Defense manufacturing startup Hadrian on Thursday announced the closing of $260 million Series C funding round led by Peter Thiel’s Founders Fund and Lux Capital.

The machine parts company said it will use the funding to build a new 270,000 square foot factory in Mesa, Arizona, and expand its Torrance, California, location as it looks to beef up its shipbuilding and naval defense capabilities.

“What we really need in this country is this quantum leap above China’s manufacturing model,” said CEO Chris Power in an interview with CNBC’s Morgan Brennan. “It’s about supercharging the worker versus replacing them.”

Defense tech startups like Hadrian are disrupting the mainstay defense contracting industry, which is led by leaders such as Northrop Grumman and Lockheed Martin, and battling it out to boost U.S. defense production while scooping up Department of Defense contracts.

Hadrian said the Arizona space will be four times the size of its California facility and start operations by Christmas. The factory will create 350 local jobs. The Hawthrone, California-based company said it is working on four to five new facilities to support production over the next year to support Department of Defense needs.

Hadrian said it uses robotics and artificial intelligence to automate factories that can “supercharge American workers.”

Power said demand is rapidly growing, but the lack of U.S.-based talent is a major hurdle to building American dominance in shipbuilding and submarines.

Using its tools, the company said it can train workers within 30 days, making them 10 times more productive. Its workforce includes ex-marines and former nurses who have never set foot in a factory.

“We have to do a lot more … but certainly we’re able to keep up with the scale right now, and grateful to our team and customers for letting us go and do that,” he said. “As a country, we have to treat this like a national security crisis, not just the economics of manufacturing.”

The fresh raise also includes investments from Andreessen Horowitz and new stakeholders such as Brad Gerstner’s Altimeter Capital.

The company closed a $92 million funding round in late 2023.

WATCH: Startup Hadrian raises $260 million to expand its AI-powered factories to meet soaring demand

Founders Fund, the venture capital firm run by billionaire Peter Thiel, has closed a $4.6 billion late-stage venture fund, according to a Friday filing with the Securities and Exchange Commission.

The fund, Founders Fund Growth III, includes capital from 270 investors, the filing said. Thiel, Napoleon Ta and Trae Stephens are the three people named as directors. A substantial amount of the capital was provided by the firm’s general partners, according to a person familiar with the matter.

Axios reported in December that Founders Fund was raising about $3 billion for the fund. The firm ended up raising more than that amount from outside investors as part of the total $4.6 billion pool, said the person, who asked not to be named because the details are confidential.

A Founders Fund spokesperson declined to comment.

Thiel, best known for co-founding PayPal before putting the first outside money in Facebook and for funding defense software vendor Palantir, started Founders Fund in 2005. In addition to Palantir, the firm’s top investments include Airbnb, Stripe, Affirm and Elon Musk’s SpaceX.

Founders Fund is also a key investor in Anduril, the defense tech company started by Palmer Luckey. CNBC reported in February that Anduril is in talks to raise funding at a $28 billion valuation.

Hefty amounts of private capital are likely to be needed for the foreseeable future as the IPO market remains virtually dormant. It was also dealt a significant blow last week after President Donald Trump’s announcement of widespread tariffs roiled tech stocks. Companies including Klarna, StubHub and Chime delayed their plans to go public as the Nasdaq sank.

President Trump walked back some of the tariffs this week, announcing a 90-day pause for most new tariffs, excluding those imposed on China, while the administration negotiates with other countries. But the uncertainty of where levies will end up is a troubling recipe for risky bets like tech IPOs.

SpaceX, Stripe and Anduril are among the most high-profile venture-backed companies that are still private. Having access to a large pool of growth capital allows Founders Fund to continue investing in follow-on rounds that are off limits to many traditional venture firms.

Thiel was a major Trump supporter during the 2016 campaign, but later had a falling out with the president and was largely on the sidelines in 2024 even as many of his tech peers rallied behind the Republican leader.

In June, Thiel said that even though he wasn’t providing money to the campaign for Trump, who was the Republican presumptive nominee at the time, he’d vote for him over Joe Biden, who had yet to drop out of the race and endorse Kamala Harris.

“If you hold a gun to my head, I’ll vote for Trump,” Thiel said in an interview on stage at the Aspen Ideas Festival. “I’m not going to give any money to his super PAC.”

WATCH: Anduril founder Palmer Luckey talks $32 billion government contract