Merlin the magician had a few tricks up his sleeve, but Merlin Labs just made an $800M pre-money valuation appear.
On Thursday, the Boston-based aviation autonomy startup announced plans to go public next year through a Special Purpose Acquisition Company (SPAC) led by Inflection Point Asset Management.
The deal, which is expected to close in early 2026, includes over $125M in committed Private Investment in Public Equity (PIPE) capital, $78M of which was already funded at signing.
Merlin’s magic: Merlin makes takeoff-to-touchdown AI-powered flight autonomy software paired with onboard hardware. Their flagship Merlin Pilot product serves as the primary pilot with human supervision, taking on aviation, navigation, and communication duties on fixed-wing aircraft.
In the increasingly crowded aviation autonomy space, Merlin has notched some major wins, including:
- Winning a $105M contract with USSOCOM to put Pilot on the C-130J Super Hercules cargo aircraft last summer.
- Partnering with Honeywell to bring autonomy to a wider range of aircraft last October.
- Securing airworthiness approval from the Air Force for Pilot’s use on the KC-135 Stratotanker before winning a contract to make them autonomous last December.
- Being selected as one of six startups in Northrop Grumman’s Beacon autonomy testbed ecosystem last month, alongside Applied Intuition, Red 6, and Shield AI.
Living in the moment: “One of the things that’s allowed us to build such a big lead over all of those companies in the space has been our focus on delivering incremental autonomy that’s useful today, not just 10 years from now,” Merlin co-founder and CEO Matt George told Tectonic. “For us, our focus has been on the legacy systems.”
That focus on existing systems, rather than building entirely new aircraft, has also helped them make some big progress on FAA certifications. Their Remote Data Concentrator (RDC), which feeds aircraft sensor data into Merlin’s Pilot platform, got FAA authorization in March.
Money, money, money: This SPAC deal, according to Merlin, will help them deliver on their big-dollar contracts, especially that $105M one for the C-130J, and put some extra money in the bank for acquisitions. “Our first move is investing behind our customers,” George said. “We have some very large programs that we’re working on, so our focus is going to be making sure that we get those right.”
Merlin’s also betting that their new friends at Inflection Point can replicate the SPAC success they had with USA Rare Earth and Intuitive Machines. “We evaluated a number of different options, including staying private and the more traditional IPO pathways, but one of the things that stood out with Inflection Point was their focus on frontier technology,” George said. “Two previous companies that they’ve taken public are all trading at multi-billion-dollar valuations.”
Hopefully he didn’t jinx Intuitive Machines, because the space company’s share price tanked 15 percent yesterday.
But ultimately, it’s all about the money, honey. “By working with Inflection Point, we were able to put a bunch of money on the balance sheet in advance of the IPO,” George said. “That’s been really cool and really important, and it was a big part of the reason why we’re going public.”