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Monday, May 20, 2024

Military Co. Mach Industries in ­­­­OC

A new, well-funded defense technology upstart, founded by a teenager, has moved its base of operations to Orange County, the Business Journal has learned.

Mach Industries, which aims to make a variety of hydrogen-powered platforms for the military, including unmanned aerial vehicles (UAVs), weapons and aerial protection devices, has inked a lease for the entirety of a new, 110,000-square-foot industrial building in Huntington Beach, real estate sources tell the Business Journal.

The company, which has largely operated in stealth mode since its founding a little more than three years ago and counts a valuation topping $300 million, is looking to fill roughly a dozen local positions, primarily engineering and manufacturing jobs.

Mach Industries’ LinkedIn account now lists Huntington Beach as its headquarters, and company founder and Chief Executive Ethan Thornton, who was still a teenager as of last year, also cites Surf City as his base on his LinkedIn profile.

Prior reports on the company, at the time of its last funding round, cited Austin, Texas as its base.

Recent job postings from Mach Industries indicate that flight testing for its UAVs will primarily be conducted in the Mojave Desert.

The company could not be reached for comment on the company’s move to OC, or its expansion plans in the area.

Wunderkind Founder

Mach Industries’ backstory and business plan—one that aims to utilize next-gen technology to create better defense systems for the U.S. and its allies—counts similarities to the country’s fastest-growing defense tech firm, Costa Mesa-based Anduril Industries, and its founder, Palmer Luckey.

Luckey, who dropped out of California State University, Long Beach as a teenager to start then Irvine-based Oculus VR, was in his mid-20s at the time of Anduril’s founding in 2017.

He’s now 31, and Anduril, a maker of sentry towers, UAVs, counter-drone systems, unmanned submarines and other software and hardware products for military and homeland security use, counts a valuation approaching $10 billion, making it one of Orange County’s most-valuable private companies.

Thornton is also a college dropout; he was studying aerospace engineering at MIT, but left during his freshman year, following a short stint working at MIT Lincoln Laboratory, an R&D center managed by the school for the Department of Defense.

“This was pre-team, pre-revenue, anything,” Thornton told trade publication TechCrunch last year. “I just couldn’t sit through classes anymore.”

His government connections at the MIT Lincoln Laboratory helped attract investors for his new venture. At the time of the company’s $5.7 million seed round last summer he was 19 years old.

That funding round was led by Menlo Park-based Sequoia Capital, and it marked that well-known venture capital firm’s first investment into defense tech.

In late 2023, Mach Industries landed a much larger, $79 million Series A round, led by Bedrock Capital. Austin-based Bedrock is a significant investor in Anduril.

That funding round valued Mach Industries at $335 million, according to reports.

Industrial Development

Real estate sources tell the Business Journal that Mach Industries is setting up shop at one of the buildings at the newly built Huntington Gateway industrial development along Bolsa Avenue.

The nine-building, multi-phase project, expected to run roughly 1.5 million square feet when completed, is headed by Newport Beach-based Sares Regis Group. The development is built on land previously used by aerospace and defense giant Boeing Corp. for its sprawling operations in the city.

Other tenants at Huntington Gateway include Amazon, which also leases a full building at the new development.

Real estate sources cite the 5473 Bolsa Ave. building at the development as the new base for Mach Industries; the company has yet to comment on, or confirm, the new lease.

Hydrogen Creation, Combustion

Mach Industries’ investors describe the startup as “a hardware defense technology company,” one utilizing “cutting-edge hydrogen creation and combustion techniques.”
The use of hydrogen as a fuel is key to the company’s product development.

“This versatile fuel can be easily manufactured in the field using readily available resources, such as electricity or aluminum, and water,” Sequoia Capital said at the time its funding in the company was announced.

“Most importantly, hydrogen enables 10 times advancements in range and power for projectiles and unparalleled loiter time and speed for aerial systems,” the VC firm said.

“Hydrogen is a fascinating fuel—it’s really the only way to drive combustion out of electricity,” Thornton said last year.

“This process allows for flexible energy transfer, and the resulting fuel increases performance on many legacy platforms. The result is a more distributed energy supply chain supporting systems with otherwise impossible capabilities,” Thornton said.

“I founded Mach to push the development of these capabilities as I saw their adoption as a necessary step in the future of defense.”

Mach Industries’ initial “oxyhydrogen defense platforms” are expected to be in the form of UAVs and aerial protection devices. The company’s website only shows one product rendering, for an unmanned jet similar in design to a product Anduril is currently working on.

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