Chris Power, founder and CEO of industrial automation startup; Hadrian, is a history student. And in his studies, he observed that history repeats itself: namely, the cycle of rising and falling empires, almost all outsourcing key industries to low-cost countries and paying for it in internal stagnation and, ultimately, decline.
“Never before in history has a declining empire defeated a rising empire,” he said in a recent interview.
He predicted the same cycle threatening to repeat itself in the present. So it was that in 2019, with $6,000 in his pocket and only one close contact in the United States — an uncle, who lived in Texas — Power immigrated from his native Australia to San Francisco.
“I literally moved here because I had this position that the U.S. industrial base was in massive decline,” he said in a recent interview. Given the threat of a war in the South China Sea, he felt convinced that something had to be done about it. He wasn’t sure what. He ran small e-commerce businesses and had been head of sales and marketing for a business software company in Australia. Power says he spent about two months in a hotel room in Texas calling hundreds of manufacturers to find the most solvable problem he could target.
“I basically stumbled into aerospace and defense and realized that there are a couple of very interesting dynamics,” he said. “One is that there is virtually no automation. But more importantly, it’s not like people are doing homework. They are real experts doing things you can’t even scale. The American industrial base is not just non-automated, it’s at a point where it relies on Bob or Jeff, who’s been building this thing for Northrop Grumman for the last 20 years and is literally the only person who knows how to do it.”
Adrian founder Chris Power
Demographic issues are particularly obvious given that the Bobs and Jeffs of the profession, those with most tribal knowledge, are retiring soon and there are few skilled workers trained to replace them. Seeing an opportunity, he started a private equity fund called ADSC focused on acquiring strategic manufacturing companies focused on aerospace and defense.
But Power soon became convinced that the only way to move fast enough – to bring Pax Americana back from the brink of destruction, essentially – was to leverage software and automation as much as possible: to make the factory the product. A year later, he launched Hadrian.
The factory is the product
Hadrian targets high-precision CNC machining, a manufacturing process where parts often require tolerances down to the micron level (a human hair is 50-120 microns thick). Power said the company is focused on automating the key labor-intensive steps that begin when a customer orders a part in that part being shipped — which includes programming the CNC cutting and inspection machines, but extends well beyond that. in many other aspects of factory operations: planning, task management, paperwork.
The idea is to leverage software as much as possible to about 80-90%, and leave the rest to humans, possibly forever. according to Power, this strategy still gives people what are essentially superpowers without having to wait years to solve the hardest problems.
“You don’t want everything to be a science project,” he said. “You have to judge very well what is too difficult.”
The company raised a $9.5 million seed round and launched its first facility, a small 20,000 square foot R&D facility in Hawthorne, California (which is now closed). A $90 million Series A followed in early 2022. Hadrian launched a second facility, five times the size of the first, in Torrance, California, shortly thereafter. Twelve months after launching to customers, Power said the company is “well over $20 million in revenue.”
Since then, the startup has become one of the buzziest among its cohort, which can be broadly defined as those operating under the banner of “American Dynamism,” a phrase coined by A16Z investor (and board member council of Hadrian) Katherine Boyle. It’s undoubtedly a lot of pressure, and Power admits that his company’s pursuit – as with anything worthwhile, let’s face it – is incredibly challenging.
For example, Power says the CNC machines at the Torrance facility are already operating with a significant increase in productivity because Hadrian has automated machine programming so that one person can run 4-6 machines simultaneously (as opposed to a specialist who assigned to each machine). But he doesn’t want to stop there. His goal is to double the efficiency even from where it is today.
“There’s a lot to build on,” he said. “Right now we’re three to four times more efficient than the industry standard, but we know we can get to 10 times more efficient.”
In addition, the company exclusively offers aluminum components, but aims to roll out steel to all customers by the end of this quarter. In the long term, Hadrian also plans to eventually add even more materials, such as titanium or plastics.
Increased efficiency, increased capabilities – such ambitions require more resources. Even adding one more type of metal, such as steel, adds a new layer of complexity. As part of growing the business with its current customers, Power said the company has started to see a flood of interest in multi-year production contracts from aerospace primes and Tier 1s.
As a result, Power began raising capital in a venture capital round last fall, which grew as strategic customers put in additional capital and the company secured about $25 million in debt financing for equipment and expansion. The result of that effort, which ended last December, saw the company close a $117 million series, a combination of equity and debt, with new participation from RTX Ventures, the business arm of defense prime RTX (formerly Raytheon). Construct Capital, WCM, Bracket Capital, Shrug Capital, Lux Capital, A16Z, Founders Fund, S&A, Silent Ventures, Cubit Capital, Caffeinated and other existing investors also participated.
With the new funding, Power aims to double its automation and software team in order to improve automation processes and meet new customer demand. He added that they expect to be out of reserve capacity at the Torrance facility by early 2025, which means the company will also need to break ground on a second plant — which won’t be in California and will be 3-4 times the size of the current facility — the third quarter of this year.
“The amount of things we need to do in software and robotics to be able to scale our software and systems across multiple sites is a huge leap that our software team is preparing for. Because we need to be able to copy-paste these facilities as quickly as, say, Chick-fil-A copy-pastes a franchise or Amazon logistics copy-pastes a logistics center.”
“There’s a lot of work to be done”
New interest from aerospace primes brought with it significant bookings and new business opportunities. Power said some customers expressed interest in alternative models, such as having Hadrian build a dedicated facility to ensure dedicated factory capacity. The company is also considering setting up some factories in a joint venture with the customer. These will be focused on specific production areas so that the customer can effectively use Hadrian’s technology and systems to accelerate their own production in a focused area.
With these business alternatives in mind, Power said it expects at least one additional partnering plant — a customer-dedicated or joint-venture facility — to come online by the end of 2025.
“It’s crazy to be 13 months into it and that’s what customers are telling us they want. That’s why we’ve done such a big fundraiser, to double our own automation team, to keep increasing speed and cost for our customers, to expand to multiple factories in different states, and to have that massive demand. customers for these special manufacturing plants or joint venture automation plants to solve these basic manufacturing problems,” he said.
“We have a lot to do over the next couple of years, but we’re very grateful that in a very tough fundraising environment that new investors and existing investors and industry players like Raytheon are stepping up to the plate and giving us the capital we need to keep pace with customer demand.”
