Yahoo Finance Investors Gave A Teenager $85 Million To Build Weapons — How Did It Go?
At 19, Ethan Thornton founded Mach Industries to replace traditional munitions with hydrogen-powered weaponry. Dropping out of MIT, he secured $85 million from investors, including Sequioa's Shaun Maguire, who co-led a $5 million seed funding round, and Bedrock's managing partner Geoff Lewis who led a $79 million series A investment. This gave the startup a valuation of $335 million.
Despite the funding, the company faced challenges. Former employees described a chaotic environment with safety issues and an inexperienced leadership style. Former program manager Eric McManus raised concerns about rapid funding without solid products, expressing his apprehensions to Forbes: "To get that much money, that soon, without any real product, without a flight test, without a demo? Nothing."
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Silicon Valley's "move fast and break things" almost proved fatal for the then-teenage CEO. During a test, Thornton and an employee narrowly escaped a fatal accident when a hydrogen-powered gun exploded, spraying shrapnel across the area. Thornton was uninjured, but his colleague was hospitalized with shrapnel all over his body.
Thornton's ambitious projects included hydrogen-powered firearms and the "Prometheus" hydrogen generator, a mobile weapon that could be utilized on the battlefield. However, due to unforeseen cost issues and the company’s lack of an economical way to produce aluminum fuel for hydrogen production, the project was later scrapped. This decision was made to ensure the company’s financial stability and focus on other viable projects.
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Defense Tech Boom
Due to global tensions between the world's superpowers, defense and military startups are new VC darlings. Mach Industries is a shining example of the burgeoning defense tech startup scene, which has been attracting substantial VC funding. According to PitchBook, a staggering $100 billion has been invested in the defense technology sector since 2020, underscoring this industry’s immense potential and growth.
One of the key advantages that startups bring to the defense sector is agility and innovation. Unlike traditional defense contractors, startups can move faster and with less red tape. This agility allows them to develop and deploy new technologies faster, giving them a competitive edge in an increasingly dynamic and unpredictable security environment.
Startups like Palmer Luckey's Anduril Industries are scoring major contracts with the U.S. Air Force and other military branches, snapping them up from Boeing, Lockheed Martin, and other legacy military contractors. Luckey's company has been tasked with creating autonomous fighter jets — a core part of the Air Force's efforts to modernize its fleet.
As these new startups continue to attract investment and grow their presence in the market, they're poised to play an increasingly important role in meeting the evolving security challenges of the 21st century.
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