Meet the defense company that’s gotten the Pentagon’s attention

A relatively new drone startup company founded by a champion drone-racing pilot has caught the Pentagon’s attention.The duo of Soren Monroe-Anderson, a prominent drone racer, and Olaf Hichwa, a designer of custom circuit boards for racing drones, founded Neros in 2023. Recognizing the proliferation of small, first-person-view drones during the Russia-Ukraine war, the pair set out to create a new drone, did so, and provided it to the Ukrainians.In the three years since, they have become a leader in manufacturing quadcopters. Neros makes several different types of quadcopters, or small, cheap one-way drones, and they have already tested well in department-led exercises.Last month, the company participated in the Drone Dominance Gauntlet II exercise out in Fort Carson, Colorado. The Neros Archer 5-inch is a highly compact and maneuverable drone designed to operate in confined or indoor environments, and performed best in the close-quarters battle portion of the exercise.The Archer AI quadcopter finished third in the deep strike portion.As a result of where they finished, the Pentagon ordered 8,000 of the Arch 5-inch and 6,000 of the Archer AI. No other defense company finished in the top five of both components of the Gauntlet II exercise. Neros also intends to compete in the Gauntlet III exercise, implementing lessons learned from the first two exercises to make improvements.Some of those lessons learned in Gauntlet II include making it easier to navigate indoors, adding fiber optic control for subterranean operations, and improving the drones’ ability to perform steeper attack-angle descents, Ross Pedersen, Neros’s Head of Growth, told the Washington Examiner.On top of those orders, the Pentagon’s Office of Strategic Capital announced last week that it had agreed to give Neros a $450 million loan to help them expand production and make their supply chains more domestically based.“Neros has already demonstrated an ability to design, manufacture, and deliver exceptional small unmanned aircraft systems,” said David A. Lorch, director of the Office of Strategic Capital and Senior Advisor to Deputy Secretary of War Steve Feinberg. “OSC’s investment will turbocharge Neros’ ability to manufacture drones and components critical for the production of drone systems.”U.S. Marines with Battalion Landing Team 1st Battalion, 1st Marine Regiment, 31st Marine Expeditionary Unit, stage a Neros Archer first-person view drone on Camp Hansen, Okinawa, Japan, Oct. 14, 2026. (U.S. Marine Corps photo by Cpl. Sawyer J. Abbott) Pedersen said the department initially expressed interest but wanted to see their performance in the Gauntlet II exercises, in which they ultimately had success.“Their prime concern is that the components that build these things are widely available, domestically manufactured,” Pedersen explained. “So that’s where the emphasis is coming for us is to onshore production and in house the production of a lot of our components. The one we’re starting with is motors. Our primary motor supplier had been Taiwan, which is obviously much better than China and we’ve been going so far as the rare earth neodymium that makes up the magnets in the motors was not mined in China, it’s mined in Australia.”The department has required defense companies seeking to do business with the U.S. military to decouple their supply chains from China — even though it is one of, if not the top producer of drones — due to concerns that the U.S.’s next major conflict could be against Beijing.Neros’s first in-house-manufactured motor rolled off the production line two weeks ago, and they intend to expand that production. They intend to make those motors available for purchase by other companies as well, in addition to sharing insights into what makes the best motors to improve the entire industry, he said.Pedersen noted that Neros, at its peak, has made roughly 6,000 drones per month, which would amount to 72,000 drones if that rate of production continued for a year.DEMOCRATS SALIVATE OVER PENTAGON OVERSIGHT WITH NEW MAJORITIESIn total, the department anticipates spending $1.1 billion to purchase roughly 300,000 drones across all of the Gauntlet exercises.It’s still less than where the Pentagon wants to be in the long term, but represents progress.“We need to at least buy enough drones across all these different echelons to train with, to start, and that’s not an insubstantial number. If you don’t train on these things, you don’t use them, and so, there are differences of opinion about how many of these things we need, even on the quad side, but it’s measured in hundreds of thousands just to train,” Acting Defense Innovation Unit Director Travis Metz told the Washington Examiner in an interview last month.He expects a handful of drone companies to emerge from the dozens out there hoping for defense contracts to ultimately win out, and the Neros team hopes to be one of the last ones standing.