Private Markets, Angel and Secondary Investing, Sacra

Sacra

Private Markets, Angel and Secondary Investing

Bringing transparency to private markets so investors, founders, and employees can build on conviction. Sacra delivers deeply researched insights on the private companies shaping tomorrow's markets. By surfacing the data, context, and operator perspective that are missing from private markets today, we help secondary buyers and sellers price equity accurately and unlock liquidity for the people building these businesses.

Private Capital Markets

<ul><li>From 2018–2023, a steady drop in edge-GPU prices and high-performance LiDAR sensors—combined with maturing software stacks for sensor fusion and real-time navigation—has driven the cost of autonomy hardware down to where it is viable to put AI systems on every military and industrial vehicle.</li><li>Stitching together demand from across multiple DoD programs tees startups up to build toward scaled production while sidestepping the so-called “valley of death” in procurement—by going wide across the Department of Defense instead of waiting on one make-or-break award.</li><li>Commercially, ruggedized vehicle autonomy is most economically urgent in high-throughput container yards &amp; distribution hubs—where labor is expensive, safety requirements are high, and GPS doesn’t work—with the opportunity to expand from there into adjacent sectors like mining &amp; earthmoving.</li></ul>

From 2018–2023, a steady drop in edge-GPU prices and high-performance LiDAR sensors—combined with maturing software stacks for sensor fusion and real-time navigation—has driven the cost of autonomy hardware down to where it is viable to put AI systems on every military and industrial vehicle.Stitching together demand from across multiple DoD programs tees startups up to build toward scaled production while sidestepping the so-called “valley of death” in procurement—by going wide across the Department of Defense instead of waiting on one make-or-break award.Commercially, ruggedized vehicle autonomy is most economically urgent in high-throughput container yards &amp; distribution hubs—where labor is expensive, safety requirements are high, and GPS doesn’t work—with the opportunity to expand from there into adjacent sectors like mining &amp; earthmoving.

Scott Sanders, Chief Growth Officer At Forterra, On Autonomy For Every Vehicle

<ul><li>Destinus generated $70M in revenue in 2024, up 289% year-over-year from $18M in 2023.</li><li>Destinus (founded in Switzerland in 2021) is a frontier tech company whose stated goal is to build the first hydrogen-powered hypersonic aircraft.</li><li>The EU’s reindustrialization push will send contracts both to homegrown players like Destinus ($29M seed raised, Quiet Capital).</li></ul>

Destinus generated $70M in revenue in 2024, up 289% year-over-year from $18M in 2023.Destinus (founded in Switzerland in 2021) is a frontier tech company whose stated goal is to build the first hydrogen-powered hypersonic aircraft.The EU’s reindustrialization push will send contracts both to homegrown players like Destinus ($29M seed raised, Quiet Capital).

<ul><li>Now, with the success of Anduril ($625M revenue in 2023), SpaceX ($6B revenue in 2023), and Palantir ($2.23B revenue in 2023), the narrative has completely flipped.</li><li>The biggest mistake founders make is considering the $800B DoD budget a single market and approaching it with a land-and-expand mentality, rather than what Scott calls a “conglomeration of micro markets”.</li><li>Between the multi-year sales cycles, hardware-based business models and non-recurring revenue, VCs circa 2017 widely considered defense tech to be uninvestable.</li></ul>

Now, with the success of Anduril ($625M revenue in 2023), SpaceX ($6B revenue in 2023), and Palantir ($2.23B revenue in 2023), the narrative has completely flipped.The biggest mistake founders make is considering the $800B DoD budget a single market and approaching it with a land-and-expand mentality, rather than what Scott calls a “conglomeration of micro markets”.Between the multi-year sales cycles, hardware-based business models and non-recurring revenue, VCs circa 2017 widely considered defense tech to be uninvestable.

The Biggest Mistake Defense Startups Make

<ul><li>In World War 2, as conventional armies faced off in large-scale ground battles, the government enlisted hundreds of American private sector contractors to build the tanks, planes, and boats—see Lockheed’s (NYSE: LMT) P-38 Lightning fighter and Electric Boat’s (NYSE: GD) USS Gato and Balao-class submarines—that were key to the Allied victory.</li><li>The Cold War wound down in the 90’s and Department of Defense (DoD) spending fell by 55%, triggering a massive wave of consolidations that created modern defense giants like Lockheed Martin and Northrop Grumman, decreasing competition, and increasing the use of cost-plus contracts.</li><li>Anduril ($600M+ revenue in 2023) similarly self-fund their own R&D—spending 100%+ of revenue on R&D vs. ~2% for Lockheed—using miniaturized GPUs developed for the gaming industry to build border sensors and autonomy systems fast and at a fraction of the cost of prime defense contractors, allowing them to win on a lower fixed price.</li></ul>

In World War 2, as conventional armies faced off in large-scale ground battles, the government enlisted hundreds of American private sector contractors to build the tanks, planes, and boats—see Lockheed’s (NYSE: LMT) P-38 Lightning fighter and Electric Boat’s (NYSE: GD) USS Gato and Balao-class submarines—that were key to the Allied victory.The Cold War wound down in the 90’s and Department of Defense (DoD) spending fell by 55%, triggering a massive wave of consolidations that created modern defense giants like Lockheed Martin and Northrop Grumman, decreasing competition, and increasing the use of cost-plus contracts.Anduril ($600M+ revenue in 2023) similarly self-fund their own R&D—spending 100%+ of revenue on R&D vs. ~2% for Lockheed—using miniaturized GPUs developed for the gaming industry to build border sensors and autonomy systems fast and at a fraction of the cost of prime defense contractors, allowing them to win on a lower fixed price.

Anduril, SpaceX, And The American Dynamism GTM Playbook

<ul><li>Forterra raised $75 million in a Series B round in September 2024, led by Moore Strategic Ventures, XYZ Venture Capital, and Hedosophia.</li><li>Forterra operates a B2B dual-use business model that leverages a single autonomous driving platform across both defense and commercial markets.</li><li>Forterra's core AutoDrive platform enables expansion into adjacent autonomous vehicle markets beyond its current focus on logistics and tactical vehicles.</li></ul>

Forterra raised $75 million in a Series B round in September 2024, led by Moore Strategic Ventures, XYZ Venture Capital, and Hedosophia.Forterra operates a B2B dual-use business model that leverages a single autonomous driving platform across both defense and commercial markets.Forterra's core AutoDrive platform enables expansion into adjacent autonomous vehicle markets beyond its current focus on logistics and tactical vehicles.

United States

Autonomy stack for defense and commercial vehicles with integrated hardware and software

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Forterra (FORTERRA US)

Scott Sanders, Chief Growth Officer At Forterra, On Autonomy For Every Vehicle

Last time we spoke, you talked about a “single product, multimarket” autonomy vision. You hoped to be cash flow positive within eighteen months....

Sacra

Destinus At $70M/year

TL;DR: Europe’s rearmament will pour hundreds of billions into EU domestic defense tech companies like Destinus, Helsing and Rheinmetal (XETRA:...

Sacra

The Biggest Mistake Defense Startups Make

Anduril circa 2017 was a highly unsexy company, both for Silicon Valley software engineers put off by its work on the southern border wall and for...

Sacra

Anduril, SpaceX, And The American Dynamism GTM Playbook

TL;DR: Product-centric defense tech companies are flipping the traditional military procurement model based on cost-plus contracts, self-funding...

Sacra

Primer: Forterra - 14 Dec 2023

Autonomy stack for defense and commercial vehicles with integrated hardware and software

Sacra

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