New financing values aerospace AI startup Air Space Intelligence at approximately $300 million.

To further expand its collaboration with the Department of Defense, an AI startup focused on air travel has secured $34 million in funding, with Andreessen Horowitz leading the investment round.

Air Space Intelligence Inc. has long sold its tools — dubbed Waze for flights — to commercial airlines such as Alaska Airlines. The startup’s marquee product called Flyways can help air carriers choose aircraft routes taking into account factors such as air traffic, weather and airport conditions.

The new funding raises Air Space’s value to about $300 million, according to people familiar with the situation, who asked not to be identified because the details are private. The startup declined to comment on its value.

This fall, Air Space won two contracts with the U.S. Air Force worth a total of $2.7 million and has qualified to compete for a third worth up to $900 million, the startup said. News of the deals has not been reported before.

Air Space joins a growing group of Silicon Valley startups aiming to land the US Department of Defense as a client. Earlier this year, it signed an eight-figure, multi-year deal with Alaska Airlines, and the startup says its commercial customer segment is profitable. Now, after small contracts with the US Air Force, it is looking to expand its government business. Air Space CEO Phillip Buckendorf said that eventually the company aims to build the government side of its operations on the same scale as its commercial side, “if not bigger.”

Read more: Schmidt-backed Pro-America fund has begun placing bets

David Ulevitch, a partner at Andreessen Horowitz, said Air Space was an attractive bet in part because of its applications in both the public and private sectors. “The DoD knows they have to streamline their critical infrastructure, like aviation, and they’re looking to the private sector for solutions,” said Ulevitch, who heads his firm’s American Dynamism practice, which seeks to invest in advanced companies. reasons such as national security and infrastructure. Ulevitch also becomes an observer on the spacecraft.

Air Space has competition. Airlines have long used predictive software from Boeing Co subsidiary Jeppesen, Saber GLBL Inc and others to monitor engines, set ticket prices and schedule crews. Optimizing routes to save fuel costs and reduce climate impact remains the industry’s top priority, but it’s difficult to gauge the effectiveness of the software built by Air Space and other startups dedicated to the cause, said Robin Riedel, head of McKinsey’s Disruptive Aerospace group. .

“There’s a lot of debate within the industry. Some people love it and others are more critical,” he said. “It’s not a slam dunk where everyone puts their hands together and says this is the best thing since sliced bread.”

Air Space plans to use its latest cash flow to hire more staff — potentially doubling the startup’s headcount to 160 and expanding its presence in Washington. The five-year-old company is based in San Francisco, but Buckendorf moved to D.C. last year and plans to expand the office. The United States has moved faster than ever to use new technology, he said. Adding: “Awareness of the importance of software is growing.”

Existing investors such as Renegade Partners and Spark Capital also invested in the round, which was oversubscribed and raised in less than three weeks. Bloomberg Beta, the private equity arm of Bloomberg LP, also reinvested.

“The way government business is happening now is happening much faster than I thought,” said Renata Quintini, founder of Renegade Partners.