Three-year-old Mach Industries has acquired solid rocket engine startup Exquadrum in a $50 million cash and stock deal, the Huntington Beach-based defense startup tells TechCrunch. Exquadrum — now renamed Mach Energetics — has been fully integrated into Mach’s operations, giving it direct control over one of the most important and most constrained components in modern unmanned systems.
The deal itself started with a lucky break. The two companies first connected last September when an Exquadrum client at an MIT recruiting event overheard a Mach recruiter mention that the company was in the market for a solid rocket engine supplier. Introductions were made, Mach came on board as a client and now, about five months later, he has bought the company outright, beating out more than eight other potential buyers in the process, he says.
“The acquisition of Exquadrum 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 will continue to vertically integrate our supply chain in solid rocket motors, engines, radars and avionics to ensure we deliver the best possible product at the lowest cost.
This supply problem exists and is getting worse. Decades of consolidation have left the domestic solid rocket engine market essentially controlled by two major companies—Aerojet Rocketdyne and Northrop Grumman—with little independent capacity to absorb the growing demand that modern drone warfare has created.
Indeed, in February, the Pentagon awarded Anduril Defense Technology $43.7 million specifically to expand domestic production of SRMs (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 explicitly positioning itself as part of the solution, and not just for its own programs but for the wider ecosystem. Mach Energetics plans to sell components, testing services and subsystems to other defense companies, a maneuver that suggests Mach sees itself as a potential infrastructure for the defense technology industry rather than just a system builder.
According to Mach, all of Exquadrum’s 85 employees come as part of the deal, along with the company’s IP, business lines and its 70,000-square-foot facility in Victorville, California, which is anchored by a nearby energy and missile test site. The combined company now has approximately 350 employees. Exquadrum co-founders Kevin Mahaffy and Eric Schmidt (no relation to the former Google CEO) both assume leadership roles at Mach Energetics and the broader organization.
The acquisition also 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 attack glider. Stratos, an airborne surveillance platform. Dart, its low-cost anti-drone interceptor. and Pike, a long-range munition built for large-scale deployment — with plans to put at least three into production this year. The company says the acquisition significantly improves the unit’s financials across the board as it begins to scale up.
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 $470 million valuation. It’s a multiple that currently seems modest for a company on this trajectory, and will certainly be worth watching as the rubber starts to meet the road this year.
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