NYSE | Varda’s $251M Raise, Firestorm’s Battlefield Factories, and Bedrock’s Ocean Robots

0:00Music

0:07It's Tuesday, October 13. Welcome to the Space and Defense Update live from the New York Stock Exchange. I'm here with my co-host Jack Kuhr. Jack, great to be back as always. Good to be back. Did you have a good weekend? I did have a good weekend. I was solo parenting. So it was a long weekend. I have a 15-month-old named Julian and he's adorable and he started to walk. but it's also a long weekend. Yeah, I feel that. It was great. I feel that. How about you? It was good. It was good. I was actually at a, I was telling you earlier, I was at a music festival this past weekend. People have been calling it Unk Fest.

0:42It was in, it was where Coachella is held in Palm Springs. And the lineup was basically, it was a very, each day was quite short. It was SpaceX and Anderle. It was SpaceX and Anderle, exactly, exactly. No, but anyway, but Calvin Harris, who's like a, you know, an old, you know, I should say old DJ, but like, you know, older DJ who had been, who I've, you know, grew up listening to played and it was really amazing and super nostalgic. And everyone around me was all in their like 30s and 40s. So I didn't feel super out of place. Yeah, it was good. Yeah, this is Unk is now millennial. Actually, I do have a surprise.

1:21Okay. That could have been fitting for last weekend. Okay. So let me show you. Okay. And I brought it to the show. And it is... Oh, wow. Payload bomber jacket. That is super cool. And that is for you, my friend. What? Yeah. Because I have my own one, too. Oh, that's awesome. That is awesome. Yeah, check it. We got the payload, the payload logo here. Payload branding, American flag. That's pretty dope. I know. All right, thanks. Put it on. Come on, put it over the blazer. Let's see if it works. All right, let's see. But I had a real... It definitely fits. It's a quince jacket. It definitely fits.

2:04We'll rock these on the next show. Thank you. Thank you. These are great. I had a very New York experience putting that together. It was like days in fashion district. We're going to have to update the swag shop now. Yeah, I know. I know. This one might be a little pricey, though. Well, actually, speaking of payload and tectonic, So both our space and defense verticals, we had some big news today. So we have our Investor Summit coming up in a few weeks. So as a reminder, that is one of the most important capital allocator event for the space and defense industry. We have over$8 trillion of institutional capital represented at this event.

2:39We just announced today that the keynote, or I should say one of the keynotes, is going to be Dave Lipp, CEO of Blue Origin. So it's going to be an off-the-record event. So unfortunately, we're not going to be able to tell everyone what gets discussed afterwards. We're not doing this show. We're not going to be doing the show. But I think it's going to be really, really exciting. I've never heard Dave speak at a conference before. So actually, I don't know if he does this very often. But we have him coming. We're super excited. We're going to have a conversation about all of the huge news that Blue's had, especially the fundraise that they're imminently closing.

3:13And hopefully, they'll have New Glenn back on the pad. And anyway, so more on that. But today we're not talking about space. We're talking about defense tech. We have a number of great guests today. So we have Will Brewey, CEO of Varda on the show, Dan Maggie, the CEO of Firestorm, and then Matt Turman, CEO of Bedrock Ocean. But Jack, I know you wanted to talk about Mr. Paul Graham. So why don't we start there? Yeah, let's bring the Twitter ecosystem into this show a little bit. The conversation around defense tech made its way to X last week with Paul Graham tweeting. And I'm curious your thoughts on this.

3:50His tweet was, talk to someone recently who knows a lot about defense tech, and he made an interesting point. The test of most military hoarder hardware right now is whether the Ukrainians want it. They have a hot war going against a determined opponent, and they know what works. There was then an interesting kind of, I guess, response or quote tweet from Michael McFowell, who was the former U.S. ambassador to Russia, saying, Yup, and they mostly prefer their own weapons these days. Interceptors for rockets and drones with rocket engines is what's most needed from the outside world. So... What's your take on that?

4:33No, it's just... I think it like... I mean, intuitively, logically, it makes sense. You can be in the Pentagon kind of coming up with these war games, or you can be in Silicon Valley kind of trying to determine what the warfighter needs. But what the warfighter needs is on display right now in the war in Ukraine. And it really, you know, triple clicks into maybe tech that isn't really that useful or tech that is like in hot, hot demand. And that can give some pretty powerful demand signals from coming from both the Pentagon and what the defense tech world should be building. Well, so it's interesting.

5:13So, you know, one of the things that that that quote made me think is Ukraine isn't the customer anymore. It's effectively competition. Right. So if they're building their own product, they're iterating in a few weeks, they prefer their own domestic production. Then if you're selling drones, you're actually competing with their domestic industry. Right. And that's obviously, to your point, it's a hot war and those products are being tested, developed and iterated on live. But at the same time, I think it is important. Ukraine is a very particular kind of war. So I don't think you need to over index the entire industry on it.

5:49It's, you know, it's land based. It's attritional. It's drone saturated. You can argue that is the future of warfare, but it is one particular type of warfare. So, yeah, yeah, that being like if you look in Iran and the Strait of Hormuz, it's a very different type of warfare that, yeah, that'll be, we should ask Matt Turman from MedRock, who's doing ocean intelligence, a question on that, because, you know, yeah, that takes us into like, hey, where are the mines? What is the, what is like a contested waterway looks like versus a land contested area? So, yeah, definitely. Okay, let's talk. So a couple other quick pieces of news.

6:29So drone dominance, the drone dominance gauntlet recently had its phase two completed. They're actually on to phase three. And as a reminder, the drone dominance program is the Pentagon's key way right now of buying small attack drones. And they've effectively like they're running this almost like a tournament. So the companies show up with their hardware soldiers actually fly it in combat scenarios. and the top scorers get orders effectively right away instead of waiting for years and years for a contract. And that whole program is about$1.1 billion. And the Pentagon is paying about$5 ,000 per drone, wants to ultimately get that down to$2 ,000 a drone.

7:07But so as a reminder, so Gauntlet One took place back in the spring. 11 companies got orders for a combined 30 ,000 attack drones. That was worth about$150 million. Gauntlet Two was back in the summer, but the results actually just came out a few weeks ago. This was a harder one where they were, so the actual combat scenarios were more difficult. They were testing deep strike, so finding, tracking, and then hitting targets from 15 kilometers away. Interestingly, all of the drones were actually able to complete that. And they also were doing close quarter maneuvering. So a few kind of results from that.

7:42So Perennial Autonomy, it's a company backed by Eric Schmidt, actually. They won the deep strike category. NEROS won close quarters. Like I mentioned, every long-range drone actually hit the 15-kilometer mark, which is great. And just as a comparison, in Gauntlet One, only 24 % reached 10 kilometers. So that iterative development process is really going strong. And then 60 ,000 drones are being awarded across the top five in each category. So anyway, one thing I find interesting is that the Army actually says that the gap now is train pilots at the squad level, not the actual drones. So the drones seem to be not so much a tech issue anymore and much more so a piloting problem.

8:32So there was an interesting article in the Wall Street Journal that took kind of the opposite take of this. It wasn't related to the Gauntlet program, but it was an army test in the desert. And basically the findings from it, where they would have these trainings and they would have drones take off and have it act as if it's a warfighting environment, where under this desert sun, which could be a lot of our potential new battlefield, particularly in the Middle East, a lot of the drones failed because of the heat. And it started off, the article started off, Under a blistering desert sun, the U.S.

9:17Army strained to show it had become a modern AI-powered fighting force. So basically it was maybe these drones work well in a certain environment or a normal environment, but what happens if the drones are two years old and it's 110 degrees where your iPhone is not going to work in the desert in 110 degrees if you just put it outside? So how do you get a very cheap drone to do that? I think like it's a little bit a lot of the point with this drone dominance and these testing is to Put forth not perfect tech and then continue to iterate it So for example, it's like better that you have a test where not everything goes right and you realize oh wait Maybe we should prepare for like a really hot environment and then folks can iterate go back realize they need to change the technology a little bit.

10:09And I think that's a very positive way of procurement versus just a very expensive machine that works on day one. Yeah, it's totally fair. Actually, to that point, phase three is coming up. That's the next round. It's open now. So they opened in September 28th,$450 million to buy 60 ,000 attack drones, plus an option to buy another 40 ,000. But to your point, much tougher scenarios than we saw in phase two and phase one. Should we talk AutoWARCOM? Yes. Okay, so this was a... And we're just, like, running through the autonomous... The drones and autonomous warfare headlines because it is... You know, that is where everything is going.

10:49So this is a... On September 30th, at his State of the Force address, Hegseth announced a planned Pentagon command focused on expanding the military's use of drones, robots, and other autonomous systems. The idea is to give drones and robotics their own four-star command, which basically increases buying power, leadership in the Pentagon, access to leadership. And it is a kind of a triple down on autonomy and buying and procurement. Yeah. And honestly, the biggest piece of all this is that this is the biggest org chart change for drones, effectively, since the Pentagon announced the gauntlet program.

11:37So Congress still needs to be legislation from Congress to actually kind of finalize this. But I think the thinking is that Congress is going to be friendly to this idea because the Senate's version of the 27 defense authorization bill already calls for this type of command. So anyway, I think the big question, which we can actually talk about Dan, which we can talk with Dan later, is like for founders, who's the customer now, right? Is it this new command? Is it the services? Is it SOCOM? So I think that's going to be a little bit of a point of contention and figuring out. But clearly a positive for the sector.

12:14Yeah, that's right. It puts kind of drone procurement at the forefront. Yeah, that's right. Okay, we have our first guest. So Will Brewey, CEO of Varda. He's joining us remotely. So let's bring him on. Will, there he is. How are you? Hey, Mo. Good to see you. Hi, Will. Good to see you. Hey. I guess we can call you Brewery, right? That's okay? I know. Yes, of course. Yeah, we've known each other long enough now. There you go. Well, Brewery, welcome to the show. Thank you. Thank you. It's always a pleasure. I see you're sitting in HQ. We are. Yes, yes. So assembly line's behind me. We've got vehicle number 10 and 11 coming off the line right now.

12:57Oh, amazing. Well, I can't quite see the factory, but it looks bigger than the one I visited. I trust that all this money that you've raised is going to good use. Yeah, that's right. So, yeah, we raised a$250 million Series D or a$251 because, you know, apparently our fundraising is as precise as our vehicle architectures. No, and we've already put a lot of that capital to work. One thing I'm excited to chat about is the fact that last week we became the first company in history to fly multiple commercial reentry vehicles simultaneously. And so the fleet is happy and healthy with all systems nominal right now orbiting the Earth every 90 minutes.

13:35That's amazing. Congratulations. Thank you. The one in the 251 definitely triggers my OCD. So when I saw that, I'm like, maybe I'm just going to round down to 250. So let's take a quick step back. Tell us about the company, what you do. I mean, there's been an evolution in the business model over the last few years. So give us a little bit of, like, what are the core products now, and what are you guys focused on? Yeah, so the core thing we make is a reentry vehicle. And there's only two companies in the world with this technology, SpaceX and now Varda. They can fly something to orbit and fly it back.

14:10And so we have two lines of businesses that stem out from that. The most exciting one is the fact that we can develop novel drug formulations in microgravity, because without gravity, you can tweak the chemistry and create drug formulations that you otherwise would be impossible to create on Earth. And by formulation, I mean IV bag or shot, pill, or inhalable. So we take old drugs that already exist on the market and make them have a better formulation, thanks to being able to use microgravity. And then, of course, we also have a government line of business, because flying through the atmosphere at Mach 25 is a unique capability, and so we can offer that hypersonic environment to our government partners at high rates and low cost.

14:53Yeah, you know, it's Varda and Arkea, which is Payload's parent company, have very similar trajectories as we started off as just a pure play space business, and then we launched Tectonic Publication, which is defense tech, and then we acquired Decoding Bio, which is a bio. So like you guys being a space defense and biotech business, that is our kind of media coverage as well. Do you have a coincidence, a correlation or causing? I don't know. I knew Mo early on, you know. That's true. You know, great minds think alike. What can I say? Yeah, exactly. You're saying. Do you have, I mean, you sit at the intersection of these three.

15:35How do you think of Varda as a company? Is it like how would you kind of project it out into the world as what your core competency is? Yeah, that's a great question. What is a culture internally? Do people feel like we're a space bio business or a space business or a defense business? How does that work? Yeah, it's funny. At first, we were a little bit shy about the fact that we were a space drugs company that had a hypersonic line of business. But after we brought back our first vehicle at the beginning of 2024, we kind of felt the courage to identify ourselves as an end of one company. It's like, yeah, we actually, yes, we're not ashamed of the fact that we have a pharma business and a hypersonic business built on the common tech platform of a reentry vehicle.

16:20And what's really neat about the cultural aspect is there's kind of this gravitational pull between pharma and aerospace, no pun intended, in the sense that for aerospace engineers, there's a reckoning during the ZERP era of 2020 or so where aerospace companies went out of business like Virgin, ABL, Astra and the like because you really need a business on top of it. And so engineers have realized that and they see the pharmaceutical formulation scientists as their ticket off our home planet. This is the reason to go to microgravity from a from a first principles economics perspective. So they're fascinated by, oh, how does how can we develop more formulations?

17:01Because that's how we can launch more spacecraft. Similarly, if you're on the on the pharma side of Varda, you're attracted to the aerospace aspect in the sense that you're developing formulations as you would at any other pharma company, except for the fact that the challenge of going to space, which is strictly cooler and sexier. And so there's this kind of pull between the two cultures, and you get this really cool amalgamation of a space drugs company. So you guys did raise$187 million. That was your Series C back, I want to say, about a year and a half ago. What has changed since then to now as far as the – what has allowed you to go back into the market and raise a bigger round?

17:43Mostly the maturation of our lines of business and production. So I guess you can think of it as three things. We have our production rate has increased dramatically. So back then we had just flown three vehicles. Now we launched our eighth and our ninth. The next one goes up next week. So production rate is great. Our pharmaceutical line of business and our pharma lab is probably the most significant change since the Series C. We built out an entire biologics lab. We hired an entire pharma team. And now we have a very clear customer flow of which customers are now moving towards flight. So United Therapeutics is the first through the pipe.

18:20Just a couple of weeks ago, we got a go for flight on our first molecule with them. And the way the customer flow works on pharma is we partner with a pharmaceutical company and we go through their portfolio of drug assets. And we ultimately put our scientists and theirs together and need to answer two questions for every drug asset. first is can we improve the formulation with microgravity technically? And second, does it make sense economically to do so going to space and back? And if the answer to those two questions are yes, then we spin off a contract for that idiosyncratic drug development and that formulation development, and we develop the process for microgravity, unique to microgravity, in our pharma lab here at Varda, and then we fly that drug.

19:03So that's the customer flow, if you will, from inception to flight. Once we fly the drug, we bring it back. That formulation is now IP that we share with our pharma partner, and then they take it from there to go to clinical trial and to market. So you can just think of us as that single unit batch operation. And that entire flow is new and matured, I should say. We always had it in this idea, but now it's matured and actual customers are moving through the pipeline with actual drugs. So that's the biggest change since Series C. And then, of course, we've filled out the manifest with our hypersonic and government lines of business.

19:40Vardo was started five or six years ago, and a lot has changed in the biotech world. Particularly, there's a lot of conversation around the AI influence on biotech. How have you seen that? Because you have a breadth of customers that you speak with every day. How have you seen the impact of AI maybe infused in what you guys are doing or help with that relationship or help with discovery with Varda and partners? To us, it's an accelerant. And so it's not necessarily an end in the sense of, like, we're not developing foundational models or anything like that, but we're using the technology extensively to do what we would have otherwise done except better, faster, cheaper.

20:20We've invested heavily into it. So we have an entire team at Varta that went from one to nine in the last year of folks just dedicated to tying together all of our enterprise systems through our AI layer. So you can do every single enterprise application other than sensitive ones like HR and finance and stuff like that, but every other enterprise application is tied together under one interface. And so I can ask a question that's holistic across the entire company to our, we call it ship, because of the Star Trek sentient ship. We would say, ship, you know, what happened to the left wing? Did it explode or whatever?

21:01So we can ask that about Varda. So it's almost like Varda itself is sentient. And so you can ask it things like, oh, what was the most expensive purchase last week? You know, stuff like that. How are the institutional investors thinking about the business and the business model now? Like, how has that gone? How's that how has that evolved over the last couple of rounds? Yeah. So at first it was we had to break it down to first principles of say, hey, here's the discounted cash flow. Let's take it all the way to basics. Now build up this business model because it is an end of one company. Now, you can decompose it into an aerospace company and a biotech company.

21:36So it's not that hard. And then you just take the superposition of the two. But now, so that was kind of previously. Now, investors are bought into the idea of microgravity-enabled pharmaceuticals. So we don't have to go back to discounted cash flows to talk about how the business succeeds in the near term and the long term. And they start to understand the comps that they can put together to build up a business model that looks kind of like ours. How are you modeling internally? I mean, for a company like yours, like you said, it is N of 1. There hasn't been any other company that's tried to do this at scale or at all.

22:13Correct me if I'm wrong on that. How do you model your revenue? Because so much of this is experimental. And how do you then turn that into a forecast or a projection that investors can look at and say, okay, this makes sense to me? Yeah, it's very first principles based. So we look at what is happening in the drug lab. Do we believe that drug can get to flight? If so, what are the milestones up front and royalty payments associated with that drug? And then what we do is we build capacity slots. So the way to think about our revenue generation is you can think of the pharma lab as continuously filling this hopper of drug formulations ready for microgravity development.

22:53And then we build the manifest or our assembly line to support a number of slots, if you will, or drug developments on a per year basis. So we just keep our drug funnel very rich, and then we model revenue by knowing that those slots, at least a couple of those drugs will go to market, and those slots are what drive revenues in the out years. Then we look at the cash flows, of course. And then on the hypersonic business, it's way simpler and traditional, I should say, in the sense of we're offering the hypersonic environment to our government partners in the same way a rocket company would in the past.

23:25We're essentially offering Mach 25 for the price of a capsule instead of the price of a rocket. And so those contracts look just like traditional launch contracts, except we don't have a rocket. We get to save on the arbitrage there. And is there on the hypersonic business, I mean, like hypersonic testing in general is kind of a vague term to some degree, but obviously you're able to, it's probably a unique capability, but you're able to test and then recover the payload inside or whatever is being tested. Can you just walk through what that hypersonic testing looks like and the advantage of, you know, being able to actually physically take whatever is out and look at it?

24:08Yeah, absolutely. So if you think about a wind tunnel that's used today to test airplane wings, for example, as you're developing new airplanes, you can think of VARTA as a hypersonic wind tunnel. If you took today's wind tunnel and you tried to make it hypersonic or anything above Mach 20 at the sizes that we're talking about, it's impossible to do on Earth in terms of the chemistry, the heat, and the airspeed. And so in order to get a hypersonic wind tunnel, you actually have to fly through the atmosphere hypersonically. So the way that that was done before VARDA is you would buy a rocket and you would put whatever you want to test, whether it be a new heat shield or navigation system, on top of that rocket and fire it into the ocean.

24:43And you would test it and you would send back radio, you know, telemetry of how the payloads were performing. Now what VARDA offers is essentially a better, faster, cheaper version of that mousetrap, we can now get you the hypersonic environment for a much lower cost because you're only buying a capsule instead of an entire rocket. So it's at higher cadence in the sense that we have a commercial line of business anyway driving our production line. And then it's also better in the sense that, as you mentioned earlier, you can recover the actual capsule, which means you get much higher data rates.

25:15You get the actual sample of the hardware back to evaluate either the heat shield or the hardware that you're testing instead of just whatever you can see through telemetry. How has your accuracy improved over the last few missions? The landing accuracy, I should say. Yeah, we actually don't have a driving requirement at the moment to make it more and more accurate. So we have a lot of, I'll call it fat on the bone, that we can hit pretty close quarters. The reason we don't is because right now, Australia is a great landing partner. We land at Southern Launch, and they have a huge range. And so instead of sharpening the pencil on landing accuracy at the moment, we sharpen the pencil in other areas of the business.

25:57But we do have the capability, I should say, to bring in those dispersions as soon as customer or engineering requirements demand it. I ask because I wonder, and I'm sure you've thought about this. I was wondering when the catch tower is going to be implemented. Exactly, exactly. No, what I was curious about is like if you've thought about sort of a business where, you know, you have sort of a government payload that's in that's just kind of like orbiting Earth and military payload, something that might be needed on land. And then, you know, like, you know, resupplies or whatever. It could be a whole host of things.

26:36And then all of a sudden, like, you know, with the snap of a finger, it's like, hey, we need to deliver this to this location from space. Like, I can see that being a pretty valuable asset to the government, just having really important military payloads up in space kind of orbiting until you need it. Yeah, exactly. That is that is the value prop of our next line of business. The way I put it is even. Yeah, no. Yeah. You articulated it perfectly. A fun way to describe it is right now we have two vehicles in orbit, so I can put 90 kilograms of anything that you want anywhere on Earth in 45 minutes.

27:08So and the more vehicles that are up there, the more capacity there is. And because our costs are relatively low, you can pre-position anything you want in orbit. And there's a multitude of things. And the way I think about it more from first principles, if you imagine the spectrum of logistics, if you will, everything from big, fat and slow, like an oil tanker, all the way to freight train and semi-truck, all the way down to last mile scooter. There is a place on that spectrum for when I need something within 45 minutes dropped from space at that mass. And so I think, you know, what I think will happen and what I would do if I were in the government is create a space tactical command in the same way that when close quarter air supports first started coming online in World War II for tactical air command.

28:01Why not tactical space command? Because we have this capability right now today. The limiting factor is kind of just the imagination.

28:11So you need the heat for that to happen for your whole business and capability to work. You obviously need a very effective heat shield. And there's a lot of different conversations around heat shield types. Can you walk through how your heat shield works? And also would love your thoughts on the Starship heat shield debate. whether what you are seeing may constitute something that those heat shield, those tile heat shields, could constitute something that can be reused again and again and again. Yeah, so our heat shield is called PICA. It's a phenolic impregnated carbon ablator. And what that means is the way it works is we buy a very, it's essentially a very thick felt.

28:57And then you put that felt into a vacuum chamber and bring it up to very high temperature, which carbonizes it, which is essentially the same thing as a filament in a light bulb. So filaments in light bulbs are meant to get very hot and glow. So now you have this entire weave of light bulb filaments. So they're ready to get super hot, but they're brittle. So what you then do is you dip it into an epoxy to give it structure as well as the latent heat from melting. And so what happens is as we move through the atmosphere, you have the spacecraft is being protected by a mesh of light bulb filaments as the epoxy melts, it then breaks away.

29:33That's where you get the ablation aspect and takes away the heat. So the drugs within our spacecraft, they remain within plus or minus one degree of whatever temperature we want them in, thanks to the heat shield technology. As far as Starship, and we brought that technology in-house, which you can imagine is not exactly a commodity, given the fact that there's only two companies in the world that can bring an orbital vehicle home. As far as Starship goes, I do not know, unfortunately, a ton about that technology or heat shield, but I would say that from first principles, you do want to treat your heat shield like a brake pad where you service it.

30:07And there's a happy medium there when you're doing brake pads in the sense that you do want it to ablate a bit because that relieves your engineering requirements, but then, of course, has a little bit of a manufacturing cost of having to replace the brake pads. Hey, Jack, remember what the tech was called? The pico? Pico? Something oblator? That's what I remember. Pregnated oblator. Can you tell me that again? Sure. Phenolic impregnated. Phenolic is the epoxy impregnated carbon, because you're carbonizing the felt. Oblator, because it oblates away, yeah. Yeah, P-I-O. P-I-O. Pika, yeah, Pika, yeah.

30:46Oh, Pika, Pika. Sorry, you did say that earlier. Think the Pokemon, right? It's not too hard. Yeah, yeah, yeah. Not to go hard in that one.

30:55So give us more about vehicle 8 and 9. Like, what are you guys doing exactly? Who are you doing it for to the extent you can share? Sure, yeah. So 8 and 9 are both government payloads. 8 is for the Air Force. We're testing a new heat shield, and we have some novel sensors on that heat shield to really understand how it ablates and how it performs through the hypersonic environment. And then nine has a guidance system on it that we're getting flight heritage so that it can, we can see exactly how that new system performs for our government partner through the reentry environment. And those both are right now autonomous in the sense that nobody's in mission control.

31:34We're on call, all systems nominal, and those should be due home by the end of the year. So, Brie, looking at 10 years, like, if you were to describe to someone the importance of Varda's mission and what you think you're going to achieve, like, how do you think about the impact that the company could have on people on Earth? So the the this is what gets me out of bed every every day. So the biggest milestone in Varda's history will be the time when we first inject a human with a microgravity enabled pharmaceutical. That means we got a real person's name, Sally, who's getting injected with a real drug paid for by a pharma customer with a real name through that clinic.

32:17And when that happens, Varda is, I think, too big to fail. We just don't mess it up in the sense that we now have drugs that are required to get to market. via microgravity. And when that happens, what's fascinating is now we have a perpetual demand for launch. Every time we develop the formulation, we have to go to microgravity. And so I think that is like the inflection point where industry has gone from confined to our home planet to slightly off our home planet in orbit. And I think that's the most exciting thing to me. To me, that's on the scale of when fish, you know, land or life, I should say, went from sea to land.

32:59So my goal is to be like Muddy the Mudskipper, the first fish that went from sea to land. It was ugly. It was not beautiful. It was not glorious. He's flopping around in the mud. And that's kind of what we're doing. We're just shipping bioreactors to space and back. But that is literally the epic transition. And it's awesome that VARTA will have started before that transition and will have catalyzed that spark. So, yeah, I'm hyped. That's very cool. Well, Bruit, it was super, I mean, congratulations on all of this. I mean, obviously you have a very, you have a business model. I mean, obviously a very ambitious business and business model, and I appreciate how far you guys have come and what you're doing.

33:39So, congratulations on the funding round, and thanks for being on the show with us. Absolutely. Thanks for having us, Mo. All right. Congrats. Until next time. See ya. that would be that's going to be quite the quite the uh you could setting when we actually inject someone yeah with a drug developed and i think that's really when it's going to i think really hit people as to how important this is for sure you know it's funny on the plane yesterday um i watched a documentary on starship that was like on was it the spacex i assume the spacex directed one. Yeah, did you see this one? I did. They put it out on like X and it was like 35 minutes or something.

34:21I thought it was just interesting to see it on an airplane. Was it a Starlink enabled airplane? You know, it was a Starlink Wi-Fi. So actually, so, okay, so for some interesting, some kind of funny news. So about two weeks ago, Delta Airlines, there's like, have you heard this scuffle with Delta? So like Delta Airlines CEO doesn't want to work with Elon for whatever reason. and it doesn't want to buy Starlink for the Delta planes. It started a little bit of an X war. Yeah, and I would also, like, before we get, like, it might not be that he doesn't want to work with Elon, but he's now working with Amazon Leo, and maybe he sees a certain angle there, and maybe there's some prejudice to Starlink, but it did spark this storm.

35:06Fair enough. So the interesting kind of outcome of this is, you know, there was a little bit of a mini Twitter or ex spat. And the other item was that United and American came out and basically said, like, hey, like, if you don't want to be on non-Starlink Airlines, you can come and, you know, we'll match your status with Delta, basically. Status match. Like, whatever status you are, silver, gold, platinum, whatever, we'll match it if you want to come over. Yeah. Which, by the way, I'm a Delta guy. I don't know. I'm a United guy, so I'm a little pissed because I'm like all these Delta people are going to come over.

35:45They're like hot me. I just flew my first United flight. Did you do that? Did you move over your... Yeah, well, you're not really moving over. All of a sudden I'm going to get my stuff canceled now. Or we're giving a United free promo. So I moved from, I like submitted my info and now basically United matched and American matched it. So United and American matched my status on Delta. Just like that, a couple days? a couple of days just like to show them proof so it was like so so um anyway my point is i flew my first united um not my first united flight but my first united flight on start with starlink yeah like last week yeah it is crazy no it is like mind-blowing i mean i'm i know i'm like very late to the late um late to the game i know a lot of people have already seen it but it is like remarkably fast yeah it's it's amazing you know what i always like i i work on almost every plane even if it's like vacation i'm just like let me what else am i gonna do on a plane yeah good um yeah um i'll walk up and down the aisles and 95 people are not working most people are just like watching a movie it'll be like the middle of a work day yeah yeah and i'm like i gotta yeah not that many people do it but i do think like so i think there's a certain subject of people who will be like man i gotta like i'm on a business trip i gotta finish work let's get a starlink enabled United Flight.

37:09But I do think if people can start like streaming or like, you know, video FaceTiming or streaming something from the planes, a more recreational consumer application, then those folks will kind of see the beauty of Starlink in a nonproductive way. Just like, hey, we want to connect and be able to like text with our friends. Yeah, yeah. So, I mean, this flight in particular didn't have Starlink, but, I mean, obviously through their partnership, they had this like kind of 30, 30, 40 minute documentary on Starship. But also I saw a couple other people watching it, like as I was walking down the aisle.

37:49And so, I don't know, it's kind of just cool that it's just becoming so much more of a mainstream topic area and, I don't know, just general. So there was also a news over the weekend that the next, and this was Elon on an interview somewhere, confirming that the next flight of Starship in like, call it a month and a half, is going to be a Starship second stage catch. So, and that is obviously like, if they can nail it, it will immensely accelerate the program. And it's a very hard engineering challenge. It's a very, it's also a very dangerous challenge. So if they don't nail it, like, it's a lookout, everybody.

38:29Like, hopefully that's in the water. But we have a road trip scheduled for in six weeks when we go down to Brownsville and stand underneath the starship coming ahead of us. Yeah, yeah, yeah. Coming to be caught. That'll be quite the seat. Yeah. Okay, we do have our next guest waiting. So Dan Maggie, CEO of Firestorm. Very relevant considering all the drone talk we had earlier in the show. Dan, welcome to the show. Hey, thanks for having me, guys. So we were just talking about a couple interesting pieces of news. We'd love to kind of get your thoughts and feedback on it. You know, obviously there's the gauntlet program that's taking place now moving into Phase 3.

39:07And also AutoWarcom, which was just announced. Maybe give us your couple kind of thoughts on both. Like, how does that kind of fit into your business and what you're doing and sort of the tailwinds we're seeing directly from the Department of War, specifically supporting sort of this next generation of warfare and also drone-specific warfare? I think it's a really good first step in the right direction. I think, you know, we competed in Gauntlet One. We passed every challenge, and then we got a 10 out of 100 on manufacturability because the evaluators told us they didn't believe in 3D printing.

39:49Now, if you look at how many drones, I believe it's now about 80 % of the drones in Ukraine are 3D printed. I think we have to actually look at, do we know best and turn on every aspect of manufacturing if we're going to compete with our adversaries? I think this year we might make a couple hundred thousand drones in the United States. Russia and Ukraine will each make somewhere between 7 to 10 million. And then China is an estimated 30 million drones. So if we're not turning on every aspect of manufacturing and we're thinking about how we're going to sustain these drones once they're into the user's hands, you know, it will kind of all be for naught.

40:32But again, good steps in the right direction. I like how we're centralizing kind of decision making as well and putting some real money behind it. But you need to turn on every aspect of manufacturing in this country to get to where we need to be. I am kind of curious, do you have any thoughts on like who the, so now with this more centralized command, who is the customer going to be? Do you think it's going to be ultimately this command or is it going to be more fragmented? My guess is they're going to buy it because we haven't actually seen a decision be made to embed these folks into other parts of the military.

41:09They'll be basically buying and evaluating and then handing them to the end users. So when we talk to folks in the Army and in the Air Force and in the Navy, they're all kind I wouldn't say stove piping because that's not the right word, but they're all kind of building their own kind of ecosystems for what the drones they need for the missions they need to take, to go take and carry out. So I think that it kind of remains to be seen here, Mo. You brought up Ukraine 3D printing drones, and I wanted to surface this tweet that came out last week from Paul Graham that got a lot of conversation started last week on the Internet.

41:50And he said, tweeted, talked to someone recently who knows a lot about defense tech, and he made an interesting point. The test of most military hardware right now is whether the Ukrainians want it. they have a hot war going against a determined opponent and they know what works. So how does that factor into your kind of roadmap where you're keeping an eye on what the Ukrainians want and what that demand signal is? Yeah, I think we need to cage that a little bit by basically saying the Ukrainians have done a spectacular job of keeping out other countries unless the stuff is given to them because they want to build their own domestic industry.

42:29and I don't know if I would do it a different way if I was in charge, right? Yeah. But now they're using drones as a currency as the U.S. has backed off on funding the war to basically hand this technology to countries that are fighting Iran and saying, now you've got to bankroll us against Russia. It's been really clever and, you know, it's interesting. I talk to a lot of Ukrainian, like, drone owners because it's a small community. We all know each other. And I started hearing this about six months ago. They said, you know, you guys are six months behind now, but like we missed our window to take over the whole world with drones.

43:05They think we're going to catch up. I don't think like anything like look, if stuff's validated on the battlefield, it's validated on the battlefield. Right. But like it's learnable. Do you know what I mean? And so there's a lot of competing factors here because they realize this could be a multi hundred billion dollar a year industry. and so I take some of that stuff with a grain of salt. Yeah, Dan, let's just take a quick step back for the uninitiated. Tell us a little bit about, you know, what you're building and your approach to manufacturing because it is quite unique. Yeah, so my background is I was one of the early defense tech guys in 2015, 2016, started a counter UAS company called Citadel.

43:48We were bought by Blue Halo at the end of 21, then merged with Aerolvironment. The product lives on as the Titan. And it's an RF based jamming system. And in my self-imposed retirement for about six weeks, when I was thinking about the war in Ukraine, when it was about to start, I was like, you know, it would be really interesting if the Ukrainians did to the Russians what ISIS did to the coalition forces in Iraq, which was put a lot of drones in the air. So that was kind of the impetus to starting the business. And the whole idea was let's think about manufacturing and drones differently from the ground up.

44:22Don't make one drone for one mission. Don't do exquisite manufacturing. Treat these things as expendable systems. So that's where we started. And then what we learned when we kind of put an industrial 3D printer into a shipping container and handed it to a user is we were only itching, like we were only scratching half of the itch of what the customer wanted. Now almost half of our prints are broken parts on other people's drones, repair parts, because the supply chain is so bad. And we're now expanding an entire line of expeditionary and regionally-based manufacturing to go along with our five drone platforms.

45:03We think resilient manufacturing is totally overlooked in this space, meaning you have to design a self-healing network. Because if we've learned anything from the wars in Ukraine and now with Iran, like day one of the battle, the enemy will now go to your means of production. and if you have a big factory, they will blow it up. Full stop, right? And so you have to be resilient. You have to be able to set up a factory quick or with our expeditionary stuff like Excel, move it around the battlefield and build stuff as you go. Yeah, so can you talk a little more about this Excel containerized manufacturing, 3D manufacturing platform?

45:42It seems like a very unique thing that you guys are building. I assume the investors, your investors are very excited about that potential. Can you just describe what that is, when that's used, how it works and where it's worked, where it works? Sure. So let's take a step back and talk about a phrase we hear all the time now called contested logistics, meaning like we don't have superiority on air, water or land when it comes to moving stuff to and from the battlefield. And our thesis really is that every war is an away game. so we we thought from day one how do we when we started getting traction with our platforms build this closer to the point of need right and you guys can google like just how many 3d printers are across like the front lines like actually at the front in ukraine it's amazing um but we thought like we got to do that kind of more for like a non-asymmetrical but like easier to use system So we partnered with HP.

46:41We're the exclusive mobile provider of their industrial 3D printers. Not the ones you kind of see that sit on a desktop and kind of run around like a hot glue gun. These things are about the size of a motorcycle. And we figured out basically how to run these things in really hot, humid, cold environments with this kind of expandable 20-foot shipping container. So you basically load in a CAD, right? Or you design your own part. You hit print. and like I could literally train you two in less than two hours how to run the system to about an 80 percent competency and then when the parts come out you basically can like assemble things at the point of need and our whole idea is like you got to be able to tie in local supply chains because that's where we think the future of conflict actually is going to go right so mass produce it here but be able to modify it fix it build it uh if you can't get a reach back and say get apart from like Arizona or Texas.

47:36Right. So, Dan, is it fair to say that your system isn't about mass producing on site? It's about the repair, like repairing, fixing, adjusting the drones that are already on the battlefield. I will say like the demand we've gotten to now go do mass production regionally is basically having us the next evolution of the company will be we build mass production in the US. We have the expeditionary technology that you can deploy when you don't have that ability to reach back and get supply. But we're actually now being asked, like, could you build movable factories, not just a shipping container, but like you have a 40 ,000 square foot warehouse.

48:20How do we set up a factory in a week and start mass producing stuff? So that's kind of the evolution of the business. And that's us listening to customers and having them across the Pacific and in the Middle East say, guys, like we are way behind in being able to do resupply or build stuff. So it's a really cool evolution that we're kind of going through here as a business. And so we'll have a line of excels that'll be able to do multiple different things, drones, repair parts, maybe even munitions. And then regionally based manufacturing to help support that and then repair parts. Yeah. Who's buying today from you guys?

49:00Our biggest customer right now is the U.S. Air Force. We also have contracts with the Army, the Navy. And then we won a StratFi and an AppFit, which are these two vehicles that were designed by the Department of War to help companies like us cross the valley of death. and so it's been really interesting as we help build like these systems into operational plans because what happens is you get to actually see how the sausage is made in the department of war you might have people in korea or japan or in the philippines that are waiting six months for drone drones or repair parts and now you can like bring something to an austere location set it up in four hours and you're helping them solve problems in real time.

49:45And that creates a really good feedback loop back to the Pentagon to say like, hey, this is allowing us to actually, you know, not only like prevent a war, but like keep our legacy systems running that we've invested so much money into. Yeah. Yeah. There was just this announcement from the Department of War of Fortress America. And And this was something that Elon and Palmer Luckey were brought into. But one of the pillars was energy independence at bases, securing that so that we don't have to lug in oil or whatever it might be. And it would seem like the natural progression of that is expanding what sovereignty or independence at a base would look like.

50:30We had Dan Wright from Armada, who I'm sure you're familiar with, that is looking for these or bringing in these containerized data centers into the edge or the battlefield. And it does seem like a natural next step to do what you guys are doing, which is bringing some kind of edge manufacturing to the region as well. yeah jack we we totally agree with the thesis like being able to like power the bases at the point of need is the first step um but what has shocked me right and what has really driven the vision of our business over the last couple years is learning just how bad the supply chain is right and how a lot of people are now looking what has happened with the war in iran where we can't resupply our bases over there and they look to the pacific and they say heaven forbid there's a conflict in Taiwan, the tens of thousands of forces we have across the Pacific, if we can't keep them running like beyond a week or two weeks, like which is kind of what what, you know, the CSIS is saying, like we're in serious trouble to be able to kind of defend Pax Americana, which is the underpinning of the whole global economy.

51:47Right. Yeah. So Dan, back in the spring, you raised over$80 million. That was led by Washington Harbor, In-Q-Tel, a whole other list of great investors. I think that gets your total capital raised to over$150 million, if I'm not mistaken. How are you thinking about sort of that Series B capital deployment, and do you have a fundraise coming up? You know, you're always fundraising in the space, especially when it's really, really hot. You know, I think we're going to do really good revenue numbers this year. And so we have a very clear path to what some products that if we invest more in over the next, let's call it 12 months, don't take us to being like a two, three, four, five billion dollar company, but a 10 to a 20 billion dollar company, all being pushed with like what the realities of war now are, given the conflicts in Iran and in Ukraine.

52:45So the money that we raise basically gets a lot of our excels into the field and then funds a couple additional products that like you know we're soft launching here over the next couple months uh but the next evolution of our fundraise is to build out the rest of our excel line given what we're hearing from customers that they need and want um but then also really invest into this regionally based manufacturing, right? What I like to say is my wife has to tell me like six times to do something. So when I have six or seven different groups of U.S. forces around the world all telling me they have the same exact problem, right?

53:26That's what you got to go build to solve. Yeah. Yeah. So you mentioned the XL would be, maybe you'd move past drones, maybe it'd be munitions, or maybe it would the other kind of assets in the field, how broad can this go? Can you just be a more generic 3D manufacturing at a base? Can it go into supplies for troops or a new table or something? How broad are you thinking about this when you're talking to investors on that 10, 15-year plan? So, Jack, I'll give you an example of how broad we think this can go. And again, this is like one of those instances where if you give the end user something, they'll kind of show you the pathway.

54:13We recently completed a Excel on the USS Essex, which is a WASP carrier. It basically carries helicopters from San Diego to Hawaii for the RIMPAC exercise. Okay. We printed for 12 days straight while underway. we printed over 1200 unique parts separate from the drones we made that we trained marines and sailors to like you know build and assemble and fly and what we did is we basically put a qr code on our excel and they'd come by and scan it and just be like hey can you make this for me because what we've learned is like it's not these big parts that break things it's really little things that like break.

54:59And so one of the things I learned doing this is that the Navy actually barters parts in between boats while underway. So they put four people on a helicopter and they go boat to boat to boat to trade parts as things break. And if we can solve a little bit of that problem, we estimated we saved the Navy about half a million dollars in a two week deployment. um that's a massive win yeah and i'll tell you when the boat got into port uh we had four weeks of backlogged parts that they still wanted us to make which was amazing yeah that's the one other thing that yeah yeah i would take advantage of that if i was a sailor i would be like print me a a basketball hoop let me get some more like uh cereal hopefully there's some like uh you know You know, it's funny.

55:51There's this non-conductive wrench. It's like a wrench that we 3D print. We've made like thousands of these things, which I would never have thought, but no one wants to get electrocuted when they use a wrench on something, right? Yeah. And so that's been one of the things that people always love. It's been other things too, like parts of vehicles, parts to unmanned and manned aircraft. and then we have this huge demand signal coming out of the army where they're waiting four to five months for repair parts for drones and we can solve that like immediately because like the number one thing about the military is if you can't train, you don't know how to do the stuff.

56:31And so if your stuff's breaking in the field, you can't use it, you can't train. So again, being responsive. Dan, last question. We've heard a lot about this. Like, I mean, you mentioned it earlier, the data points around how far behind we are on manufacturing versus China on drone capability. I am just kind of generally curious, like, what do you think it's going to take at the national level for us to be able to catch up and ultimately beat our adversaries in drone production? And, I mean, the whole manufacturing problem is a bigger problem, so we don't need to talk about the whole manufacturing ecosystem, but just, like, specifically drones, like, what do you think is it going to take?

57:12How much of it is a technical issue? How much of it is scaling up manufacturing? How much of it is policy and things that the government needs to do differently? Curious your take. As the great decoupling from southern China, which is a factor for the whole world, occurs, I think there's a couple areas we need to invest in. One, we need to continue to subsidize really critical industries. And unless you have your head in the sand, drones are going to be a big part of this. So we think that nearshoring in general is going to be really important, right? One of the things we've seen here, not just in the United States, but we should be taking advantage of the incredible talent they have in Mexico, right?

57:52It's unbelievable how skilled, like we all went to college, they all went to trade school, and it makes a huge difference. The second thing is that we really have to solve the electrical engineer and firmware engineer problem that we have in the United States. I cannot stress this enough. We're losing really good people who are just basically moving to Canada that the whole industry, it doesn't matter if you're making drones or field robots or critical minerals, we need electrical engineers. And we don't make a lot of them that are U.S. citizens. So we have to solve that. That's becoming a bottleneck.

58:27And then finally, we're going to have to subsidize the shit out of this thing. Pardon my language. You can't just snap your fingers and in two years you get there. Drone dominance and moving all this money into the drone czar's coffers are really important to help kind of prime the pump. But we should be thinking like China, which is in 10, 20, or 30-year iterations. That's how we do it. Well said. Dan, thanks so much for being with us. Excited to have you at the Investor Summit in a few weeks where I know you're going to be giving a lot of spicy takes. Yeah. Hey, thanks for having me, guys. I look forward to seeing you in a couple weeks.

59:04All right. See you soon. Bye. It's the advantage of off the record. Printing basketball hoops. That's what you would print. What about the basketball? What are you going to do then? It's like that meme of the husband and wife in bed. And it's like the wife is like, she's always thinking about it. I'm always thinking about basketball. It comes to my mind first. Basketball hoop printed. It's basketball season. It's basketball season, yeah. So, okay, we do have our final guest of the show ready to bring on. So Matt Terman, CEO of Bedrock Ocean, formerly at Satellogic. So going from all the way up in space, all the way down to the floor bed of the ocean.

59:51Matt, what a... From seabed to space. Seabed? That's clean. That's faster. Clearly, you've said this before. What, yeah, tell us a little bit about that transition going from helping run Satellogic to now running Bedrock Ocean. And yeah, tell us a little bit about what you're doing now. Yeah, yeah. So good to see you guys. Thanks for having me on. Maybe just a little bit of background on Bedrock and then I'll get into how I got into the position. So for those who don't know, Bedrock, we're an ocean intelligence company founded in 2019. Our founder came from SpaceX, been building unmanned submersibles for 20 plus years.

1:00:30And his goal was to create a new category of ubiquitous sensing in the undersea environment. It is the most unobserved place in the entire universe. And obviously coming from satellite logic, where we had complete observability over the Earth's landmass, you take that for granted. Coming into this role now, the ability to see and understand below the surface is just a difficult problem. So when the opportunity was brought to me, it was a no-brainer. And I look at where we're at right now in the space. It's where Earth observation, where kind of space 2.0 was back in 2015. You had a lot of commercial capabilities coming online, but the customers, they were just slowly starting to understand the needs and requirements and how they fit this into their con-op and their mission packages.

1:01:28For space, that was Afghanistan withdrawal in 2021, and it was the invasion of Ukraine where the utility of commercial capabilities for Earth observation kicked off. But here today for the undersea space, the entire world, when looking at Hormuz, looking at Russian gray zone activities in the Baltic, today there was an accursion in the Black Sea. The entire world is now focused on this collision between energy security and global geopolitics kind of colliding together. And it's where we fit in in kind of a perfect way. So can you, what does the underwater robot autonomous vehicle look like? What is it doing?

1:02:09What are some of the use cases? Who are some of your customers for this technology? Yeah, so Bedrock Uniquely, we started out building the autonomy first, right? We built the autonomy stack and the software first. We went out to market. We looked at other AUVs, other UUVs available, played with a few. Nothing really quite fit the needs of the company because we wanted to create something truly adaptable and truly modular because we have customers that come to us with different fishing packages, right? Be it mine countermeasure, or we have customers in the North Sea that say, look, we have thousands of wells that we need decommissioned over the next 10 years.

1:02:47That's a different sensor package. So we created Siren, which is our geophysical surveying platform where you can plug in a camera, you can plug in a sub-bottom profile or a magnetometer if you're looking to find ferrous materials in the bottom of the sea. So that was really key, right? And that's why we do all of our manufacturing out of Richmond, California. It's why we're vertically integrated. Most of the components are sell that which we go to other sensor providers for. It's built into our modular platform. So you can think about our customer sets in two different ways, right? We're dual use.

1:03:21We have customers in the Gulf of Mexico, in the North Sea, off of West Africa, that they're looking for to monitor their critical infrastructure. They're looking to look at what's underneath the bottom of the ocean, if they're going to put a pylon in there for a rig or for an officer. On defense side, they're looking for persistent monitoring. They're looking to understand change detection, what's there that wasn't there a week. And we've got a lot of success, not only U.S., but we're seeing a huge draw now from our European allies. And it's why we established the U.K. subsidiary. It's why we're in Aberdeen, serving that as our base for UK and European operations, because the demand from commercial and defense in that subsea environment is just so great.

1:04:09Can you give us a sense of like, what is this market like? Meaning like sort of the market of companies providing the service. Like how much of what Bedrock is doing or what about what Bedrock is doing is novel? Is it the tech side? Is it the way you're looking at the market, the go-to market? Yeah, it's a little bit of both, right? On the commercial side, you can think of large legacy players that you have a large ship running on diesel that's taking off from the port in Europe. It's going out and surveying oil wells for, call it three weeks, charging$100 ,000 today, got a lot of people on board.

1:04:50And it takes ages to actually get the data from the subsea back to the user. And ages, I mean weeks and months. Where the benefit that we can bring, we can fly and deploy off of any vessel of opportunity, drop our AUVs in, our team from back in the States or sitting anywhere can remotely plan a mission and off the AUVs go to map and monitor. Critically, the customers want, they want that data as soon as possible, right? It goes back to the days of Earth observation and reduce the latency in that time to action from space down to the analyst. It's the same thing in subsidy. The comms are much more difficult under the ocean, though, guys.

1:05:29So where our advantages, every time our AUVs make a connection, we're sending insights back to the end user. So they're not waiting for months. So that's really key. And the other thing here, too, we've been at this for six years now. We've been building our supply chain. We've been building the technology. We're not new to this game. On the defense side, we're seeing assets move to Taiwan. We're seeing assets move to Hormuz. The Europeans are in a real interesting bind because they have no mine countermeasure, commercial mine countermeasure opportunity to help go and monitor their subsea environment.

1:06:08And this is where we're filling that critical void. Can you give us an update on the Strait of Hormuz? What is the traffic like now? Sometimes I hear that traffic is up and oil tankers are moving through. Sometimes it's not. What is the latest? Are there mines in the Strait of Hormuz? That's something that comes up a lot. How is that looking right now? Back in August, the underwater drones found like 100 plus mines. Oh, did they? Interesting. Yeah, look, I am not sitting in Abu Dhabi or watching the Strait from Oman, so I'm going to give you just my own opinion and what I'm hearing. Look, I think there are, and NOR will confirm if we're working out there or not, but look, there's active operations underway.

1:06:52to go and make sure that this trade is cleared. And I think we want to kind of shift the paradigm from, you know, the U.S. and the coalition, they're doing amazing work out there to do mine, you know, proper mine countermeasure and mine clearance. I think we need to think about... By the way, I didn't even realize there were underwater mines. Oh, really? I mean, obviously it makes sense. It obviously makes sense, but I just never... Like before the conflict? Yes. Yeah, I mean, I never thought of it. Yeah, absolutely. But that's why it's absolutely critical. This is a risk and it's an insurance imperative more than anything, right?

1:07:30So if you think about even before the conflict, if we had observability of the Strait of Hormuz, if we had observability in the Strait of Malacca or from Gibraltar down into the Mediterranean, we don't have any observability right now. So to be able to say, is it clear? Well, who knows? If you're blind and you're not looking and running persistent monitoring in these areas, like we were doing persistent monitoring from space, you're not going to be able to understand what's in that environment. So what is the situation there? I have no idea. And frankly, Jack and Mo, neither does anyone else. And that is the scariest damn thing and why companies like Bedrock are just so relevant today.

1:08:08Yeah. By the way, quick side note, did you ever hear about the story of like the Wall Street analysts that were sent to the Strait of Hormuz to do? Did you hear about this? It was like, isn't that wild? The name was like Analyst One, Analyst Two or something. Yeah. I guess there are some people who are, you know, taking advanced measures to figure out what's going on over there. I mean, we sent a reporter to Ukraine recently. Yes, we did. We will talk about that. We will talk about that in a little bit. But that's critical, though. And I think it goes back to, like, you need different modalities, the human observability modality, to understand what's going on in some of these, right?

1:08:49And this is why we're so stone-piped, from space-based ISR to USBs to, you know, AU under the water. Like, nothing is really strung together. So you kind of need that analyst sitting out in Oman, like, looking at the ships passing through. Yeah. So, OK, so you recently raised around, And I'm curious, like, what is the sort of the fundraise plans? What is sort of the what is the general capital plans for the business? And like, what are the milestones that are coming up over the next year that will help you guys start to, you know, warrant, you know, larger, larger fundraisers? Yeah, look, I mean, it's about it's about go to market momentum right now.

1:09:29And that's what we're that's what we're focused on, like the demand that we have, you know, coming from oil and gas customers in the Gulf of Mexico, you know, all the way to the North Sea, it's pretty, pretty insatiable right now. So our go to market momentum, fantastic. On the defense side, you know, again, there is a need to observe what's going on underneath the, you know, our, our UK and European allies, you know, they are, they are far divorced from how we view the subsea here in the US. They are living a true gray zone war right now. Russia is in current, you know, is making encouragement into their territory on a daily basis.

1:10:03So that That poll that we're seeing is really driving our momentum toward, which is great. And that's going to drive our capital plan to end in 2027. And I'm sure once we have something to report on, you guys will be the first or second to know. First. First. All right. First. The subsea cables have become critical infrastructure in many ways, particularly with AI pushing through a lot more data. and the subsea cables in particular, but also the broader genre of like AI data centers becoming targets for a Russian attack or Ukrainian attack or an Iranian attack. And those are the subsea cables, I believe, are all privately owned by the Googles and Metas of the world.

1:10:53But how can, How are you seeing that change with subsea cables being critical infrastructure? And how can Bedrock potentially, I guess, either monitor or see if there's a repair? How would you guys play into the inspection and monitoring of those cables? Yeah, you're spot on. I mean, when the Houthis cut the cables in the Bab al-Mandab going from Yemen and Saudi to the continent of Africa, I mean, that caused outages for days, if not weeks. It's an interesting intersection. Yes, the Googles, the Metas, large enterprises own a lot of the cables, but there's an intersection between, as I said before, between security and enterprise imperative, right?

1:11:44And the same applies to the subsea cable space as it does to the energy. So who owns that responsibility? It really just depends. We're getting a lot of pull right now from customers in Asia where they have a far more, a deeper relationship with those cables given their security imperative. You can think about where I'm talking about in Asia right now, Southeast Asia, Philippines. Philippines, it is absolutely a state-sponsored effort, along with enterprise coming together to do the monitoring. And it's the same as doing mine clearance, right? You want that persistent monitoring. You're not going to know if something was planted or if a table has been interfered with if you're not constantly monitoring.

1:12:31And the real critical key is monitoring it when it comes up into the continental shelf onto shore. That's the key. And so we're getting a lot of pull right now from customers to conduct this type of monitoring across the globe. And you're right. In Europe, the Russian Dugi, if you haven't heard, look up the Russian GUTI. They are Russia's special operators that work underwater. They are actively interfering across the Baltics and across Europe right now. It's a very real and live. Yeah. Matt, I want to talk a little bit about the technical side of operating subsea. You were previously doing satellites in space, which is obviously another very difficult environment to have technology working appropriately and efficiently.

1:13:26How does that compare now to building tech that's subsea? And more challenging, as challenging. Talk a little bit. And then what are the types of innovation you think we're going to see over the subsequent years in kind of this type of underwater technology? You know, I didn't think there was anything harder or more emotional than building a piece of hardware to send into space. But I'll tell you, welcome to the subsea environment. You know, it is corrosive. It is a brutal environment. And it is, you know, comms denied. So it is, with all due respect to my former colleagues across the space industry, you know, subsides a hell of a lot harder.

1:14:08And you get to get your technology back, which makes it even more emotional, right? Because you can see the beating that it's taken on the AUV. So it's harder, right? And so that means, like, especially in defense scenarios and defense concept of operation, being able to interoperate, right? And we've been through a number of exercises, one of them including lantern fish with the DOW. But we had to interoperate with USBs on the surface and then be able to push our data through TAC into Maven's smart system. So like that ability to be able to be interoperable and open from a software and economy standpoint is just critical from the outset here in the subsea environment.

1:14:47The innovations that we're going to see are going to be fantastic. So Bedrock, we're not about building the AUV. We're about building the entire ocean infrastructure, which includes at-sea recharge and the entire infrastructure to enable these vehicles to be out for a long endurance in a persistent way. The motherships could be able to carry the AUV to areas of interest, drop them, come back for recharge. This is all on our roadmap and stuff that we've been building for over the next 12, 24 months. And I'd be real excited to show everyone and kind of what we're up to here in the near future. You mentioned before you have near real-time comms with your undersea vehicle.

1:15:28Is that through just like an intense RF signal, or how does that even work undersea? Yeah, so using USBL or AECOM, we only have a signal direct to our vehicles. When the vehicle surfaces, we have an iridium backhaul. We're connected through Starlink. So that seabed to space is always there and present. When the AU is able to surface, that's where we're able to send back those immediate insights through our onboarding. Yeah, yeah, yeah. OK, that makes sense. Yeah. The key, though, while it's collecting, while the engines are collecting through various different modalities for the sensors, it's edge processing, right?

1:16:14So everything is being processed. So once it hits the surface, it's sending back the analytic or it's sending back the image. Got it. What is the future of undersea security look like? Like, how do you think about sort of, how do you think about that future? Yeah, look, I think you don't have to, you know, you don't have to, you know, dream terribly big. You can see just through government procurement and what's being put out right now, where it's going, right? You see China put out these XXL UUVs that are launching from large motherships off the coast of China right now that sit and dwell on the bottom of the ocean, 6 ,000 meters.

1:16:53So what is it going to look like? I think you're going to see integrated autonomous hybrid fleets integrate into traditional Navy platforms. And this is how the US, how the UK and other European allies are thinking about it. In 2040, are we going to have an entirely autonomous fleet of surface and subsea vehicles? I don't think so. I think they're going to play an integral role in providing observability or kinetic effects. But you're not going to see a replacement of traditional Navy platforms. I would hope that the budget, especially in the US, we've seen great top line progress and PR and hype.

1:17:34that has not trickled down to actually a change in the force posture, especially on the autonomy side and the subsidy. Will it come? 100%. I think it will come. But my fear is that it's going to take a paradigm shift for budget to really fall rather than understanding the imperative now. Matt, you were most recently a part of, as we talked about, a big public company. Now you're back in the private world, do you like it better? A really good question. There's something naked and transparent about working for a public company that's great. It's all out there. Obviously, you have to be more careful in not running afoul of MMPI.

1:18:20But that means that we're a small company of 52, 53 people. It's a lot of fun kind of getting the hands really dirty again. And we have a phenomenal group of investors and a great board that's incredibly collaborative. So I like this. We'll see where Bedrock goes and what path we take. And a public market could be in the future at some point. But for now, I'm really just enjoying being back in startup land in an incredibly dynamic environment. Awesome, Matt. Well, thanks so much for being with us. Thanks, guys. We'll see you down in L.A. in a couple weeks. We'll see you in a few weeks. All right.

1:18:55All right. Cheers, guys. Thank you. Bye-bye. So in your point, your Erin point, so we did send, so Erin is, Erin O 'Brien is our managing editor of Tectonic, our defense publication. She went down to Ukraine a couple weeks ago and did a whole tour and came back with some really exciting news stories and also photographs, which we'll show you guys in a couple weeks. So she's going to join us on our next show and we're going to go through everything. I mean, she has a lot of insights into like what is going on in Ukraine and and the state there. And, you know, for us, it felt it was really important for us to actually be on the ground to actually see what's happening, just as obviously journalists.

1:19:40But, yeah, we will. We're going to have her on our next show to talk about all this. That's going to be that's going to be great to see it. It was a it was a I don't know. I think she hit like 10 or 12 or 15 like facilities. and she got a real good sense of the manufacturing base, defense tech manufacturing base in Ukraine. SpaceX stock is up. Today? Just in general. Yeah. Quite a bit. Let's see where it's trading right now. They've had a whole, yeah, it's up. Yeah, I mean, honestly, like, it's had a good run now, trading over$2 trillion. dollars but you know especially now with the spectrum news a lot of the mobile providers are gonna yeah that was it so that was I think like SpaceX was up maybe like 1 % off that news but all the other MNOs were down like 10 % yeah which is interesting and I wonder what like the market cap workout works out too but It is something about the mobile market in the U.S.

1:20:51It is, in some ways, it's zero sum, where there's like a finite amount of people, and there's kind of a finite amount of revenue. It's a huge amount of revenue. And these M &O's, the AT &T's of the world and Verizon's of the world, cash flow like crazy. It's a phenomenal business.

1:21:08But you can start like cannibalizing. So it was an interesting, like, you know, the M &O stock tanked and SpaceX was kind of flat. So it was like, hey, this is going to be not great for everybody. It kind of pushes that. I mean, it's great for the consumer, honestly, but it pushes down prices. And it's going to be interesting to see another fourth carrier into the market. Do you have any long-term M &O predictions? What do you think is going to happen? The building, so SpaceX is very open about this. like SpaceX obviously the economics of satellites and direct to cell are phenomenal much better than like building out tower terrestrial infrastructure but in order for SpaceX to compete as a real MNO they are going to have to build and they have said this very publicly they're going to have to build their own terrestrial network that means that can be you know these little cells off of Starlink terminals but that is also going from tower to tower to tower and really building out a network, which sucks, which is not fun.

1:22:11There's always the question of, like, do you want to spend years doing that and then, like, fight tooth and nail for these premium customers that is already being, like, the switching churn rate is, like, or switching rate is, like, 1 % or something? Or do you want to just, like, buy a M &O and not deal with that and then just be able to cut costs even further and allow that to cash flow. I actually have an article about this coming out with Payload Pro. If anybody wants to sign up, it's coming out tomorrow on this spectrum acquisition, what it could mean. Yeah, and I do have to announce one very big piece of news that we'll talk about on a future show is that Amazon Leo did come out and say that they are launching, they're still tracking a 2026 service launch, but importantly, they are going to be offering Leo as part of their Prime bundle, which we've talked about before in Pro.

1:23:16Interesting, I didn't catch that. So this was basically yesterday. Leo is planning to be part of the Prime subscription bundle. Cool. So, I mean, again, this is not like, I mean, we did, you know, we published a piece on this, like, I don't know, six, seven, eight months ago. Yeah. About how and why and what we think it's ultimately going to look like and why ultimately this is going to be a huge advantage for Amazon. And, you know, I think our broader piece of it is, like, at the end of the day, Internet is a commodity. I would bet most people don't know off the top of their head where their Internet comes from.

1:23:50and ultimately, like, you know, if Leo is able to match the Starlink capability capacity, then, you know, and even maybe it's not as good, even if it's like 10%, 20 % worse, you could argue that the power of the Prime bundle is going to be a huge advantage. So is that implying that the internet would essentially be free? It's a good question. Or would it be an add-on to the Prime? Because that would be a pretty phenomenal deal for consumers if it's, if they're just like, hey also take free internet that's 70 bucks a month i think look we'll have to talk more about this and i think we can do a whole show just on this topic because it's such a huge topic i will say that my thought process around this is like um i don't know if the prime uh i don't know if leo will be a free part of prime subscription at least not in the beginning i think it will be a heavily subsidized edition um and i think yeah so i mean because ultimately if you look at the subscript prime model and how it works.

1:24:50And again, we can go into this at a future date, but like Amazon has a really good job pricing everything in a way where they, they, it's, they know that not everyone is going to be using every single product at the same exact time. So there is the, they bundle in a very smart way and they ultimately, you know, they're charging consumers what, I don't even know what it is these days, like less than a couple hundred bucks a year to the prime subscriber. But if you actually look and add up the value of all the products you're getting, if you were to individually buy it, it's like over a thousand dollars in value.

1:25:22Right. So, um, no question that this is going to be part of the subscription model. It may one day be effectively free. It might look free because, yeah, because like there's so much value in Amazon just creating, just adding to that ecosystem. So anyway, more to be seen, but I think that'll be, that'll be interesting. Very interesting. Um, okay, well that's our show. Um, and, uh, We'll be back in two weeks on the 26th to talk more. I mean, at that point, our summit, investor summit, will be a week away. So I'm sure we'll talk a lot about what's going on there. And, yeah, we'll have Aaron on the show.

1:25:55So super excited to have another team member here and talking about Ukraine and all the things we're seeing in Defense Land. So with that, we will see you guys in a couple weeks. Thanks for tuning in.

1:26:39We'll see you next time.