Ethan Thornton says the path ahead for his defense startup Mach Industries in Huntington Beach will be “very hard,” though at age 20 he has plenty of time to find success.
Thornton formed his current company in Austin, Texas about a year ago and then, reversing a pattern of OC companies heading to Texas, he moved it to Orange County.
“I’m very, very happy about our success thus far,” he told the Business Journal on May 27.
His company is concentrating on two main products: a drone-like miniature fighter called the Viper and “a high-altitude weapons platform.”
Thornton and about 50 colleagues are working out of their new 115,000-square-foot industrial building in Surf City.
The company is sporting a valuation of $335 million following a Series A funding round of $79 million last year.
“Building a team, a high-talent team that’s going to allow you to scale 50 people to 5,000 people in a couple years is always challenging,” he said.
Thornton said he’s not facing any discrimination based on his young age, either from investors or customers.
“The customer just cares about the technology,” according to Thornton.
Thornton grew up in West Texas before heading to Cambridge, Mass., and then Austin, and has moved to Huntington Beach along with the company headquarters.
MIT Dropout
Thornton dropped out of the Massachusetts Institute of Technology (MIT) after his first semester and started his company while still a teenager.
In addition to the Series A round of $79 million, Mach Industries received $5.7 million in seed funding.
One part of the program is the use of hydrogen-powered platforms for the military, including unmanned aerial vehicles (UAVs), weapons and aerial protection devices.
“This versatile fuel can be easily manufactured in the field using readily available resources, such as electricity or aluminum, and water,” Menlo Park-based Sequoia Capital said at the time its funding in Mach Industries was announced.
“It’s a fuel for some of the stuff we do,” according to Thornton, including balloons.
While the company now has about 50 employees, “we’ll probably end the year at about 100,” Thornton said. No more funding rounds are planned at the moment.
He says a predecessor firm was incorporated in September 2022, and that evolved into the currently named Mach Industries about a year ago.
Teenager Funding
There has been outside skepticism about the firm’s prospects.
“Investors gave a teenager $85 million to build hydrogen weapons. It’s not going well,” said Forbes magazine last month.
Forbes added: “Ethan Thornton’s vision for Mach Industries wooed blue-chip investors Sequoia and Bedrock Capital, but he has struggled to execute, hamstrung by technical challenges, safety hazards and a cavalier approach to leadership.”
Thornton responded to the Forbes article by saying it failed to give a fair picture of the work his company is doing.
Still, he acknowledged in a note posted on the company’s website: “As a 1-year-old business, we’ve made many mistakes, but as part of our culture, we work to fix them, learn from them, and relentlessly improve.”
HB Move
“Upon closing our Series A in October 2023, we decided to move the company to Huntington Beach to be closer to the best technical talent and better scale,” Thornton said in a note posted on the company’s website on May 18.
“We’re incredibly excited about Mach’s position. Viper, which we will first deploy as a cruise missile,” the note said, and will come with a cost savings compared to other models.
He said the company has “burned less than 15% of the money we raised.”
The company was looking for 10 new hires as of May 26, according to its LinkedIn site.
They include aerospace structures engineer, embedded systems engineer and electrical engineer.
“We’re a manufacturing company more than anything else,” Thornton said.
Palmer Luckey
Thornton’s story may sound similar to that of another OC defense startup entrepreneur: Palmer Luckey.
In 2017, Luckey, then around his mid-20s, started Anduril Industries, which has since become one of the fastest-growing defense firms in the U.S. The company is reportedly aiming for a $12.5 billion valuation.
Like Thornton, Luckey is also a college dropout.
“I respect Palmer Luckey,” said Thornton, though he acknowledges they are “very different people.” The two have never met.
Freshman Aerospace
Thornton 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.
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 Sequoia Capital, and it marked that well-known venture capital firm’s first investment into defense tech.
In late 2023, Mach Industries landed the much larger, $79 million Series A round, led by Bedrock Capital. Austin, Texas-based Bedrock is a significant investor in Anduril.
HQ Move: From Austin to Surf City
Mach Industries’ founder Ethan Thornton says he sees advantages in moving his defense company’s base from Texas to OC.
“For headquarters Orange County, even though it’s more costly, is incredibly beneficial just because of the talent you can access,” he told the Business Journal on May 27.
He added: “For us, the advantage of the LA area was in aerospace engineering and manufacturing talent, and hiring. It’s very much been the right move from that sort of standpoint.”
He emphasized that Mach Industries still maintains operations in Texas.
“We’ll look to mass manufacture somewhere near Texas most likely.”
