Mach Industries, a burgeoning defense startup, has taken a significant step by acquiring solid rocket motor company Exquadrum for $50 million in a cash-and-equity agreement. Based in Huntington Beach, Mach has rebranded Exquadrum as Mach Energetics, integrating it fully into its operations. This acquisition provides Mach with direct oversight of a crucial component for modern unmanned systems.
The partnership began serendipitously last September when a Mach recruiter at an MIT event caught the attention of an Exquadrum customer, leading to initial discussions. Fast forward five months, and Mach has successfully acquired Exquadrum, outpacing more than eight competing offers.
Founder and CEO Ethan Thornton, who left MIT at 19 to launch Mach, emphasized the strategic importance of this acquisition. He stated, "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." He highlighted the supply chain challenges in the defense sector, where many components are either overpriced, underperforming, or simply unavailable.
This issue is becoming increasingly pressing. The domestic solid rocket motor market is largely dominated by two major players, Aerojet Rocketdyne and Northrop Grumman, leaving little room for independent companies to meet the rising demands of modern drone warfare.
In a recent move, the Pentagon allocated $43.7 million to defense tech company Anduril to boost domestic solid rocket motor production, underscoring the critical nature of this supply chain bottleneck.
Mach is positioning itself as a solution provider, not just for its own needs but for the broader defense ecosystem. Mach Energetics aims to supply components, testing services, and subsystems to other defense firms, signaling its ambition to become a foundational player in the defense tech industry.
As part of the acquisition, all 85 Exquadrum employees will join Mach, along with the company's intellectual property and a 70,000-square-foot facility in Victorville, California. This expansion brings Mach's total workforce to around 350 employees. Exquadrum co-founders Kevin Mahaffy and Eric Schmidt will assume leadership roles within Mach Energetics.
The acquisition reflects a trend among innovative defense tech startups that prioritize ownership of their supply chain to enhance cost efficiency and speed. Mach is currently developing five vehicle programs, including Viper, a jet-powered VTOL, and Dart, a low-cost counter-drone interceptor, with plans to begin production on at least three this year. The integration of Exquadrum is expected to significantly improve the unit economics of these programs.
With nearly $200 million raised to date, including a recent $100 million Series B funding round led by prominent investors, Mach Industries is poised for growth. At a valuation of $470 million, the company is positioned to make a substantial impact in the defense technology sector as it scales its operations.
