Armadillo is lead (and largely funded) by John Carmack, co-creator of computer games including Doom and Quake. All of its employees (including Carmack) have other, full-time, jobs and contribute their efforts to Armadillo on a voluntary basis. Like other X-Prize candidates, Armadillo runs on a small budget and without support from major aerospace companies or agencies like NASA or ESA. Carmack estimates he will spend around one million dollars of his Id Software fortune on the project, a tiny sum compared with the budgets of established spaceflight programs.
What's interesting about Armadillo's methods is their usage of modern computer technology to simplify and reduce costs of rockets. For example, instead of stabilization fins which complicate the design and increase drag, they use an aerodynamically unstable design, where the computer throttles the engines based on feedback from fiber optic gyroscopes.