Mach Industries just spent $50M to solve a major defense tech problem
Source: TechCrunch
Acquisition Overview
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—now rebranded as Mach Energetics—has been fully folded into Mach’s operations, giving it direct control over one of the most important, and constrained, components in modern unmanned systems.
How the Deal Came Together
The two companies first connected last September when an Exquadrum customer at an MIT recruiting event overheard a Mach recruiter mention that the company was looking for a solid rocket motor supplier. Introductions were made, Mach became a customer, and roughly five months later it acquired the company outright, beating out upwards of eight other potential buyers.
“The Exquadrum acquisition marks an important next stage in Mach’s growth,” said founder and CEO Ethan Thornton, who dropped out of MIT at 19 to start the company. “As we deliver vehicles to the warfighter, we’ll 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’re simply unavailable, with lead times stretching years. In short, vertical integration is non‑optional.”
Market Context
Decades of consolidation have left the domestic solid rocket motor (SRM) market effectively controlled by two large primes—Aerojet Rocketdyne and Northrop Grumman—with little independent capacity to absorb the growing demand created by modern drone warfare.
In February, the Pentagon awarded defense‑tech outfit Anduril $43.7 million to expand domestic SRM production, explicitly calling SRMs a critical bottleneck in the munitions supply chain.
Mach’s Strategic Position
Mach is positioning itself as part of the solution, not only for its own programs but for the broader ecosystem. Mach Energetics plans to sell components, testing services, and subsystems to other defense firms, suggesting the company sees itself as potential infrastructure for the defense‑tech industry rather than just a systems builder.
All 85 Exquadrum employees are joining Mach, along with the company’s 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 organization now has roughly 350 employees. Exquadrum co‑founders Kevin Mahaffy and Eric Schmidt (no relation to the former Google CEO) are taking on leadership roles within Mach Energetics and the broader organization.
Product Portfolio
Mach has five vehicle programs in various stages of development:
- Viper – a jet‑powered VTOL
- Glide – a high‑altitude strike glider
- Stratos – an airborne surveillance platform
- Dart – a low‑cost counter‑drone interceptor
- Pike – a long‑range strike munition built for large‑scale deployment
The company plans to enter production on at least three of these programs this year. The acquisition is expected to improve unit economics across all of them as Mach scales.
Funding and Valuation
Mach has raised nearly $200 million in total, most recently a $100 million Series B round last June led by Bedrock Capital, Khosla Ventures, and Sequoia Capital. The round valued the company at $470 million—a multiple that appears modest given its trajectory and will be worth watching as the company moves toward production.