Covenant unveils Anthem and a Saxony plant aiming for 5,000 cruise missiles a year

A two-year-old U.S.-Israeli defense company confirmed a cruise-missile factory in Saxony on Wednesday and said German-built Anthems will start reaching a European customer in the first quarter of 2027. Covenant’s missile is pitched at the cheap, high-volume end of deep strike: a payload above 200 kilograms, a full-rate price in the mid-six figures, and a German run rate of 5,000 a year by 2028, matching a Dallas line that opened the same day.

What Wednesday put on the record

Covenant was founded in 2024 by Michael Kaufman, an American-Israeli entrepreneur, and is based in Washington, with more than 200 employees across the United States, Germany, and Israel. It said it has raised more than $250 million across three rounds from Andreessen Horowitz, Founders Fund, Lux Capital, 8VC, Aleph, and Lightspeed. Reports in late August had already sketched a Leipzig-area production plan. Wednesday’s unveiling put a name, a payload, a price target, an order book, and a Dallas opening on that project. The company still did not publish a range.

Anthem uses a solid rocket motor for launch and a heavy-fuel jet engine in cruise. Covenant said it has flown the missile more than 200 times in the past year. In a fight, the company said, Anthem would be used in high volumes alongside existing long-range weapons such as RTX’s Tomahawk and Lockheed Martin’s JASSM.

Kaufman’s argument is about inventory, not elegance. “When you look at our adversaries, you see thousands of hardened targets, beyond the range of current capabilities,” he said. “Anthem was built to credibly hold those targets at risk in a prolonged conflict. If our stockpiles run thin, so does our deterrence.” Former U.S. Deputy Secretary of Defense Kathleen Hicks, named as a Covenant advisor, said the design lines up with the Pentagon’s Replicator push for affordable systems in volume. Abby Denburg, the company’s president and chief growth officer, was blunter: “Now the measure of our success is execution.”

Saxony’s Anthem line and German export law

Denburg said the German line is already on a production contract, with Anthems due off that line in the first quarter of 2027: about 1,000 missiles from Saxony in the next year, and about 1,000 from Dallas. Kaufman put the German ambition higher. The Saxony plant’s aim, he said, is to reach 5,000 missiles by 2028, or at least a 5,000 run rate during that year. Dallas, which opened Wednesday, is scheduled to begin serial production in the first quarter of 2027 and ramp toward the same 5,000-a-year mark.

Kaufman said the Saxony line has no reliance on the United States. “Less than 5% of the bill of materials comes from anywhere outside of Europe, and our goal is to get that down to zero.” That is aimed at European buyers looking for a missile whose parts are sourced on the continent.

Germany’s War Weapons Control Act requires a federal license to manufacture missiles on German soil. The Economics Ministry licenses commercial production; the Federal Office for Economic Affairs and Export Control, BAFA, monitors the plants and licenses exports. In late August, when the Leipzig-area plan first surfaced, the German defense ministry declined to comment. It has not confirmed a production license or a Bundeswehr order since. Covenant has secured one European contract, is in talks with others, and has not named the customer; it said some buyers restrict public disclosure. German-built Anthems sold onward would still need a German export license. A nearly European bill of materials does not write that license.

The order book is about $150 million, covering qualification, research and development, and multiple production contracts, with more awards expected before year-end. Covenant said it has an Other Transaction Agreement with the U.S. Army for an accelerated test-and-qualification program, and a contract with the U.S. Navy’s Rapid Capabilities Office, valued at roughly $70 million, to adapt Anthem into a maritime variant. U.S. Army deliveries are expected in 2027. Revenue, the company said, should start that year as deliveries ramp. That is also the first date at which the production claims become checkable.

The first test is propulsion. Covenant said it avoided sole-source suppliers, lining up three solid-rocket-motor providers with a fourth in the works, and locking in long-term agreements for more than 4,000 jet engines over the next two years. Those agreements sit under the first-year plan. They do not cover a 5,000-a-year German run rate, let alone that rate in Germany and Dallas at the same time. The company has not said how engine supply scales once the two-year agreements run out.

The 2027 gap Europe is already trying to fill

Covenant is aiming at a hole European governments have already described in public. On July 8, Downing Street said twelve countries plan to spend more than $50 billion over the next ten years on deep-precision-strike weapons able to hit targets from 300 kilometers to beyond 2,000 kilometers. The same week, German Chancellor Friedrich Merz said Germany would buy U.S. Tomahawk cruise missiles and station them on German soil, an off-the-shelf bridge while European systems mature.

The European alternatives sit on a slower clock. On December 18, 2025, TAURUS Systems, the MBDA-Saab joint venture, signed a German contract to prepare serial production of TAURUS NEO, the updated version of Germany’s existing air-launched cruise missile; the company spoke of “large numbers” and did not state an annual rate. France, Germany, Italy, Poland, Sweden, and the United Kingdom have folded their longer-range work into the European Long-Range Strike Approach, which ministers moved into implementation groups in June. The UK-Germany deep-strike piece is meant to deliver a family of stealth cruise and hypersonic weapons beyond 2,000 kilometers in the 2030s. NATO’s broader Hague pledge, 5% of GDP on defense by 2035, funds the budget backdrop. It does not specify a cruise-missile buy.

Incumbent output is the comparison Covenant wants. RTX’s Tomahawk remains the Western reference for a 1,000-mile-class land-attack cruise missile; the company currently builds about 60 a year and in August won a seven-year U.S. Navy contract to ramp above 1,000 a year. Lockheed Martin is under multi-year U.S. Air Force contracts to raise JASSM and LRASM production into the thousands; it has not published a single steady-state annual rate. Kongsberg is adding Naval Strike Missile and Joint Strike Missile capacity in Norway and, by 2028, in the United States, without a current public unit rate that can be set beside 5,000. MBDA has said it is lifting output of Aster, Storm Shadow, and Meteor, again without a Storm Shadow annual figure on the record. Against that fog, a German line claiming 5,000 a year by 2028 is unusually specific.

The company is private. If you hold a defense ETF, you do not hold Covenant; you hold Lockheed Martin, RTX, and the European groups that still make the missiles NATO actually fires. Whether the Saxony factory takes share from them is a 2027 question. Until missiles leave the building, the listed defense book is still long the companies Covenant says it can undercut.