Defence technology start-up Anduril has raised nearly $1.5bn in the second-biggest venture capital round of the year in the US, marking a milestone for young tech companies trying to break into the notoriously difficult field of defence procurement.

Anduril said the investment valued it at $7bn, excluding the new cash it is raising, up from $4.2bn 18 months ago. It comes at a time when giant investment rounds, which were a feature of the recent venture capital boom, have all but dried up, while many start-ups struggle to avoid “down rounds” that force them to accept lower valuations.

Anduril was founded five years ago by Palmer Luckey, who sold his previous start-up, virtual reality company Oculus, to Facebook for $2bn at the age of 21. In an interview with the FT, Luckey said he had set out to build a large defence company based around new technologies such as AI and drones because many Silicon Valley companies, under pressure from their workers, had turned their back on the Pentagon.