Mach Industries Commits $50 Million to Tackle Essential Defense Technology Challenge

Mach Industries, founded three years ago, has successfully acquired the solid rocket motor startup Exquadrum for $50 million in cash and equity, as confirmed by the Huntington Beach-based defense company to TechCrunch. Rebranded as Mach Energetics, Exquadrum is now fully integrated into Mach’s operations, granting the firm direct control over a vital and limited component crucial for modern unmanned systems.

This acquisition stemmed from a fortunate opportunity. The two companies first crossed paths last September when an Exquadrum client overheard a Mach recruiter discussing the need for a solid rocket motor supplier during an MIT recruiting event. This led to introductions, with Mach initially becoming a customer. Now, five months later, it has completely acquired Exquadrum, outperforming over eight other interested buyers, according to Mach.

“Acquiring Exquadrum represents a significant milestone in Mach’s growth,” stated founder and CEO Ethan Thornton, who left MIT at 19 to pursue this venture. “As we provide vehicles for the warfighter, we will continue to vertically integrate our supply chain in areas like solid rocket motors, engines, radar, and avionics, ensuring the highest quality products at competitive prices. Many sectors within the defense industrial base struggle with components that are overpriced, underperforming, or simply unavailable, with lead times extending for years. In short, vertical integration is essential.”

The supply issue is becoming increasingly pressing. Years of consolidation have left the domestic solid rocket motor market largely dominated by two major firms — Aerojet Rocketdyne and Northrop Grumman — which lack the independent capacity needed to meet the rising demand spurred by modern drone warfare.

Just last February, the Pentagon invested $43.7 million in the defense tech company Anduril to boost domestic SRM production (marking its second investment in just over a year), specifically citing SRMs as a critical bottleneck in the munitions supply chain.

Mach is strategically positioning itself as part of the solution, not only for its own initiatives but also for the wider industry landscape. Mach Energetics aims to supply components, testing services, and subsystems to other defense companies, indicating its desire to be a foundational player in the defense tech sector rather than just a systems manufacturer.

According to Mach, all 85 employees from Exquadrum will join the company as part of the deal, alongside the firm’s intellectual property, business segments, and its 70,000-square-foot facility in Victorville, California, which features a nearby testing site for energetics and rocket propulsion. The newly integrated organization now employs around 350 individuals. Exquadrum co-founders Kevin Mahaffy and Eric Schmidt (not to be confused with the former Google CEO) will both take on leadership roles within Mach Energetics and the larger organization.

This acquisition aligns with strategies employed by other ambitious defense tech startups that focus on owning the entire stack while leveraging cost and speed as competitive advantages. Mach is currently developing five vehicle programs — Viper, a jet-powered VTOL; Glide, a high-altitude strike glider; Stratos, an aerial surveillance platform; Dart, a low-cost counter-drone interceptor; and Pike, a long-range strike munition designed for extensive deployment — with plans to commence production on at least three this year. The company claims that the acquisition significantly enhances unit economics across all programs just as it begins to scale.

Mach has raised nearly $200 million to date, with the most recent $100 million Series B financing in June led by Bedrock Capital, Khosla Ventures, and Sequoia Capital, achieving a valuation of $470 million. This valuation currently seems modest for a company on such a trajectory and is definitely worth monitoring as the company advances throughout the year.