Forterra raises $238M Series C to build autonomous defense vehicles and open-architecture battlefield systems

Speaker 6: Yeah. Mean, first first off, long time listener, first time caller.

Speaker 1: I think

Speaker 6: it was actually the subject of the original TVPN, print the internet situation.

Speaker 1: Oh, yeah.

Speaker 6: While you were printing out physical memes, and I criticized that. You criticized it?

Speaker 2: Okay. Well, came around.

Speaker 6: I came around.

Speaker 2: Was it was it like we were using up too many Were you use of paper

Speaker 1: Is this a very environmentalist that you anti printing or something? What was going on?

Speaker 6: No. I was you know, the Internet exists on your computer. What's the need to physically print it off every day?

Speaker 2: Well, I printed your new we printed I will put it out there. We printed your news here. We printed your news. Because we cared so much. We wanted to physically hold

Speaker 1: Wall Street Journal. We like Financial Times, you know. You'll come around.

Speaker 2: Should we should do like a TBPN, like, every episode we plant a tree just to make sure that, you know, we're we're replacing

Speaker 1: But I feel like you I feel like we're kindred spirits. You you work on physical things. We we work in in physical in the physical realm. Of course, there is a software element to everything that both of us do. But, give us the update on on on what you're building because, it does touch the physical realm. Correct?

Speaker 6: That is that is true. We do we do build hardware.

Speaker 1: Okay.

Speaker 6: Yeah. We, we announced a $238,000,000 Woah. Series c today. I think there's a sound effect that happened.

Speaker 2: There we go.

Speaker 1: Congratulations. There

Speaker 2: we go. Massive. Fantastic.

Speaker 6: Yeah. But we're we're building distributed systems for defense starting from the ground up. Mhmm. You know, we feel the warfighter, you know, you need drones, you need maritime capabilities. There's great companies building that. Yep. But we're focused on building stuff that primarily goes on vehicles because at the end of the day, you know, try not to walk into combat if at all possible. And we want to be able to equip those war fighters with technology and distributed compute at the tactical edge that enables vehicles to be self driving, act as nodes and relays, launch things like loader ammunitions, put radars into place to, you know, detect aircraft or detect enemy shipping, and then put, you know, anything from cruise missiles to anti ship ballistic missiles in the back so that we can deter our enemies from invading countries and want them to invade.

Speaker 1: Yeah. My my mental model for this stuff is, a little a little hazy. Maybe you can help clean it up. I I feel like there's there's usually, like, one company that does just autonomy. There might be another that's doing, some sort of battlefield tactical mapping, some awareness things. It sounds like you're doing multiple. How how do you actually interface with the other the other touch points? I mean, if if, who who do you need to integrate with since some people might be familiar with maybe what Palantir builds or what Andrew has built on the, on the operating system level? How how like, what what can you give me some concrete examples of, like, groups that you're working with or technologies or platforms that you're building on? Like, what's the what's the wheelhouse case study for Fortero?

Speaker 2: Yeah. And on on top of that, I feel like the challenge from a product roadmap standpoint or product planning standpoint is you have to understand what are the systems that we have in place in our armed forces today, and then how the battlefield is actually changing. Mhmm. Because we've heard from other people on the show that, you know, a lot of the equipment that we have might not be relevant in a world where the frontline is is just drone on drone action.

Speaker 6: Yeah. I think one of the best examples of doing this is actually with one of our partners, Raytheon, where we or in this case, Chaos in that quick little snippet. Yeah. Where with Raytheon, we and Oshkosh, we integrated our edge compute platform and our self driving software to take a traditionally manned vehicle and make it unmanned. So one, by putting the edge compute on self driving vehicles, you're enabling other algorithms and other platforms to run on top of them. So we think about the ecosystem as a partnership approach where we're not gonna make everything that a warfighter needs. In fact, no defense company, defense tech or otherwise can do that. Mhmm. And so we open up our architecture and our system so that a Palantir can run at the tactical edge, not on a giant server rack somewhere. Or in the case of the the small multipurpose equipment transports that you're looking at, we put chaos's long range, by static radar system on it to detect drones. And our, you know, future integrations with those guys will enable them to utilize our compute and our autonomy later. We don't care who's doing the c two. We obviously do our own because you kinda have to. But if that's Andrew's Lattice or Palantir's Gaia or smart system. We're very open to that, and we've broken up our system in a way that enables the user to sort of make the decision of what capability they want for each different application layer and not wrapping it all into one holistic platform unless that's what the the end user and the customer wanna do.

Speaker 2: What was, yours or the team's reaction to, Pete Hegsef's speech last Friday? They, we had Catherine Boyle from Andreessen on talking about how Hagsteth was basically making a case that it was it Cheney made back in like 2001? Mhmm. So these are basically, reforms that have been people have been asking for for a long time, but we haven't been able to actually deliver.

Speaker 6: Yeah. We were we were lucky enough to to be at that event. And, you know, defense tech reform is people is a thing people have been talking about since before defense tech was a thing.

Speaker 3: You

Speaker 6: know, the acquisition system has become extremely complicated and, I think, difficult to work with for many companies. And it's, you know, to have a secretary of war coming out and saying, like, look, this is a this is an actual problem. Right? Like, the the rate limiting step on getting technology to operators is very rarely whether there's the technology that exists that can solve the problem. It's can it work its way through the prototyping in a production phases and get in get into scale production with a with an end user. And that's been very hard. Palantir has been at this for twenty years. Andrew's been at this since 2017. And definitely not gonna do that math in public, although it'd be quite easy to do. Yeah.

Speaker 7: I'm math guy.

Speaker 2: A growth guy.

Speaker 1: Growth guy. That's amazing. Okay. Speaking of growth, where where how how is the company growing? I mean, we we we've texted about this. It it's all SBIRs. Right?

Speaker 6: Yeah. Just all SBIRs all day long. Actually, no. Too big for SBIRs now, which is great. Yeah. We're about about 550 people total. Yeah. And so, you know, we're not still not that big in defense tech or defense world, still relatively small. Yeah. Trying to be a scrappy startup and, you know, work with not only legacy primes who build incredible systems. Right? There's no one in defense tech building eight by eight twenty five thousand pound armored vehicles that

Speaker 7: can go head to head with,

Speaker 6: you know, major land forces across Europe.

Speaker 7: Sure.

Speaker 6: There's only a couple of small startups that are starting to do the missile systems that we wanna put on the back of these platforms. Sure. But our approach is we open up and enable our architecture to work with nearly anyone to deliver that that capability to tactical edge. We really just feel like humans being the blunting force of combat is a pretty bad idea. And we have probably 20% veterans at Forterra, a lot of us feel very strongly and very passionately that I would much rather have a robot make first contact with the enemy or be the platform that is a meeting a large signature on the battlefield. Something firing a missile, firing a howitzer, moving a radar. Mhmm. So the platform is inevitably targeted. It's not a human that's getting targeted. It's a machine. And we're trying to change that dynamic, you know, one platform, one program at a time.

Speaker 1: Well, thank you so much for coming on the show, and thank you to all the veterans. It was Veterans Day yesterday. Right? Thanks, everybody, for your service. Yeah. And, congratulations on all the progress, and congratulations on the series c.

Speaker 2: And next time you come on, we will, not print out your news. We'll just go in blind.

Speaker 1: Yeah. We'll just because

Speaker 2: we don't know how to use computers.

Speaker 6: As as long as the next time I'm in at 10:30 at night, I'm I'll be stoked.

Speaker 2: Wait. Are you in are you in Lisbon right now? Were you guys at Web Summit?

Speaker 6: Josh is at Web Summit. I'm in Paris, at Tech Talk. I'm in with some customers.

Speaker 1: So Okay. Cool. Awesome.

Speaker 2: Yeah. Alright.

Speaker 1: Well Yeah. We can coordinate better on the time.

Speaker 2: Congrats to the whole team on on the progress.

Speaker 1: Yeah. Awesome. We'll

Speaker 3: see you soon.

Speaker 1: We'll talk to you soon. Have a good day.

Speaker 2: See you.

Speaker 1: Numeralnumeral.com, not numeralhq.com anymore. Numeral.com. It's sales tax and autopilot. Spend less than five minutes per month on sales tax compliance. Our next guest is Jamie Alaire from Circle. Just had earnings. Welcome to the show, Jamie. How are you doing? Good to see having him.

Speaker 13: I'm great. Good to see you guys.

Speaker 2: Welcome back. Fantastic. Welcome back. Thank you.