Max Buchan, CEO at Valarian: Building infrastructure to secure critical systems

0:00Max Buchan:Hello and welcome back to the Scaling Europe show presented by Deal. I am Seb Johnson. I'm joined today by Max of Valerian. Valerian is one of the most exciting companies being brought across Europe at the moment. So thank you for joining me. Thank you, Seb. Thank you for the kind intro. Not at all. I think what you're building is super interesting and very much of the time. So before we get into everything, can you just give a super quick intro to who you are, what you've built? totally so valerian is a dual purpose secure infrastructure company and essentially what we do is we build infra for running subsystems whether it's in the field or whether it's in the cloud we are dual purpose but we do see most of our growth right now from the defense sector amazing and like what why this business what kind of drew you in about building this problem at this point in time yeah it's a great question and running the risk of going on too long a backstory but I'll give you a bit of context.

0:46So I was on a kind of really early stage team in a business called CoinShares before this. It was just me and the CEO, a guy called Ryan, who was a great friend of mine, who was this division one American football player from Duke, had an incredible amount of energy. He moved over to England to start this company. And essentially what it was, was a regulated derivatives business in crypto. Bearing in mind, this was 2017. So it was very unsexy at the time. It wasn't ETF, it was one of the exchange traded notes. So these were like synthetic swaps. It was a really interesting business. We didn't raise any money, by the way, because, you know, VCs weren't interested in that kind of thing at the time.

1:19But within 18 months, that business went from zero to about 55 million in revenue. So we didn't need to raise it, which was way better. So we built the team from a few of us to about 250. And then that business went public on the NASDAQ, about 1.2 billion. So it was kind of this crazy growth trajectory. So I came out of that company when I was 24 to go and start Valerian. And the reason I did that, the kind of thesis was, back at CoinShares, I had offices in New York, London, Stockholm, Paris, and Jersey. And one of the big problems we had was around data exfiltration. So I really started Valerian as this kind of like digital infra company to really help with the data sovereignty issues.

1:54But again, it was super contrarian at the time because everyone was like, oh, the world's going toward maximum globalization. No one's going to care. And so we made this really contrarian bet, started building this. And obviously we're in this era of mass deglobalization right now. So it's kind of an interesting place to be.

2:10Max Buchan:Yeah. Can you talk a bit about, you know, I guess maybe some traction today? what kind of companies are you working with what are the specific problems that you're helping themselves it's really hard to go into specifics only because like of what we do um with specific customers but right now like i'll give you i'll give you two so we build a for instance a rugged version of what we do to build compute come systems you know privately hosted airlines but in the field um that was really interesting that's kind of our first foray into the edge another one is working with one of the tier one model labs to basically run so our platform's called acra so it's basically run one of these models inside acra but then you replace the you have basically your rag becomes this kind of classified database so that you can run it on the most classified systems within the national security kind of apparatus um so those would be a couple of like use cases we have um right now but we're just doing some really interesting and some pretty gnarly stuff as well amazing it's it's becoming so important in a given the geopolitical circumstances given what's going on across the world right now have you noticed things change in the last few months even yeah i'd say in the last few weeks uh yeah you know it was wild like going to this new year and having venezuela then greenland and then all this but it you know it's funny because as i as i mentioned i didn't come from this ecosystem in any way shape before right literally came up fintech company that went public and all that good stuff but i started building this company and the thing is when you when you're super young and you come out of a growth journey like coin shares you think every company you do is going to be like 18 months 50 million revenue and move you know me the reality is this was probably two orders of magnitude more difficult to build than i anticipated right like complexity of building like virtualized onclays for running stuff i guess you know when you start companies i actually think you should be super naive because otherwise you would never do it um but it was just so much more difficult and three years in was building this stuff and i met the person who became my co-founder this guy called josh and he had spent the last 12 years at palantir technologies he's a managing director over there but had spent 18 years army slash special operations in the u.s so he had spent like all his time either serving or a palantir and so he wasn't super interested in being fenced nor was i it was just that we were approached by a customer to do a certain thing and scale what we had done the kind of infra wise so yeah we got slightly pulled backwards into it but i would say like it was really difficult for us doing anything in the uk at the beginning we actually had to prove ourselves ironically in the us to legitimize ourselves so that i could come back to england and try and preach to the government that the stuff worked it was totally bizarre and i do think that's a fundamental challenge we have here um but yeah it's nice that we've kind of anchored ourselves now especially in these kind of changing geopolitical times we live in and how do you think about that going forward are you going to still be trying to serve both markets, US, UK, and also across Europe as well?

5:08Yeah, I feel like my answer to that kind of changes every day at the moment, right? It's a very moving target. So we have a couple of entities in the US that services that piece. And Josh, who I mentioned, lives in Wyoming, of all places, on a ranch there and commutes from Wyoming to London. I don't think many people do that. But he runs that side of the business. But I think fundamentally our growth will come in from Europe. I mean, there is a huge move toward, because I think one thing that is really interesting that Greenland showed is like how many of our systems are predicated, not just kind of on US government support, but also on US technology support, right?

5:46So how much of our intelligence services are familiar with, how much of that is predicated on certain critical American software companies? and when i said this it was more an observation because i spent so much of my time in the u.s government apparatus and i it more i would get kind of teased by my american counterparts of like imagine if we put sensitive pentagon data all in all in england it just obviously would never happen right so there's a there's an element of reciprocity here as well but i think fundamentally it obviously has been a been a wake-up call the last thing i'd say is when i kind of observed this i was called like protectionist and nationalist and i was like it just from a sense of kind of like logic right we just don't know what's going to happen in the next so it makes sense to build certain elements of resilience so we can also just kind of um start to structure stuff how we need to structure them right actually i i yeah maybe it did sound

6:42Max Buchan:protectionist and nationalist at the time but i think there's a yeah i think the last few weeks has shown that that's kind of what we need to be i don't think it's you know we need to make sure that we've at least got some level of independence and suffering to you over our core systems and our data so that we're not left in precarious situations um and you know you raised a big seed last year 20 million dollars as you came out of stealth um what was that process like raising the fund now deploying it yeah so we'd we'd rate it so we'd raised like a 13 million seed originally from a couple of like uk funds um yeah like you capsule it etc and there was one phenomenal national security focused fund called md1 um it's a couple of friends of mine who had come out of british special forces and set up a small targeted fund and they were unbelievably helpful but what happened is because we were doing all this stuff in the u.s and we were this kind of random british startup that no one had heard of it was slightly bizarre so we raised the seven million top up from a a fun called scale ventures in austin who have been phenomenal who was super super close with um you know the department of war and all the kind of facets that that encompasses businesses so i think for us it was just really helpful having a name on our cap table that was kind of a known quantity to the types of like you know socom you know jsoc those kind of entities knew them and it just kind of gave some legitimacy to conversations we were having i would say and do you think uh actually has anything changed in the last few months last few weeks i imagine like demand for your company both from real businesses governments but also just from a wider sovereignty perspective has probably like increased a lot are you seeing more in bars for vcs are you thinking about kind of capitalizing on this moment at all i try not to talk to vcs um just like not a huge and i don't mean that in a negative way it's just like i think it's it's now a cool space to be like it suddenly has become a cool space to be but i think like we're so focused on like on the customer and i'll give you kind of two examples of this one is um the kind of rise of the defense bro has been quite interesting um you know you've seen this as it's become such a sexy topic one of like kind of top-down um cramming of technology down people's that we've seen at least in the market we've literally been like on basis we've been with engineering teams we've been at the lowest levels um proving stuff for you know sending our engineer and whatever um that is a challenge this is one of the hardest businesses to break because for instance clearance level right that's something you don't have to deal with anywhere else right yeah how high how high your clearance vettings on engineers versus salespeople quote a nightmare and that's why there is such a huge moat around the defense primes like bae systems kinetic etc and i think probably 18 months ago we were told you know either laughed out of the room or told us don't don't do defense and now it's really cool because you know we're getting into like final stage like quite quite meaty contracts that are quite critical to the country security across europe etc so i feel like we finally kind of hit this inflection point uh i guess it's much probably irrelevant to the vc thing but i think as a company we've hit point where we're kind of taken really seriously from a technological standpoint right that we can actually compete with these mega mega goliaths amazing so you're seeing kind of all everything line up like you would right your technology is reaching the point where you are now getting the respect that you deserve the market is well the the geopolitical landscape has changed for better or worse but great for the company in terms of promoting sovereignty and so it feels like everything's lining up for a huge 2026.

10:11Totally I kind of half jokingly say Trump's my best salesperson because you're right and I think the interesting thing and I think about this a lot about kind of like I'm predicating what you're doing on on sometimes not all the time but sometimes being contrarian right because if you do make bets that then suddenly that the world kind of tilts um to where you are because for instance i couldn't build valerian today like if i started you could give me a hundred million dollars it's it was so difficult to build but also the deep relationships of trust within the now set the defense kind of uh ecosystem and not just here by the way this is everywhere you know through western eastern europe um it was just such a difficult thing to build and and i don't know if it's luck or something but it is just that thing of we laid so much the foundation and now being here you know it's kind of ours to ours to lose at the moment right in the sense of like i feel a huge responsibility to make sure we execute well

11:06Max Buchan:and how do you think about the comparison to um to pallantage is that something you resonate with is it good for the brand do you try and kind of create some distance what's that relationship like yeah i mean i look it's a great company and we've had a bunch of people out there and stuff um i i try not to talk about like slant it i i just because i feel like every five minutes there's a we're the french version of palantir or the swiss or whatever and i'm kind of really keen to not be the x of y yeah and i think technologically speaking to be to be kind of clear if you think of like palantir between foundry and gotham the kind of almost more data aggregation and analytics that kind of piece and and and gleaning intelligence we're very much the the bit underneath which is data infrastructure architecture type stuff so i i i feel there's quite symbiosis there now i'm sure over time it becomes slightly more competitive further down the stack um but yeah a lot of respect for them obviously no ton of ton of the team both at the board level and and otherwise you know great company um and yeah for us at least it's a i think it's really inspirational of like how difficult that that business was to build um obviously my colleague joined it in 2011 um which was still fairly early on but like you know the fde model is now so popular yeah back then they were kind of laughed at it was going to become a service business so it is amazing to see a company just continue to break through what the traditional norm was you know yeah i mean they've had an uh yeah it's they've been building that company for like 20 years or whatever or longer and it's it's just taken so long now it's absolutely exploding as one of the biggest companies in the world and so many of the like to your point like so those contrarian bets that they made early and now coming to fruitition um yeah absolutely i i met with a chat not to name names who was kind of original like you know the table like six seven people were were there and and it was really interesting hearing that story um but you're absolutely right i think some people think it's it's a bit newer than it is just because it suddenly got like meme stocky and kind of you know people were looking at markets but it was that early i think probably if i'm ryan and again this is all public but that kind of early agency contract right that was a lot of software was predicated on it is those early wins that are so asymmetric and i feel like we've had a bit of a similar ride like the first couple of people within the industry to kind of really battle on us from the customer side um was so important to build the foundation and given everything that's happened in the last few weeks for last few months on the geopolitics venezuela greenland and the whole sort of like breaking of the relationships between europe and the us what do you think we should be doing right what do you think our government should be doing like one of the examples that i always think about is um the uk government recently implementing open ai i think it was the justice department you know like they started rolling it out do you think we should be rethinking about some of those partnerships relationships with the us tech companies yeah it's an interesting one i think look there are two you know without kind of putting like tinfoil hand too much right there are two kind of piles that people talk about very publicly which is one is like it's really difficult sorry it's really important to to distinguish between a world in which the u.s is kind of like neutral so they don't they don't actively try and do something to us but also they don't really care like so in the sense that they're not actively working against obviously if they're working against we're super stuff because even down to our nuclear strategy so much of it is predicated on on assets in the u.s for instance um but you know an element of kind of neutrality assumed in the sense of like you know u.s less involved in the new nato for instance right less budget less kind of um uh less less top cover etc i think for me the idea of us building stuff like there's an amazing company that i met the other day who's building silicon chips like in the uk like this kind of stuff like even at the chip player for doing that stuff is so incredible and when i was last in like in government having this conversation i kind of stepped away from the national security apparatus that we talk about a lot and just purely talks about economic growth right because the reality is last year there was you know a billion pound major defense contract right which goes to an american technology provider i said like the reason why it's so important for economic growth to stop championing companies at home is also just the fact that that one billion pounds translated to what 30 billion pounds you know increase on the on the now stack in terms of market capitalization so that's a 29 billion pound delta not aggregated here at the same time as you know exfiltrating data so i said a time where the london stock exchange is now below mexico's we're no longer top 20 it's probably a good time also even outside of a defense parameter to start working out how we can build our own kind of sovereign alternatives and create economic growth but you know it's very difficult is i would say the last thing for me it was bizarre when i got this kind of accusation of being protectionist because in frat in france they always put french companies in germany they do and the us we're one of the only countries i've ever worked in where we kind of don't try and help our own companies so it's kind of a bizarre situation as well i mean it's crazy every founder i talk to says that one of the problems in europe and especially uk is about procurement and you know procurement culture not just in government but also in companies and enterprises and old established industries that are not willing to try startups and at your point what America has done so well is that they've become the primary procurement partner for so many so many amazing tech companies and they've put in so many billions of dollars to help these tech companies get off the ground earn some validation and just win big contracts and that's why for me like it's amazing to see you know the UK government work with OpenAI and implement technology in a great way but like is there not a better alternative i know that we haven't gotten an lm but even you know let chat in australian france you know we need our government to be spending money on our tech companies and the slightly bizarre thing i said this to someone in number 10 the other day is that we actually do have wins here we just don't talk about them yeah like the government will publicize an open ai panther deal but there are a lot of uk companies that have done cool stuff but they are just also not publicized and i feel like that will be a super quick win you know like a free win to just say hey we actually bought this thing and it worked i think you're absolutely right as well about the ecosystem in the u.s like you know scout got me on this fit i can't remember what it was called it was this u.s army thing i was in dc and and it was kind of like it was some really cool people like you know daniel driscoll the secretary of the army was speaking um i was on a little panel thing about kind of innovation um and brandon from shield ai which is a phenomenal company and one thing really resonated me with from from what the from what driscoll said which was andura's awesome pan is awesome your shield they are there they're going to make 10 12 more decacons in the space because they need it to stay ahead right to stay at the pointy end of the spear and i was thinking that's incredible i'm the forward leaning and then i come back here we haven't got a single one here like we haven't got a single like dual purpose or 20 core but then also you can see why because i have so many times almost moved to the us right like last time i was there i was like do i even want to go back it's just like once you use love here it's like playing on easy mode in a way it's just people want to do stuff yeah and i was thinking like if we don't you know the fact that people keep give up and they move to you know the u.s or dubai is is one of the reasons we're in this mess so that's kind of why i doubled down and i'm wading through it