tech IPOs?
