Hadrian Acquires Datum Source to Help Defense Tech Startups
A Solution to a Common Problem
Hadrian founder and CEO Chris Power got tired of turning startups away.
Since 2020, Power has raised $220 million for Hadrian, a largely autonomous factory that mass produces parts for space and defense companies.
The Challenge of Rapid Iteration
While Hadrian has produced parts for major defense companies, it had to turn away some defense tech startups because startups have to rapidly iterate on product designs, meaning they need one hyper-specific part today and another design tomorrow. Hadrian, which was last publicly valued at $275 million, would have to constantly set up entirely new production lines, ruining the point of using its hyper-efficient automated factory.
The Acquisition of Datum Source
But on Wednesday Hadrian announced they bought Datum Source, a software company founded by SpaceX alums that uses AI to help hardware companies find manufacturing partners. Terms of the deal were not disclosed, but Datum Source has raised $5.6 million at a valuation of $30 million, according to Pitchbook. With Datum Source, Hadrian can help match a startup with specific manufacturers any time it needs a new part, instead of the founders otherwise searching through hundreds of potential suppliers, Power said.
This lets Hadrian partner with the early stage defense tech startups it’s been missing out on — and hopefully ensures that, as these companies grow, Hadrian is top of mind. Or, as Power put it, when a startup does win a big DoD contract and is ready to scale up production, he can promise that “we’re going to make all this stuff in an autonomous factory for you.”
As a bonus, the acquisition brought Hadrian about thirty of Datum’s existing customers, with the bulk being early stage startups. The company will also bring on Datum Source’s 14-person team to help guide early stage companies through the procurement process.
A Harbinger of Things to Come
The acquisition is both a savvy move on Power’s part and a harbinger of things to come. Venture capital has poured $129.3 billion into defense tech startups since 2021, according to PitchBook, and, in a category where there can be very, very few winners, a rush of acquisitions will have to occur.
Consolidation in Defense Tech
It looks like the time of consolidation is upon us. Anduril has bought at least five companies since 2021, and, three months ago, Shield AI bought AI company Sentient Vision Systems.
Power also said that Datum Source will be the “first of many” acquisitions for Hadrian. In the future, he added, Hadrian might acquire startups that also offer automated manufacturing processes or, perhaps, even buy some that use legacy manufacturing systems.
Acquisitions in Defense Tech’s DNA
Acquisitions are in defense tech’s DNA. To be a “defense prime” — basically, to compete with behemoths like Lockheed Martin, Boeing, etc — a company has to be able to compete for contract after contract, each of which will require a different skillset or engineering capacity or design speciality.
So, for any defense tech startup to grow that big, they must continuously add to their offerings and must make them better than some of the best-capitalized companies on the planet.
Most defense tech startups will likely never be able to produce one thing well enough to win a contract, much less multiple areas that win multiple contracts. So for those that have one or two great products, the best hope for an exit will probably be an acquisition by a bigger defense startup, which will scoop them up to compete for a specific contract or purpose.
“I think you’re going to see a lot more acquisitions from the platform companies like Hadrian and Anduril in the next couple of years,” he laughed. “Something is indeed happening.”
Conclusion
The acquisition of Datum Source by Hadrian is a significant move in the defense tech industry, as it allows Hadrian to partner with early stage startups and help them scale up production. This move is likely to be followed by more acquisitions in the industry, as companies look to consolidate and expand their offerings.
FAQs
* What is Datum Source?
+ Datum Source is a software company founded by SpaceX alums that uses AI to help hardware companies find manufacturing partners.
* What is the valuation of Datum Source?
+ Datum Source has raised $5.6 million at a valuation of $30 million, according to Pitchbook.
* What is the acquisition price of Datum Source?
+ The acquisition price of Datum Source was not disclosed.
* What is the future of acquisitions in the defense tech industry?
+ The acquisition of Datum Source by Hadrian is likely to be followed by more acquisitions in the industry, as companies look to consolidate and expand their offerings.