Mach Industries invests $50M to solve a major defense tech challenge
▼ Summary
– Mach Industries acquired solid rocket motor startup Exquadrum for $50 million in cash and equity, rebranding it as Mach Energetics to gain direct control over a constrained component for unmanned systems.
– The deal began after an Exquadrum customer overheard a Mach recruiter at an MIT event, leading to an introduction and acquisition within five months, beating out eight other buyers.
– CEO Ethan Thornton stated vertical integration of supply chains for solid rocket motors and other components is essential due to high costs, poor performance, and multi-year lead times in the defense industrial base.
– The domestic solid rocket motor market is dominated by Aerojet Rocketdyne and Northrop Grumman, creating a supply bottleneck that the Pentagon is addressing with investments like $43.7 million to Anduril.
– Mach Energetics will sell components and testing services to other defense firms, positioning Mach as infrastructure for the industry, while all 85 Exquadrum employees and its Victorville facility join the combined 350-person company.
Three-year-old defense technology startup Mach Industries has completed a $50 million cash-and-equity acquisition of solid rocket motor company Exquadrum, the Huntington Beach-based firm confirmed exclusively to TechCrunch. The acquired entity, now rebranded as Mach Energetics, has been fully integrated into Mach’s operations, giving the startup direct control over one of the most critical and constrained components in modern unmanned systems.
The deal originated from a stroke of serendipity. The two companies first connected last September when an Exquadrum customer at an MIT recruiting event overheard a Mach recruiter mention the startup was seeking a solid rocket motor supplier. Introductions followed, Mach became a customer, and roughly five months later, it acquired the company outright, beating out at least eight other potential buyers in the process.
“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.”
That supply challenge is real and intensifying. Decades of consolidation have left the domestic solid rocket motor market effectively controlled by two major primes , Aerojet Rocketdyne and Northrop Grumman , with little independent capacity to absorb the surging demand created by modern drone warfare. In February, the Pentagon awarded defense tech firm 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.
Mach is now positioning itself as part of the solution, 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, suggesting Mach sees itself as potential infrastructure for the defense tech industry, not merely a systems builder.
All 85 Exquadrum employees are transitioning as part of the deal, along with the company’s intellectual property, business lines, and its 70,000-square-foot facility in Victorville, California, anchored by a nearby energetics and rocket propulsion test site. The combined company now employs roughly 350 people. 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.
The acquisition mirrors moves by other ambitious defense tech startups focused on owning the stack and using cost and speed as competitive weapons. 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; and Pike, a long-range strike munition built for large-scale deployment , 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 precisely the moment it is starting to scale.
Mach has raised nearly $200 million in total , most recently a $100 million Series B last June led by Bedrock Capital, Khosla Ventures, and Sequoia Capital , at a valuation of $470 million. That multiple looks modest for a company with this trajectory and will be worth watching as execution intensifies this year.
(Source: TechCrunch)
