What Happened

Code Metal closed its $125 million Series B financing round led by Salesforce Ventures, with participation from Accel, B Capital, Smith Point Capital, J2 Ventures, Shield Capital, Overmatch, RTX, and other investors. The funding values the Boston startup at $1.25 billion, representing significant growth for a company founded just in 2023.

The company simultaneously announced that Ryan Aytay, former CEO of business intelligence company Tableau, has joined as President and Chief Operating Officer. This executive addition signals Code Metal’s preparation for rapid scaling as demand grows across defense and regulated industries.

Code Metal says it’s already profitable and generating positive cash flow, an unusual achievement for such a young startup. The company serves customers including Toshiba, RTX (formerly Raytheon Technologies), L3Harris Technologies, and the U.S. Air Force.

Why It Matters

Code Metal addresses a critical bottleneck in defense modernization: legacy software written in outdated programming languages that still powers essential military systems. Many defense contractors rely on code written decades ago in languages like COBOL, Ada, and Fortran—languages that few modern developers know how to work with.

The startup’s formal verification approach distinguishes it from other AI coding tools. While most AI code generation creates new programs that might contain subtle bugs, Code Metal mathematically proves that translated code functions identically to the original. This verification is crucial for defense applications where software errors could have catastrophic consequences.

The defense industry’s modernization challenges represent both a national security issue and a massive business opportunity. Aging software systems create vulnerabilities and limit the military’s ability to integrate new technologies, while the shrinking pool of developers who understand legacy languages threatens long-term maintenance capabilities.

Background

The U.S. defense industry has struggled with legacy software modernization for years. Critical military systems often run on code written in the 1970s and 1980s, when programming languages like Ada and COBOL were standard. These systems control everything from weapons guidance to logistics networks, but updating them has been prohibitively expensive and risky.

Traditional approaches to legacy modernization have required teams of specialized developers to manually rewrite code, a process that could take years and cost millions while introducing new bugs. The few remaining experts in legacy languages command high salaries, and their numbers continue to dwindle as they retire.

Code Metal was founded by CEO Peter Morales, who previously worked at Microsoft and MIT’s Lincoln Laboratory, a federally funded research center focused on national security technology. The company’s Boston headquarters places it near both MIT’s computer science talent pipeline and the concentration of defense contractors throughout the Northeast corridor.

The company raised a $36.5 million Series A round earlier, making this $125 million Series B particularly notable for its size and speed. The rapid follow-on funding reflects both Code Metal’s execution and the urgency defense contractors feel around modernization initiatives.

What’s Next

Code Metal plans to use the new funding to scale its platform and expand beyond defense into other industries with similar legacy code challenges, including manufacturing, automotive, telecommunications, and logistics. These sectors also rely on decades-old software that needs modernization but can’t afford the risks associated with manual rewrites.

The company’s formal verification technology could become increasingly important as AI-generated code becomes more prevalent across industries. While current AI coding tools can write new programs quickly, they typically can’t guarantee correctness—a limitation that matters greatly in regulated industries.

Code Metal’s success may accelerate similar efforts across the defense technology sector. As military systems become more software-dependent and threats become more sophisticated, the ability to quickly and safely modernize legacy code becomes a strategic advantage.

The appointment of Ryan Aytay as President and COO suggests Code Metal is preparing for significant growth. Aytay’s experience scaling Tableau from startup to a company acquired by Salesforce for $15.7 billion provides relevant expertise for managing rapid expansion in enterprise markets.