Khosla Ventures is in talks to lead a $100 million funding round into buzzy drone startup Mach Industries, Forbes has learned.
The Los Angeles-based company, which makes a military strike drone, has discussed the funding round with Khosla Ventures partner Keith Rabois, according to two people familiar with the negotiations; three other people said Mach had been in discussions for a $100 million. The deal could value Mach as high as $400 million, one person said, a slight increase from its last funding round, which valued the company at $335 million.
The discussions are ongoing, and the deal could change, the people said. Forbes couldn’t immediately determine which other investors are involved.
Mach Industries, Rabois and Khosla Ventures didn’t respond to a comment request.
An investment in Mach would be the latest in a string of huge deals for Silicon Valley defense companies that are hoping to secure major Pentagon contracts, including autonomous boat company Saronic, which raised $600 million with a plan to build its own shipyard, and military radar firm Chaos Industries, which recently raised $275 million at a $2 billion valuation, Forbes reported Wednesday.
The funding round would also be a major vote of confidence for Mach, led by Ethan Thornton, an MIT dropout and Forbes 30 Under 30 alum, who has emerged as one of many young, patriotic founders that are building weapons companies to serve the U.S. national security interest.
Thornton launched Mach in 2022 at age 19 with an initial goal to build a suite of hydrogen-powered weapons. That pitch earned interest from investors Sequoia and Bedrock, who poured in more than $80 million into the company. But Mach ran into early issues, including an incident where an employee was sent to hospital covered in shrapnel after a hydrogen-powered gun exploded, Forbes previously reported. (He recently told one publication safety hazards “occurred because we did not have the money to hire experienced engineers and operators to make sure these things were conducted properly, and the proper equipment to run tests.”)
The company has since pivoted to building a conventional strike drone that it calls Viper, in addition to an aerial glider and a balloon that carries communications equipment. In March, the company announced that it had secured a contract to develop a drone with the Pentagon’s Army Applications Lab; it didn’t disclose the value of the agreement.
With growing national security concerns over U.S. military drone companies relying on Chinese components, Mach also revealed plans to build a new factory to produce jet engines for drones.
However, Thornton was recently forced to respond to scrutiny over a Chinese-made jet engine featured in a promotional video of Mach’s drones; he previously clarified in a statement to Forbes that while Mach used Chinese components in testing, its drones aren’t sold with them.
Like Andreessen Horowitz, 8VC and Founders Fund, Khosla Ventures has been making more bets on national security and space companies, including funding rounds for Varda, which does materials testing in space, and hypersonic aircraft startup Hermeus.
For Rabois, the Forbes Midas listmaker who rejoined Khosla from Founders Fund last year, an investment in Mach would signal a shift in interest to hardware companies. The famed investor previously helped lead major software companies like OpenDoor, Square and OpenStore, and as a partner at Founders Fund, he held board seats at Ramp and Affirm.
On Wednesday, Rabois was on stage at the Hill and Valley Conference in D.C., a government and tech focused conference cofounded by his husband Jacob Helberg, calling for Silicon Valley technologies to be adopted for streamlining government operations. “All this stuff is solved in the commercial world,” he said.
