Time for a riddle: what swims below the ocean surface, can carry explosive payloads, and has just raised a big ol’ funding round? As it turns out—Vatn Systems.
This morning, the Rhode Island–based autonomous underwater vehicle (AUV) startup announced that it closed a $60M Series A led by BVVC, with participation from investors including Hanwha, Airbus Ventures, Dauntless Ventures, Decisive Point Ventures, and Lockheed Martin Ventures, back in October.
Vatn CEO Nelson Mills told Tectonic that his company will use the new pile of cash to “productize” their AUVs (essentially autonomous torpedoes), increase production capacity, and move into a new facility (yes, another one, if you’re paying attention).
Maritime autonomy really is all the rage, huh?
Right on target: Vatn is one of those companies that’s stayed laser-focused on building one flavor of product—and garnered a lot of attention as a result.
The startup—founded by Nelson and his brother Freddie in 2023—makes a few different underwater vehicles, but on the defense side, they’ve got:
- The Skelmir S6, a 6-inch diameter AUV that can carry a 10-20lb payload and has a range of 20 nautical miles at up to 20 knots (23 mph).
- The Skelmir S12, a 12-inch diameter AUV that can carry a 250lb payload and has a range of over 200 nautical miles at up to 30 knots (34.5 mph).
Recently, Vatn has been on quite a run. The company:
- Raised a $13M seed round from investors including DYNE Ventures, RTX Ventures, Lockheed Martin Ventures, and In-Q-Tel last year.
- Teamed up with Palantir to scale manufacturing in April.
- Opened a new facility in Rhode Island in May.
- Launched a bespoke navigation system called INStinct in October
Mills said that this new cash will help him and his team scale production of the S12, in particular—he says that the new facility will be able to produce up to 2000 of the bigger AUV per year, plus 2000 of the smaller S6.
“I think the place where all these new defense tech startups, like ourselves, are going to live or die is production capacity and ability to scale with it,” he said. “We’re making a really conscious effort to prepare way ahead of time.”
BFFs: Plus, having a whole bunch of mega-powerful primes on your cap table doesn’t hurt in terms of scaling.
“There are a lot of advantages to partnering with primes,” Mills said. “As much as folks like to criticize primes, they still bring strong systems engineering organization, manufacturing organization, and deep connections to the government.”
By working with companies like RTX, Lockheed, SAIC, and Hanwha, he said, Vatn gains access to “experience and connections…[that] can help [them rapidly increase market share.” Plus, Hanwha is a nifty way to access that ever-so-important maritime market—the Indo-Pacific.
“We’ll announce some stuff over the next year [with] these partnerships, but [it’ll be] everything from collaboration on new product development to payloads that they have developed, to potential integration of some of our technology onto some of their systems,” Mills said.
Who said you couldn’t partner your way to the top?