Nominal raises $75M Series B led by Sequoia to accelerate systems testing for defense and enterprise

Reach out when you got your next scoop. Yeah, you can have you on same day to talk about it. Some more context. This is great. Absolutely. Thanks for having me. Take care. We'll talk to you soon. We are surrounded by journalists. Hold your position. Uh we have Cameron from Nominal coming on the show next.

Oh, he's already in the studio. Jordy, I'll let you take the intro. I got to run. I'll be right back. Let's do it. Welcome in. [Music] There he is. What's going on, Cameron? Welcome to the show. Good to see you. Thank you. Good to see you guys. You've uh you've been busy since the last time.

I don't I don't actually know when that was. Maybe it feels like maybe a month or or two ago, but time flies. I think it was Yeah, I think it was about a month ago. And the fun the fun fact with that is um that was like right in the middle of the 10day you know series B uh fundra sprint.

Um so I absolute chaos absolute chaos and um you know people will appreciate this Connor Connor Love from Lightseed uh Ventures posted uh or you know tweeted earlier today but I was actually taking that uh that prior TBN call from the Lightseed office here uh like in between that way.

So he was he was able to see, all right, how how does Cam handle himself, you know, in a in a in a in a a TV like setting, not that we're Exactly. It was a good tactic. He was like, "Hey, do you want to be on this and just take it from, you know, take it from our office? " And then, you know, so that's awesome.

Break down break down the new round um kind of how it came together, who are the different players, all that good stuff. Yeah, absolutely. So, I'm really excited. Yeah, we're announcing a $75 million series B. Uh that is There we go. There we go.

led by led by Sequoia um in particularly Alfred Lynn um is going to be joining joining Nomal's board um and then as we mentioned um there's an additional investment from Lightseed Venture Partners combination of Guru Chahal there and Connor Love um which we're really excited about and then existing investment from uh from our investors at general catalyst Lux and Founders Fund um so it's basically you're collecting you're collecting them all at this point yeah got that's amazing.

Talk talk about um business progress since since the last call. I'm sure things are moving really quickly. Yeah, things are moving really quickly. I mean we you know we we're raising this capital um to accelerate just to go faster. Um you know really three big things we're going to do with this.

The first is kind of continue to expand into larger and larger enterprises.

We're very proud to say uh you know many of the you know the startups and scaleups building in this new hardware wave are are nominal customers um and that is going to keep growing but you know recently we've been taking our product to these Fortune 500 companies you know defense primes um and the traction has been really really positive uh we're also expanding internationally um so we're already serving a handful of customers in Europe and we're going to keep keep doing that.

The second big thing is product development. Uh and so we, you know, we have a big belief that to win really big in this software for hardware world, it's going to require multiple products. We've started uh our original thrust is around testing.

But we're having customers pull us in listing linking testing to more quality acceptance testing production manufacturing and then later in the life cycle saying hey I use nominal to build all of the software you know build all the rules and logic that governs how my my system works under test and I actually just want to you know uh version control that uh organize it and I want to deploy that on my asset when it's in the field and more of a a monitoring sort of fleet monitoring fleet maintenance use case.

So, we're building products um and we're going to be expanding. So, that's that's the where the funding is going. Yeah. How how big is the market for this or how how should I think about the market?

Um is this is this something where there's a lot of incumbents that that you can kind of go after and pull away from or live? Yeah.

you know these words or or or are we are we kind of like uh like disagregating test functions across all the companies and and and allowing teams to move faster and selling into existing organizations.

Yeah, it's really um you know the way I think about it is it's helpful to just give like a quick you know update a kind of the status quo world and so I think we see um pretty much everywhere we go that testing is too slow and really you have uh scenario A where people are using 1990 software it's pre-cloud so it's it is like especially in the aerospace and more industrial world um software that was built before the the notion of like centralizing data even existed it's uh it's crazy and uh and people are really frustrated with it.

So those are you think of things like um you know Seammens or or Emerson or National Instruments which I had to kind of mention last time. So that is an area where there's a direct swap for spend like people people spend a ton of money there.

Um those are billion dollar businesses that that we are excited to be be disrupting.

And I think the second area is where people are taking new software and new data technologies that are not designed for hardware uh at all in the least and trying to use those to sort of aggregate together and build this like tool chain um for testing and nominal is just a better way.

Um and so that's sort of you know showing showing these organizations what the future can look like um and delivering that value and and and they're willing to pay for it. What what kind of metrics do you track outside of core kind of business metrics?

Are you thinking about like like trying to figure out like the if you're increasing the the development timelines for your customers in some ways like if you can allow people to just iterate test faster, you can actually just allow them to accelerate their businesses.

Like how how much how much do you try to track that kind of thing? I know a lot of it it's probably hard to to fully capture.

Yeah, I'd say I'd say I had a a a phone conversation with um with Brian Shy um CEO of Anderl where you know he sort of was saying emphatically like the one of the metrics he looks at like the single most important thing is like how fast are my uh you know individual programs testing like it is such a direct correlation to just like the success of that product.

Um and that is what we see like you know everywhere. So at the high level like the value that we're delivering is increasing that test cadence and that throughput um you know being able to to to have you know uh cases where at our customers you know test campaigns that were supposed to take 9 months taking 6.

5 months right that's that's something we deliver to a customer and when that's on a $200 million program where their end customer is the DoD like that's massive right um you know it's funny for a product like nominals we actually you know we obviously track user engagement and time in app and all these sort of functions.

But that's honestly like not the best correlation.

We sort of say it was really exciting as you see more and more time people spend in the app and a lot of our northstars actually like I kind of want a test engineer to be able to drop into the app for a little bit, get the insight that they need really quickly and then if they move on, you know, that's that's actually fine.

Um because they're that value that is compounding. Um are you guys going to actually set up an international presence at all? You said you have a bunch of international customers. Are we going to see a nominal office in the UK? Australia. Australia. Got to go to Australia. It's a quick flight. Canada.

You're naming You're naming some good places. I'll say um I am I'm doing sort of nominal's first uh big, you know, international business trip actually over the next two weeks. So, going to be going to the Paris Air Show. For international business. I love international business.

We love an international businessman on the show. Yeah. It's an honor. It's an honor. Yeah. Yeah. um going to be going to the yeah the Paris Air Show and then and then um uh you know stopping in in uh the UK as you kind of mentioned.

Um yeah, I mean we're really excited and I think we'll build a backlog of business before opening like a you know physical office there but I think it's absolutely you know in in future and we're excited for that.

Uh you mentioned Australia general aus world like we're we're really supportive of that and they they want and need all the same things that our US-based customers do. Yeah, I I I I noticed you you offer the service on on premise still. Obviously, a lot of companies are moving on cloud.

Uh how important can you give me some dynamics around like uh hyperscaler adoption within these within within these industries like AWS GovCloud ITAR compliance like I know Palanteer got some super high ITAR clearance. There's obviously different tiers to this stuff.

Uh yeah, is there one hyperscaler that's kind of pulled away in this category? Yeah, it's a really good uh it's a good question. I you know from nominal's perspective, our goal is to be as uh sort of flexible and as versatile as we can. So we we don't um really pick any one you know provider.

I'd say from our product perspective um we have two products in the market right now. The nominal core product which is where we started which is cloud-based. The whole value proposition there is you can get all of your telemetry, sensor data, logs, test, you know, uh data in one central place.

Run analytics and and automate. Uh very quickly we we launched our second product uh which is nominal connect which is actually a desktop application which sounds crazy to say and and uh you know in but we're we're meeting our our customers and we need to market where it is. It's run on uh it's built in rust.

It's run on a game engine, right? So it's not your your your normal uh uh and so it you know super deterministic workflow sub 10 millisecond latency like this game engine are you using it's Unreal. Yeah. Unreal. No way. That makes a ton of sense. That's cool. Um so it's really cool.

So being able to to have a you know where whereas it used to be um you know maybe a a National Instruments you know desktop app with like a little widget and you you can kind of envision the um the thing from 1990.

Uh you know we have this insane super fast rendering 3D visualization of our customers robotic systems or drones, right? Like with telemetry coming in and the power is that can run completely airgapped, right?

If you're in Mojave or you're downrange like doing something, all that data is still going to your laptop and then as soon as you get connectivity, it syncs back up to the the kind of nominal mothership, all that data is sort of merged and dduplicated and it's super powerful for for our customers to be able to make sense of what happened.

Does Epic have a different business model for this kind of like industrial use case? I know that like isn't Unreal Engine free unless you're generating like a million dollars in revenue like how do you pay uh Tim Sweeney? Yeah. Yeah. It's a good uh you know it's a good it's a good question.

I I um I'll I won't you can answer it at a high level. I'm sure you can details. Yeah. No, I mean it's like we we're really excited about I think we're really excited about the technology and and kind of where it where it can scale. Just I'll leave it I'll leave it at that. Okay. Cool. Yeah. Yeah.

Well, the market is speaking. I I I looked it up. The company that owns uh National um Instruments uh is actually down a few percentage points over the last 6 months, most likely in reaction to extremely correlated. They're just already pricing it in. So, of course. Of course.

Well, thank you so much for hopping on super. Do we hit the gong properly? Let's hit the gong. Alfred Lynn on the board. That doesn't happen every day. Amazing. Amazing. Big gong. Um, yeah, super excited. Come back on anytime. Cameron, congratulations. We'll talk to you soon. Thank you guys. Appreciate it.

We'll see you. Our next guest is uh Anneil from Meter hopping on in 5 minutes. We'll go through some time. By the way, Cameron's Cameron's resume is just absolutely insane. Product and growth at Ander, advisor to applied intuition. Oh, let's go. Head of defense at Sale Drone. Investor operator at Lux Capital.

and then now started nominal. So, uh it's almost like he was built for this or win tour. Um I mean there's other news. It's not really techreated, but it's related to our friends in the Wall Street and finance community. Uh the race for Democratic nomination for New York City mayor is heating up.

Andrew Cuomo is dropping like a stone on Poly Market. Uh Zoron Mdani is uh absolutely spiking. He's at 42% versus Cuomo's 56% right now. Uh, Signal has a breakdown. He says, "This is a textbook example of narrative discipline. Whether or not you agree with Zoron's platform, the coherence is surgical.

Every message hits the same emotional register. Every post or speech is a variation of the same core chord, anti-machine, people first, morally upright. His surge is pure mimetic lift. It's pure belief. And belief spreads fast. This is the guy that just says freeze the rent. That's his platform. Yes.

And every time he post his new bit, his new bit is um is eliminating police presence in in areas that have high crime. Yes. Yes. So, a lot of acceleration excited about this. A lot of people that are are anti- New York are are supporting this because they think it will destroy New York.

Um but he is gaining ground and he might be the next mayor. Who knows? Um uh every time he posts about freezing the rent, Nikita Beer chimes in and says, "Don't you think the rent the rent should just be free? " You're not going far enough. Yeah. Housing. You're not going far enough pig. Capitalist pig.

Also, new all-time high for Oracle. Let's hear it for Oracle. Wow. Let's go. Ellison is