WASHINGTON, March 11 (Reuters) - Castelion, a startup

trying to build a hypersonic weapon for the Pentagon, tested its

system for the first time, it told Reuters on Monday, as a

growing group of small hypersonic arms makers challenge large

defense contractors with less expensive, rapidly produced

products.

The United States and China are engaged in an arms race to

develop the most lethal hypersonic weapons, which travel in the

upper atmosphere at more than five times the speed of sound and

are designed to evade traditional defenses.

"This test flight, this first of many planned for this year,

demonstrates our rapid development approach and is a major

milestone for the company. We now have a low-cost hypersonic

test platform ready to launch on demand," Bryon Hargis,

Castelion's CEO and co-founder, told Reuters in a statement.

U.S. companies like Castelion, RTX's Raytheon unit

and Lockheed Martin ( LMT ) are all working to develop the new

class of weapon, which will translate to large contracts if

production can be scaled.

Private U.S. company Stratolaunch on Saturday said it had

successfully completed the first powered flight of its Talon-A

reusable hypersonic test vehicle.

Castelion already has contracts with the U.S. Air Force and

the Navy, the company told Reuters in a statement regarding the

test, which did not include an explosive device, which it said

took place on Saturday.

Backed by $14.2 million in funding co-led by investors

Andreessen Horowitz and Lavrock Ventures, the tiny startup has

secretly conducted dozens of component tests since June 2023.

The company has set a goal of designing and building a

complete weapons system that includes a hypersonic missile, a

control station and a data link.

Saturday's successful test of the missile system raises the

stakes for rivals RTX and Lockheed Martin ( LMT ) - Pentagon weapons

contractors vying for billions of funds to build hypersonic

weapons.

China and Russia both have competitive hypersonic weapons

programs in what has become a geopolitical race to develop and

field missiles that can change direction while traveling at

several times the speed of sound.