Pentagon’s Office of Strategic Capital offers Neros a $450 million conditional loan to build Archer drones in the US

The Office of Strategic Capital (OSC) of the US Department of War announced on Monday, November 2, a conditional loan commitment of up to $450 million to Neros, maker of the Archer attack drone, for producing drones and their key components in the United States. The company commits a further $165 million of its own capital, bringing the total project to $615 million.

The money is earmarked for the company’s factory in Torrance, California. There Neros plans to produce complete drones and ground-control systems, as well as their components: motors, flight electronics, radios, sensors and batteries. The OSC says the factory will supply NDAA-compliant components to other American and allied drone makers, with the aim of reducing their dependence on foreign-made parts. The department’s announcement is accompanied by Neros’s own press release.

What the OSC and Neros say

OSC director David Lorch said Neros has already proved it can design, build and deliver small unmanned aircraft and that the OSC investment will give a strong boost to its ability to produce drones and the components critical to them. Senior investment director James Sanahan said the US must produce complete drone systems at competitive prices, for military and non-military uses.

Neros chief executive and co-founder Soren Monroe-Anderson said the capital puts the company “on track for one million drones a year by 2028”. In August Neros was building about 1,200 drones a week. The company’s website says the deal gives the American taxpayer an ownership stake, while the OSC announcement refers to a conditional loan provided alongside private capital and does not mention a government stake. Before the funding is finalised, Neros must still satisfy financial, legal, technical and investment conditions and pass due diligence. The interest rate and term of the loan have not been made public.

The Archer and the Drone Dominance programme

Neros was founded in 2023 by former drone-racing pilots Soren Monroe-Anderson and Olaf Hitshue. The Archer is an FPV attack quadcopter, flown with video goggles and crashed into its target. It has a range of about 20 kilometres, carries a 2-kilogram payload and costs about $2,000 without the warhead. It contains no Chinese components and has been approved under the Pentagon’s Blue UAS programme. The company’s first big contract was for 6,000 FPV attack drones for Ukraine in early 2025. The US Marine Corps has made the Archer a programme of record for single-use FPV attack drones, the Army awarded a contract worth up to $500 million in July, and in September the Department of War ordered 14,000 drones after the company finished near the top in both categories in the second round of the Drone Dominance competition (Gauntlet II).

It is the OSC’s second big loan to a drone manufacturer this year. On July 31 the office offered up to $820 million to Performance Drone Works of Huntsville, Alabama, for mass production of components.