Sequoia Capital led a seed round for defense company Mach Industries, raising $5.7 million.
Sequoia’s sponsorship of a battlefield hydrogen creation technology shows Silicon Valley investors’ continued interest in national security and partnering with the Department of Defense.
“There is a technology transition happening, and recent events like the war in Ukraine have highlighted the gap in current defense systems,” Sequoia partner Shaun Maguire, who co-led the purchase with Stephanie Zhan, told Reuters via email.
“There is a major modernization effort underway to advance U.S. defense technology and build a new generation of military systems.”
Mach Industries, founded in 2022 by MIT dropout and Thiel Fellow Ethan Thornton, builds field-sourced hydrogen production and combustion gear. It is developing a weapon system that explodes oxygen and hydrogen to power uncrewed aerial vehicles and protection equipment.
Based in Austin, Texas, Mach will utilize the funds for product development, hiring, and expansion.
We’ve developed facilities in Boston and Austin and are presently producing. In a phone interview with Reuters, Thornton said the company is working with the Pentagon on research and hopes to deploy devices within a year.
According to PitchBook, the defense tech industry will reach $184.7 billion by 2027 as the U.S. government demands creative solutions to satisfy national security aims.
Silicon Valley investors have avoided defense technologies due to profitability and reputation issues.
However, Andreessen Horowitz and Founders Fund have publicly supported defense technology startups like Anduril and Palantir (PLTR.N) because of the growing relevance of defense technology to national security.
PitchBook data shows that venture capital firms funded $34.3 billion in defense technology businesses in 2022, double their 2019 investment.
Sequoia Capital recently trimmed its China and India investment franchise to focus on U.S. and European tech startups and seeks founders working on broader defense applications.
“The future of defense technology will be shaped by many of the advancements we’re seeing today in artificial intelligence, autonomous systems, and space-based capabilities, among other areas,” said Sequoia’s Maguire.
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