Defense technology startup Space-Eyes is preparing to go public through a merger with McKinley Acquisition Corp, a special purpose acquisition company (SPAC), in a deal that values the combined business at $638 million, according to four people familiar with the matter.
The planned listing comes as investors continue pouring money into defense technology companies developing artificial intelligence, drone detection and autonomous security systems amid rising global defense spending.
One of the company’s most prominent backers is Eric Trump, the son of U.S. President Donald Trump, who has recently become the third-largest private investor in Space-Eyes, the people said.
According to media reports from Friday, Eric Trump will remain involved after the listing as a strategic adviser, helping connect the company with potential partners and introducing candidates for its board of directors.
Why is the SPAC deal important?
Headquartered in Miami, Space-Eyes develops AI-powered technologies designed to detect, track and respond to drone threats while providing real-time geospatial intelligence to governments and commercial organizations.
Although the company has so far operated primarily as a research-and-development business, generating around $1 million in annual revenue, it is now looking to expand by outsourcing manufacturing to third-party partners instead of producing equipment itself.
The approach would allow Space-Eyes to focus on software and analytics while scaling more quickly into new markets.
People familiar with the matter said the company’s investment story is centered less on its current financial performance and more on the government contracts it expects to secure over the coming years.
Space-Eyes is currently negotiating contracts worth about $35 million over five years, compared with its existing projects, which typically generate between $300,000 and $400,000 annually.
Those opportunities include projects aimed at monitoring drug trafficking routes in the Caribbean, supporting defense operations in the Middle East and preventing drones from delivering contraband into U.S. prisons.
As part of his advisory role, Eric Trump is expected to provide guidance on emerging drone-related security risks, drawing on his experience with security issues surrounding the White House, according to one of the people familiar with the discussions.
“He is an important adviser that connects us to people and opportunities, and he is an adviser that brings intelligence,” one source said.
Deal could raise up to $251.7M for expansion
The SPAC merger is expected to raise up to $251.7 million in gross proceeds through McKinley’s trust account and a planned private investment in public equity (PIPE), the people said.
Space-Eyes sees itself as more of a software company than a traditional defense contractor. Its business model has been compared to Palantir, whose software-focused approach has delivered significantly higher margins than many defense hardware companies.
Its products include SeaWatch, a platform that combines satellite and sensor data to track vessels at sea, and Morpheus, an AI-powered counter-drone system designed to identify and neutralize unmanned aerial threats.
The deal also reflects a gradual return of SPAC activity after the market cooled sharply following the boom of 2020 to 2022. Many companies that went public through SPAC mergers during that period struggled to meet ambitious growth forecasts, leading investors to become far more selective.
If approved by shareholders and regulators, the transaction is expected to close in the fourth quarter of 2026, with the combined company listing on the Nasdaq under the ticker “CUAS,” a reference to counter-unmanned aerial systems.
The planned public debut follows Space-Eyes’ decision earlier this year to open a Washington office to strengthen relationships with federal agencies as it pursues a larger share of government defense contracts.
As demand for AI-powered security and counter-drone technologies continues to grow, Space-Eyes is betting that its software-first strategy will help it carve out a place in the rapidly evolving defense technology market.
