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Modern warfare is evolving, and Anduril Industries has a plan to capitalize on this shift by reimagining the design and production of American military power.

The defense technology startup recently raised $1.5 billion in a new funding round to scale its weapons manufacturing. The deal, which was co-led by Peter Thiel’s Founders Fund and Sands Capital, values Anduril at $14 billion, nearly double the startup’s valuation after its previous funding round two years ago.

Anduril’s strategy is to increase American weapons manufacturing by replicating the modern techniques and processes employed by commercial powerhouses such as Elon Musk’s Tesla ( TSLA ). In other words, it's using a software-first approach flexible enough to build weapons quickly and at scale.

“What we are doing at Anduril is we are taking the risk up front to build the capabilities and to build the infrastructure that we need to deploy those capabilities very quickly,” Trae Stephens, co-founder and executive chairman of Anduril and partner at Founders Fund, told Yahoo Finance (video above).

“Now is that a bet on ourselves that, once we produce these things, the customer will show up to buy it?” Stephens asked. “Absolutely, but I think that is the way it should work. There should be some risk taken from an industry perspective as well.”

Anduril plans to use the majority of the funds to invest in a new software-defined manufacturing platform and build a new manufacturing facility called Arsenal-1.

The factory is expected to ultimately employ more than 1,500 people, encompass more than 5 million square feet of manufacturing capacity, and produce tens of thousands of weapons, such as counterstrike drones and autonomous submarines, per year.

While the company has not yet determined where the Arsenal-1 facility will be located, it already has experience building out its manufacturing footprint.

In June, Anduril announced a $75 million investment to increase manufacturing and production capacity for solid rocket motors in Mississippi. That same month, the company also announced the opening of a facility in Rhode Island, enabling Anduril to increase production of underwater drones.

Startups like Anduril, which aim to disrupt the American defense industry and take on the "primes" — giants like Boeing ( BA ), Lockheed Martin ( LMT ), General Dynamics ( GD ), RTX ( RTX ), and Northrop Grumman ( NOC ) — have attracted venture investors to the sector.

Between 2021 and mid-June of this year, venture capitalists invested $130 billion in defense tech startups, according to PitchBook.

Nick Beim, a partner at venture firm Venrock, explained investors are eager to invest in the next Anduril, Palantir ( PLTR ), or SpaceX.

“The character of warfare is changing significantly due to emerging technologies,” Beim recently told Yahoo Finance . “I think the future of warfare will be much more driven by AI software and autonomous systems at the edge than by the traditional military platforms that are used today.”

“Venture-backed companies are now best positioned to provide these critical systems, better positioned than the traditional military suppliers,” Beim added.

Stephens declined to say when Anduril would IPO but told Yahoo Finance the company is considering such a move.

“We are starting to think a lot more about that three- to five-year kind of timeline for being ready to go if the market conditions were right and the company continues to grow as well as we have been,” he said.