Mach Industries Invests $50 Million to Tackle Key Defense Technology Challenge

Mach Industries, a three-year-old company, has successfully acquired solid rocket motor startup Exquadrum for $50 million in cash and equity, as confirmed by the Huntington Beach-based defense startup to TechCrunch. Now renamed Mach Energetics, Exquadrum has been fully integrated into Mach’s operations, granting the company direct oversight of a crucial and limited component in contemporary unmanned systems.

The acquisition originated from a fortunate opportunity. The two companies first connected last September when an Exquadrum client overheard a Mach recruiter at an MIT recruiting event discussing the company’s need for a solid rocket motor supplier. This led to introductions, with Mach initially becoming a customer, and now, about five months later, it has wholly acquired the company, surpassing over eight other interested buyers, according to Mach.

“The acquisition of Exquadrum represents a significant next step in Mach’s expansion,” stated founder and CEO Ethan Thornton, who left MIT at 19 to pursue the venture. “As we provide vehicles to the warfighter, we will continue to vertically integrate our supply chain in areas such as solid rocket motors, engines, radar, and avionics to guarantee the highest quality product at the most competitive price. Many sectors of the defense industrial base face issues with components that are both overpriced and underperforming, or worse, entirely unavailable, with lead times extending for years. In summary, vertical integration is essential.”

This supply challenge is increasingly pressing. Years of consolidation have resulted in the domestic solid rocket motor market being predominantly controlled by two major firms — Aerojet Rocketdyne and Northrop Grumman — lacking the independent capacity required to meet the rising demand driven by modern drone warfare.

In fact, just last February, the Pentagon allocated $43.7 million to the defense tech company Anduril to boost domestic SRM production (marking its second investment in just over a year), explicitly identifying SRMs as a vital bottleneck in the munitions supply chain.

Mach is strategically positioning itself as a part of the solution, not only for its initiatives but also for the wider industry landscape. Mach Energetics intends to offer components, testing services, and subsystems to other defense companies, indicating that Mach sees itself as a potential backbone for the defense tech sector rather than merely a systems manufacturer.

According to Mach, all 85 employees from Exquadrum are joining 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 combined organization now employs approximately 350 people. Exquadrum co-founders Kevin Mahaffy and Eric Schmidt (not to be confused with the former Google CEO) are both stepping into leadership roles within Mach Energetics and the larger organization.

The acquisition also parallels strategies undertaken 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 intentions 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 is starting to scale.

Mach has raised nearly $200 million to date, with the latest $100 million Series B financing in June led by Bedrock Capital, Khosla Ventures, and Sequoia Capital, achieving a valuation of $470 million. This multiple currently appears modest for a company on this trajectory and is certainly worth monitoring as the company progresses this year.