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Three-year-old Mach Industries has acquired solid rocket motor startup Exquadrum in a $50 million cash-and-equity deal, the Huntington Beach-based defense startup tells TechCrunch. Exquadrum \u2014 now rebranded as Mach Energetics \u2014 has been fully folded into Mach\u2019s operations, giving it direct control over one of the most important, and constrained, components in modern unmanned systems.<\/p>\n
The deal itself started with a lucky break. The two companies first connected last September when an Exquadrum customer at an MIT recruiting event happened to overhear a Mach recruiter mention that the company was in the market for a solid rocket motor supplier. Introductions were made, Mach came in as a customer, and now, roughly five months later, it has acquired the company outright, beating out upward of eight other potential buyers in the process, it says.<\/p>\n
\u201cThe Exquadrum acquisition marks an important next stage in Mach\u2019s growth,\u201d said founder and CEO Ethan Thornton, who dropped out of MIT at 19 to start the company. \u201cAs we deliver vehicles to the warfighter, we\u2019ll continue to vertically integrate our supply chain across solid rocket motors, engines, radar, and avionics to ensure we deliver the best possible product at the lowest cost. In many areas of the defense industrial base, these components are not only too expensive or lacking performance, they\u2019re simply unavailable, with lead times stretching years. In short, vertical integration is non-optional.\u201d<\/p>\n
That supply problem is real and getting more acute. Decades of consolidation have left the domestic solid rocket motor market effectively controlled by two large primes \u2014 Aerojet Rocketdyne and Northrop Grumman \u2014 with little independent capacity to absorb the growing demand that modern drone warfare has created.<\/p>\n
Indeed, in February, the Pentagon awarded the defense tech outfit Anduril $43.7 million specifically to expand domestic SRM production (its second such investment in the company in just over a year), explicitly calling SRMs a critical bottleneck in the munitions supply chain.<\/p>\n
Mach is now explicitly positioning itself as part of the solution, and not just for its own programs but for the broader ecosystem. Mach Energetics plans to sell components, testing services, and subsystems to other defense firms, a maneuver that suggests Mach sees itself as potential infrastructure for the defense tech industry and not just a systems builder.<\/p>\n
According to Mach, all 85 Exquadrum employees are coming over as part of the deal, along with the company\u2019s IP, business lines, and its 70,000-square-foot facility in Victorville, California, which is anchored by a nearby energetics and rocket propulsion test site. The combined company now has roughly 350 employees. Exquadrum co-founders Kevin Mahaffy and Eric Schmidt (no relation to the former Google CEO) are both taking on leadership roles within Mach Energetics and the broader organization.<\/p>\n
The acquisition also mirrors moves by other ambitious defense tech startups that are focused on owning the stack and using cost and speed as competitive weapons. Mach has five vehicle programs in various stages of development \u2014 Viper, a jet-powered VTOL; Glide, a high-altitude strike glider; Stratos, an airborne surveillance platform; Dart, its low-cost counter-drone interceptor; and Pike, a long-range strike munition built for large-scale deployment \u2014 with plans to enter production on at least three this year. The company says the acquisition meaningfully improves unit economics across all of them at exactly the moment it is starting to scale.<\/p>\n
Mach has raised nearly $200 million in total \u2014 most recently a $100 million<\/a> Series B last June led by Bedrock Capital, Khosla Ventures, and Sequoia Capital \u2014 at a valuation of $470 million. It\u2019s a multiple that right now looks modest for a company with this trajectory and will definitely be worth watching as the rubber starts to meet the road this year.<\/p>\n<\/div>\n When you purchase through links in our articles, we may earn a small commission<\/a>. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n