Neros raised a $35 million Series A round in March 2025 led by Vy Capital, with participation from Sequoia Capital, Interlagos Capital, D3, and angel investor Keller Rinaudo Cliffton (CEO of Zipline). This follows a $10.9 million seed round in May 2024 led by Sequoia Capital.

The company has raised a total of $45.9 million across two funding rounds. Other key investors across its funding history include Peter Thiel, A*, Long Journey Ventures, and BoxGroup, with Sequoia partner Shaun Maguire leading the seed investment.

Neros' flagship product is the Archer, a First-Person View (FPV) military drone system designed specifically for precision strikes in contested environments. The system consists of two main components working together: the drone itself and the Crossbow ground control station.

The Archer drone is a compact 8-inch aircraft weighing just 2-3 pounds empty but capable of carrying a 4.5-pound payload (typically explosives) up to 12 miles away. It's roughly the size of a dinner plate with propellers extending outward, making it easy to transport and deploy.

The Crossbow ground station is what operators use to control the drone. It includes a video screen showing the live camera feed from the drone, specialized radio equipment, and control sticks similar to video game controllers. What makes this experience unique is how immersive it feels—operators describe it as feeling like they're actually flying rather than remotely controlling a device.

Military personnel use the system by first unpacking and powering on the Crossbow station, then preparing the Archer drone with the appropriate battery (different options exist depending on whether the mission prioritizes range or payload capacity). The drone is hand-launched by simply tossing it into the air.

Using the control sticks while watching the live video feed, operators can pilot the drone toward targets up to 12 miles away. Upon reaching the target area, they use the video feed to identify and confirm the specific target, then maneuver the drone directly to hit it. The drone itself becomes part of the delivery mechanism, making it a single-use weapon for strike missions.

Unlike commercial drones, the Archer uses a proprietary multi-band radio system that maintains control even when facing active electronic jamming—a critical battlefield advantage. This technology has shown "very strong results against jamming" in Ukraine, where other drone systems have failed. The system also operates effectively in adverse weather conditions including rain, snow, and high winds.

A key security feature is that Archer is built entirely from non-Chinese components, eliminating vulnerabilities present in systems that incorporate Chinese technology (which dominates the commercial drone market).

Neros operates as a vertically integrated hardware manufacturer that combines core technology development, manufacturing, and direct sales in the military/defense sector. This integration extends across their entire value chain, from design and R&D to production and delivery of military drone systems.

The company employs a B2G (Business-to-Government) go-to-market strategy focused on direct contracting with defense departments, military branches, and government-aligned international coalitions. Their primary channel is securing large-volume contracts from defense agencies, exemplified by their contract to supply 6,000 drone units to the International Drone Capability Coalition for use in Ukraine.

Rather than the typical lengthy marketing cycles common in defense procurement, Neros builds credibility through battlefield validation in Ukraine. This real-world performance data serves as their primary market development tool, demonstrating effectiveness in actual combat conditions that laboratory testing cannot replicate.

Monetization occurs primarily through tiered direct product sales structured in volume-based tiers. Instead of selling standalone drones, Neros prices complete weapon systems including both the Archer drone and Crossbow ground station, with integrated pricing that captures a premium over commodity alternatives while remaining "an order of magnitude cheaper than other small drones on the BlueUAS list."

The company's business infrastructure and pricing model are uniquely built around high-volume production—thousands of units monthly rather than dozens or hundreds annually typical in traditional defense manufacturing. This volume-oriented approach fundamentally reshapes both their cost structure and pricing flexibility.

Securing BlueUAS certification has functioned as a critical go-to-market accelerator, pre-qualifying their products for military purchase and creating a streamlined procurement pathway to U.S. government agencies—a significant competitive advantage in the notoriously complex defense acquisition landscape.

Their manufacturing-first culture permeates the organization, with success measured primarily by the number of systems deployed rather than software metrics or service revenues. This hardware-centric approach contrasts with many defense startups that emphasize software platforms with hardware components.

Established players like General Atomics, Northrop Grumman, Raytheon, and Lockheed Martin dominate the broader unmanned aerial systems market. These companies produce various drone systems, though typically at far higher price points ($500K-$20M per unit) and significantly lower production volumes than Neros targets.

These contractors generally operate on cost-plus procurement models with the Department of Defense, where research, development and manufacturing costs are covered with a guaranteed profit margin added. This creates little incentive for cost control or manufacturing efficiency, resulting in limited production capacity—typically only a few hundred systems annually.

While these companies have vastly larger resources and established relationships with military procurement offices, they've struggled to adapt to the rapid-iteration, high-volume manufacturing model that has proven effective in Ukraine. Their systems also often incorporate components from global supply chains that may include Chinese-origin parts, creating security vulnerabilities.

Newer entrants like Anduril, Shield AI, and Skydio represent more direct competition for Neros in the tactical drone space. Anduril is building a new "hyperscale" production facility in Ohio to mass-produce defense drones, while Shield AI develops AI-powered autonomous drones focusing on intelligent systems that can operate without GPS or communications.

Skydio has secured military contracts but has faced challenges with Chinese battery suppliers and reported vulnerabilities to jamming in Ukraine—precisely the issues Neros has engineered its systems to overcome. Like Neros, these companies were built with venture capital backing and bring Silicon Valley approaches to defense technology development.

AeroVironment, while established longer than the others, operates in a similar space with its Switchblade loitering munition and Puma reconnaissance drone. However, Neros maintains differentiation through its racing-derived expertise in high-performance, reliable FPV systems specifically optimized for contested electromagnetic environments.

Ukrainian and Russian forces now produce drones at massive scale—over one million per year each—mainly using components imported from China. These represent alternative, lower-cost approaches to the same battlefield needs that Neros addresses, though with significant limitations in reliability and performance.

Chinese manufacturer DJI dominates the global consumer drone market with approximately 70% share. While not directly competing for military contracts, their components are widely used in DIY military drones globally, creating security concerns for Western military users.

Lumenier and GetFPV.com represent the professional racing drone ecosystem that Neros' founders emerged from. While primarily targeting commercial and consumer markets, the performance characteristics of their systems have potential defense applications when modified, though without the security hardening and electromagnetic resilience Neros provides.

With Archer now on the BlueUAS list, Neros has unlocked access to procurement across multiple branches of the U.S. military. The company has specifically noted that "the US military is way behind most of the world in using FPV drones, and we want to fix this," highlighting a significant domestic market opportunity.

The U.S. defense budget provides enormous potential for growth as FPV drones become more integrated into military operations. Initial deployments with the U.S. Marine Corps, which has already formed dedicated "Attack Drone Teams" using the Archer system, demonstrate early traction in this expansion pathway.

As military branches witness the system's effectiveness in specific applications like anti-armor operations, fortification neutralization, and mine clearing (where Archer drones successfully removed anti-tank landmines in every U.S. Army test attempt), adoption is likely to accelerate beyond initial experimental deployments.

Beyond the U.S. and Ukraine, significant opportunities exist to supply drones to NATO members and other allied nations seeking to modernize their defense capabilities with unmanned systems. The International Drone Capability Coalition represents an early example of this multi-country procurement approach.

The rising defense spending across Europe in response to regional security concerns creates additional market opportunities, with many countries increasing military budgets specifically for drone capabilities. Neros is positioned to capture this spending with systems already battlefield-proven in Ukraine.

The company's non-Chinese component supply chain provides a particular advantage with allies concerned about technology security, especially as awareness grows about vulnerabilities in systems incorporating Chinese components.

Neros is developing practical autonomy as a core element of its product roadmap, with the ultimate vision of "fully autonomous drone swarms—intelligent, coordinated systems capable of dramatically reshaping defense and security operations." This represents a substantial future market expansion beyond manually-piloted systems.

The company has also begun partnership with Kraken Kinetics to develop "purpose-built, lethal payloads," noting that "the system as a whole is much more performant when the drone and warhead are designed together." This vertical integration into payload systems opens additional revenue streams and market applications.

As Neros continues vertical integration of manufacturing, they could potentially supply specialized components to other defense contractors or allied nations' domestic drone programs. Their expertise in jamming-resistant communication systems and secure control architectures has value beyond their current product line.

Manufacturing scaling challenges: Neros' target of producing thousands of drones monthly requires continuous manufacturing process refinement and capital investment in production infrastructure. The transition from early production volumes to mass manufacturing introduces significant operational complexity, especially while maintaining quality control for military-grade systems and managing a non-Chinese supply chain.

Conflict-driven demand uncertainty: Current high demand is partially driven by the Ukraine conflict; any resolution could potentially reduce immediate market needs while civilian applications remain underdeveloped. The defense procurement cycle is also notoriously unpredictable, with budget priorities shifting based on geopolitical events and changing military doctrines, creating potential volatility in order flow.

Counter-drone technology: As FPV drones become more widespread on battlefields, adversaries are rapidly developing counter-drone systems to neutralize them. These include advanced electronic warfare capabilities, directed energy weapons, and AI-powered detection systems that could potentially reduce the effectiveness of current-generation FPV drones, requiring Neros to continuously evolve their technology to maintain battlefield relevance.