In the midst of the ongoing Ukraine war, major U.S. defense contractors such as Lockheed Martin, Northrop Grumman, and Raytheon Technologies continue to rake in billions in windfall profits. Now, one tech startup is jumping into the fray to cash in on the action and even more so, investors are already opening their wallets.
Mach Industries is a defense tech startup founded in 2022 by MIT dropout and Thiel Fellow Ethan Thornton. The company’s primary focus is on developing a hardware solution that harnesses field-sourced hydrogen creation and combustion methods. In June, Mach Industries raised $5.7 million in a seed round led by Sequoia Capital, making it the first-ever defense tech investment in the venture capital giant’s history.
Fast forward three months later, several other venture capital firms are now injecting millions into the startup, a further demonstration of investors’ trust and confidence in the company’s leadership and its future potential in the defense tech industry.
On Wednesday, Mach Industries announced it has closed a $79 million Series A led by Bedrock Capital in a deal that propelled Mach’s post-money valuation to an impressive $335 million. Alongside Bedrock Capital, Mach Industries also received investments from a league of other renowned top-tier investors. Koko Xu, the Head of Growth at Mach Industries, confirmed the details, adding that the latest funding came “from Bedrock and other top-tier investors.”
“We’ve built out facilities in Boston and Austin and are now moving towards production. We are looking to have deployed systems within the next year,” Thornton told Reuters in a phone interview back in June, adding that the company already works with the US Pentagon on research works.
Mach Industries specializes in the development of a diverse array of hydrogen-powered military platforms and munitions, encompassing unmanned aerial vehicles (UAVs) and cutting-edge hydrogen generation systems. While the specifics of their technology remain shrouded in secrecy, it’s evident that Mach is poised to harness field-sourced hydrogen as a formidable advantage on the battlefield.
This distinctive approach signals a significant departure from conventional defense procurement methods, challenging the norm of investing in expensive and intricate defense systems characterized by protracted development timelines. Pioneering startups like Mach Industries are committed to delivering cost-effective solutions at scale, guided by iterative development programs reminiscent of the agile practices seen in Silicon Valley.
The backdrop of a globally distributed U.S. military engagement landscape has fueled substantial growth in the defense tech market, projected to reach a staggering $184.7 billion by 2027. This surge is, in part, driven by the U.S. government’s escalating demand for innovative technologies to fulfill its national security objectives, as noted in research from PitchBook.
It’s worth noting that Silicon Valley investors have historically approached defense technology with a degree of caution, primarily driven by concerns related to profitability and apprehensions about the ethical utilization of such technologies.