Autonomous Seas: The Rise of Saronic's $55M Defense Venture

0:00In what I view is a significant boost to the rising sector of maritime automation, Sironic, an Austin-based startup, is focused on autonomous defense ships, and has successfully secureded by a significant significant. sailing from San Francisco down to San Diego. And, you know, we spent a few months in California and then we sailed across the ocean to the South Pacific. We visited virtually all the islands in the South Pacific and ended our boat trip in Vanuatu. We, you know, visited Tonga, Fiji, Samoa, pretty much everywhere in the South Pacific. And we lived on a boat for an entire year. So for me, when I see, you know, any of these sort of startups that are specifically in this maritime space, this is very interesting to me.

0:55I think I'll have some interesting insights on, you know, what may or may not be useful in some of these situations. But of course, this is more focused on defense, which I do not have a ton of experience in, was never part of the military or anything like that. In any case, this is really, really interesting. So the funding round actually witnessed leading participation from caffeinated capital. They also had a few other kind of notable VCs, including 8VC, Andreessen Horwich, which of course A16Z, one of the tops. They had Lightspeed Venture Partners, Point72 Ventures, and they had a few others.

1:28I think interestingly, the US Innovation Technology Fund also put into this round. So this was founded by Dino Mavrucas, who is an ex-Navy SEAL. And that's, you know, Sironik's mission is very crystal clear. Essentially, what they're trying to do is engineer autonomous surface ships tailored for the navy and other defense customers within the u.s alliance so while autonomous maritime vehicles aren't entirely new with companies like you know sail drone i'm already making a bunch of waves they have over 100 million dollars in venture in venture capital i believe for kind of research vessels the focus on defense by saronic i think kind of distinguishes its market position so other firms like y combinator-backed shown are directing efforts on tech to retrofit existing ships for autonomous navigation.

2:17I think what's, you know, really the unique proposition of Saronic is that they recently said, quote, we build our boats around the mission and not the mission around the boats. Instead of adapting legacy platforms, Saronic innovates from scratch, aiming to bring aiming to bridge the gap between large naval ship manufacturing and the need for specialized autonomous ship design. So currently the company's spotlight is on two prototypes. They have a six foot spyglass and a 13 foot cutlass. And these are actually very small ships. I guess I'm sure you can imagine, right? Six, six feet. This is like, like a rowboat pretty much.

2:59Not even right. And a 13 foot. So they're, they're really going for very small and I'm assuming very versatile crafts. These vessels are designed with some really cutting edge, remotely updatable software and an ability to handle varied payloads, even in communication challenge zones. So the thing that a couple of things I'll say here, these are very small. So I'm assuming these are meant to go very fast and get into places. They're probably hard to hit. They're a very small target. So I'm assuming that this is great for, you know, that when you look at the military, one thing that I think is interesting though is it says these are remotely updatable uh they have remotely updatable software this is actually something recently speaking with some people in this industry specifically uh looking at the military this is something typically I actually see people wanting to avoid you do not typically want remote updatable software on your ship because if it's remote updatable that means it's prone to be hacking or hacked essentially something that a lot of people are working on right now is you know essentially computing on the edge aka like making these ai models like run on the actual tank or on the actual humvee or on the actual um you know vehicle itself if it's going to be autonomous self self-driving because the problem is uh if it's you know relying on anything in the cloud then that can get severed the connection can get severed if it doesn't have connection it doesn't run it can't update or of course, you could have a remote hack that is, you know, essentially updating a piece of hardware or a piece of software onto it that is, you know, going to render it obsolete.

4:38So that's my only thing that I think is a little bit, I don't know, I'm a little bit skeptical on. But in any case, I'm sure they're, you know, creating encryption in other areas. But you know, we do know a lot of our geopolitical adversaries here in the United States, when you think of people like Russia or China, etc. are very, very sophisticated in their hacking and in their, in essentially that whole side of the their military. So something that I would definitely say is important to think about. In any case, the US has already the US Navy has already signed two R &D agreements, which I think is definitely a testament to the startup's potential.

5:16Anheim, who is a journalist recently spotlighted a shift in the VC landscape, more investment is definitely right now, I believe, pouring into defense tech. So in fact, 2021 was a banner year for US-based defense tech startups, raising around 2.1 billion across 53 deals. And I think the pace isn't relenting. So Helsing, which is a defense AI startup, they recently raised a whopping 223 million in a series B round. close on its heels there's castellayan and mock industries which secured substantial funding for their different defense tech initiatives so what is driving the surge in defense tech spending a lot of people are talking i think there's a lot of things that play into this right now um you know i think someone that was kind of like on the edge kind of pushing this forward before it was super popular of course a lot of people think of palmer lucky who is you know kind of the founder of oculus and after selling that to Facebook and then I believe getting kicked out of Facebook by the leadership there he obviously had a you know sizable check from the the sale I believe they bought Oculus for around three billion dollars and he went on to go and start Andro which is a defense startup they're building a bunch of autonomous you know aircrafts and some other you know drones and other interesting things in the space and he's been like a very vocal proponent of, you know, essentially in tech, a lot of times we see people that say, you know, they're, they're too good or they kind of have this, you know, superiority complex against working with the military and the US government.

6:52His, you know, line of reasoning is that tech companies that are in America should 100 % be working with the American government to defend the country that they are, you know, operating in as it's definitely in their best interest. And so I think we've seen kind of a shift in the VC landscape where, you know, you used to have companies like Google, which refused to do any work with the US military. And so I think it's becoming companies and venture capital is definitely warming up to this idea. In addition to that, I think the geopolitical chessboard has, you know, of course, the ongoing Ukraine conflict, which is if you just looked at it from a political perspective, there is definitely more lawmakers on the Democrat side that are more publicly supporting that and probably more on the conservative side that are less in favor of funding that conflict.

7:42And so I think because of that, of course, Silicon Valley, where you typically had this pushback against working with the military from employees at Google who were, you know, had a higher chance of being left leaning, all of a sudden there's kind of this like big conflict that I believe, you know, own political party is really talked about the importance of. And so I think, you know, things like that also are kind of shifting the mindset of people on the right and left as far as working with tech and working with, you know, tech in the military. So I think there's a bunch of also regulatory shifts in China that are affecting tech exports and investments combined with some really proactive U.S.

8:21policies like chips and the Science Act are kind of recalibrating global investment strategies. However, I think amidst all of these global, you know, currents, Saronic remains focused on its core strength. As Marukas puts it, the company is not just another boat builder dabbling in tech, but is a bona fide tech firm addressing the unique challenges of maritime autonomy. So far, Saronic's voyage seems very promising. I think they have$70 million in venture capital already in their bank. And I think they have a really robust team of around 45 people. So the startup, I think, is poised to make some big steps in maritime defense tech, and it's definitely a company we'll continue to follow into the future.