The Exchanges

Q What was this process like versus previous processes?

A It was actually incredible. So, you know, our, our series seed in series A went very fast. A series B was a, uh, the hardest round we've ever done, which I don't think is uncommon for deep tech companies because to the market, and I'm sure your audience will appreciate this, is any deep tech company is usually like a deep tech B, but a seed round revenue, and it's always in between. Um, this one we're really lucky where When we launched, ah, like the factory to all of our customers in January, we basically 10 X revenue in four quarters last year. Um, the automation was really kicking into gear. You know, no one's ever scaled the manufacturing company this fast. So actually we were done and closed within the round from starting to pitch to term sheets being signed or a deal done within, I think three weeks.

AI assessment note: “our, our series seed in series A went very fast. A series B was”

Q Specifically with this round, what was the construction of it? Was it existing investors? Was it strategic? Was it debt? Was it equity?

A So we had about. 60% of the capital was new investors. 40% of it was inside investors. Andy Grayson from Construct stepped up with a huge check and has joined the board. And obviously Catherine from Andreessen, Diane from Founders Fund, Brandon and Josh from Lux. All stepped up as well. Put about 60% new capital and 40% insiders. Um, and then an entirely new debt stack as well, which is great for us because we're a capex-heavy business. So we like to spend debt instead of venture dollars on factory equipment. And then what happened was, uh, we were talking to multiple of our customers about strengthening our partnership. And that, that might potentially lead to an investment. So in December, it became clear that, uh, RTX ventures, which is the venture on Raytheon also wanted to invest. So we ended up, uh, extending the round out to give them the opportunity to invest in the same, round. And then what I can share is that more likely than not, there will be more announcements of that sort of a theme in the next couple of months. Yes, we're very lucky. Incredibly, from a fundraising perspective, and I know your audience is like a lot of people in startups, we're very lucky that it was an up round, clean terms, and we had both new investors, existing investors, and customers, or potential customers, um, who invested in the same round, so we're incredibly lucky. Um, and that's how i…

AI assessment note: “60% of the capital was new investors. 40% of it was inside investors.”

Q huge deal. Um, And Hadrian is at, you know, almost the core of it, right? It's like, it's like Andrel, it's Palantir, it's Hadrian. You're, you're one of them. So let's talk about this vibe shift. How are you feeling it internally? Are you feeling it with your customers? Are you feeling it with investors, um, with recruiting? What does it feel like, uh, being the boots on the ground?

A Recruiting is amazing right now. You know, two years ago, we were like, Please take this interview with us. Now it's like, oh, this makes sense. When can I interview with you? Um, both from Hadrian, but also like software engineers or talent in general, understanding that this category has got real momentum and is like valuable. And I think without founders fund Andreessen, like leading that charge from a narrative and capital perspective, the ecosystem just simply wouldn't be here. Um, like the, the level of momentum that Catherine Boyle, Trey Stevens have created narrative wise, capital wise is like insane. Like, you know, within two years, they've kind of taken something from like, don't know if I want to go work at Palantirand rule because like, uh, America bad to like the whole country is like, cool. We're building hard things for the national mission. Is, is insane. And like, it gives me a lot of hope for like, am I going to be better at this? Right? So we fill it on the ground with recruiting. We fill it on the ground from customers who are like, yeah, huge problem. We're going to take a bet on you way earlier. I'm going to help. And investors, I would say like, there are true believers who are doing it for the national mission, who have been investing in this category for five to 10 years. And there's this new wave coming into the ecosystem, which, um, some of them are …

AI assessment note: “So we fill it on the ground with recruiting. We fill it on the ground from customers”

Q request, um, based on a simple belief, I will quote, America needs better physical technology and startups are the best way to build it and scale it. You had a pretty, uh, I'd say collaborative response to that rather than seeing it as competition. You're like, no, we need more of these. So can you explain more about your position on that and how you would help engage this environment?

A Yeah, so I think that you've got to remember that there are kind of four big categories, right? There's these huge industrial companies, you know, like a Raytheon, like a GE, who need to upgrade themselves very rapidly. There are new industrial companies like Hadrian who are starting from a clean sheet. Um, there are 30,000 small manufacturing businesses in the US that are super important, even in things like making steel that have been completely unsupported by technology, including AI for decades. Um, and then there's obviously the new prime. So my view is like, you know, one, there's plenty of software products out there to go build for all these companies. Secondly, there are many micro categories of manufacturing, you know, just like open AI and AI won't do everything. They will do the vast majority, but you've, for this level of mission, you kind of need everything. I think it's great. I mean, the number one thing that we did that was important was have software engineers get excited about automating manufacturing again, versus getting stuck at Google, you know, optimizing ad clicks or trading cat pictures on the internet. So I think YC stepping into this just for the fact of getting like Stanford and Harvard kids and, you know, kids from the Midwest back involved in building software for the real world is really culturally important for the country. The second thing is, …

AI assessment note: “I think for the country, we need like orders of magnitude more than this.”

Q documentary. And I've even been fortunate enough to take a tour of your automated factory. Um, but for those who don't have the pleasure or haven't had the opportunity to see those documentaries, what are the main components that make Hadrian? The software, the machines, are there any new shiny toys that you're excited to add? Um, what are the core components there, and how have you been building that?

A There were two big things about Hadrian. One is the best software and robotics team that's ever existed in LA, period. The second thing is talent and workforce development and training. Because a big part of what we do is good software does two things. One is it takes a 20 hour task down to two hours, but it also makes doing that two hours way simpler. You know, and I think Rippling's a good example of this. It's like, sure, you need less finance people, like ramp, you need less finance people, but also like the people doing that job don't have to be like a CFO, because they're kind of getting guided through the decisions. It's error proof, you know. Um, and we are never going to be like fully, fully automated. Cause like Tesla tried to do this. SpaceX tried to do this. It's just like a bad idea. Um, cause you build this inflexible system. It's just super brittle. So we're a big Q and a loop company on purpose. So the second part of Adrian is that like. 90% of our people now that we recruit have never set foot inside a factory. Um, they come from all sorts of backgrounds and. From a workforce and training piece, we can train and onboard them in 20 to 30 days from their Home Depot, their bus driver, literally any background. We have a huge cohort of military people coming in right now, which is really good for us. But the other piece is you have to scale operations really, reall…

AI assessment note: “One is the best software and robotics team... The second thing is talent and workforce development”

Q Big deal, America. I want to talk to you about how you see Hadrian fitting into this picture. Like what role does Hadrian have in re-industrialization?

A So we obviously want to be aggressively in every market. Um, but the problem for the country is so large that we need about 20 Hadrians. Um, I think CapEx heavy or complicated businesses have a unique property. I don't think there's going to be more SpaceX's. I don't think there's going to be more Andrews, you know, of like new defense primes or neo primes, and I don't think there's going to be more than a handful of large industrials companies. It's very hard to get over the scale of CapEx, the operating scale, enough equity dollars to fund ludicrous amounts of software engineering and the capability to go do that. But we think, the founders and I have re-industrialized, think about that as not just, you know, defense, advanced manufacturing like us. We think about it as pharmaceuticals, consumer electronics, drones, even biotech. So I was having dinner with a friend, um, Last week. And the story with American manufacturing is that the thesis from the seventies was let's give the Chinese the kind of low skilled tasks and we'll outsource more and more of that, but don't worry, we'll always do the design and the advanced stuff. And what is actually happening in reality is when you disconnect production from design, you get very bad at design. And in biotech, this is another area where it used to be that, you know, the scientists over here would, you know, create a new genome or …

AI assessment note: “we obviously want to be aggressively in every market. Um, but the problem”