New factories across US, Europe, Israel to target growing missile demand

Covenant, a Washington-based defence startup backed by investors including US technology billionaire Peter Thiel’s Founders Fund, is preparing to manufacture long-range weapons at facilities in the United States, Germany and Israel as it seeks to challenge established players in the Western defence industry.

The company has emerged from two years of operating in “stealth mode” and is now publicly presenting its Anthem “deep strike” munition, according to comments made by co-founder and chief executive Michael Kaufman to the Financial Times.

Anthem is being developed as a lower-cost alternative to weapons such as the US-made Tomahawk cruise missile, which can strike targets at ranges of up to 1,600km but costs several million dollars per unit. Tomahawk supplies have also come under pressure amid production constraints and the war in Iran.

Kaufman said Covenant was “relentlessly focused on two things: low cost and high producibility” by relying on readily available components. The company’s objective, he said, is “to deliver deep precision-strike solutions for Europe, the US and allies”.

Covenant has already acquired manufacturing sites in Dallas and Leipzig, while establishing a third facility in Israel. Production at all three locations is expected to start early next year.

The company plans to manufacture 1,000 Anthem missiles annually at each of its US and German facilities in 2027. From 2028, it aims to raise output at both sites to 5,000 missiles per year.

Each missile is expected to be priced in the “mid six-figure” euro range, making it significantly cheaper than Tomahawk missiles, which are reportedly sold to foreign governments for about $4 million to $6 million each.

Covenant’s entry into the defence market comes as the US and its allies in Europe and the Indo-Pacific seek to expand their inventories of long-range strike weapons amid growing security concerns.

The Financial Times reported that the war in Iran under US President Donald Trump has sharply reduced American Tomahawk stocks. The missiles are currently manufactured by Raytheon at a rate of around 60 per year, although the US defence company agreed last month to a $23 billion deal with the government aimed at increasing annual production to 1,000 missiles.

As the US journal writes, European governments are likewise seeking to acquire or develop ground-launched long-range weapons capable of reaching targets in Russia from European territory, after relying heavily on the US for such capabilities for decades.

Kaufman, a 36-year-old US-Israeli citizen, founded Covenant in 2024 after previously working at Thiel’s hedge fund, Thiel Macro, and his private investment firm, Thiel Capital.

His co-founder, Ofir Dayan, previously served as the chief systems engineer for Israel’s Iron Dome air defence system, developed by Rafael Advanced Defense Systems.

By Nazrin Sadigova