Hermeus raises $350M and flies its second aircraft in nine months, pushing toward Mach 5

Speaker 1: the Still at number one at a 100

Speaker 2: Very excited.

Speaker 1: $35,000.

Speaker 2: Our next guest is Zach Shore from Hermes. He's returning to the show with some massive news. Zach, how are you? Where are you? What's up?

Speaker 9: I'm great. Thanks for having me, guys. This is your

Speaker 2: second outdoor guest today. It's fully spring. Spring.

Speaker 1: Spring.

Speaker 2: Riley was in San Francisco. I assume you're in Georgia?

Speaker 9: No. Close. I'm in Virginia. I'm at the Defense Action Forum, the JP Morgan

Speaker 2: Oh, cool.

Speaker 9: Event. So good place to be when you're announcing a $350,000,000 unicorn round. There it is. That's what I was looking for.

Speaker 2: There we go.

Speaker 9: Thanks, fellas. And congrats to you as well.

Speaker 2: Thank you. Thank you.

Speaker 9: Big moves for the the TBPN fellas. Fellas.

Speaker 2: Big moves. Big moves.

Speaker 1: What's new? What's it's it's been a minute since you've been on the show. Yeah. Give us Yeah. Give us all the updates.

Speaker 9: Yeah, guys. A lot. I mean, obviously, we've got the raise, but the raise is a function of of the milestones. So, you know, we flew our second aircraft in nine months, which is pretty unheard of. The first one we flew last year in, like, May '25. Yep. And then we just flew our mark two aircraft. That's an f 16 sized unmanned aircraft. So, you know, fighter jet speed, fighter jet size, thousands of pounds of payload, thousands of pounds of thrust. We're slated to fly it again on Friday. There you go. Exactly. That was out in White Sands. Wow. And, you know, imminently pushed this thing to supersonic and and really just start really start building the heavy systems that the country needs. The second aircraft, which is a Mach two aircraft, is in production right now in Atlanta. And then we we just announced also that we're expanding our headquarters out to Los Angeles in in the Gundo. Nice. And we're gonna build our platform out there. So yeah, we'll

Speaker 2: be neighbors. I'll come see you guys. That's amazing.

Speaker 1: Alright. What with with autonomous jets is how how does how is the development and just like r and d process different? I imagine I imagine there's a bunch of advantages because you're not worried about a human life. Obviously, there's still a bunch of risk and you don't wanna, you

Speaker 7: know Yeah.

Speaker 1: Crash crash the thing that the team worked so hard to build. But the the iteration cycle feels insane based on on how you've described it. And so I'm curious how

Speaker 9: Yeah. I mean, you you kinda nailed it. Right? I mean, taking a person out allows you to take a lot more technical risk. Just like full stop.

Speaker 2: Yeah.

Speaker 9: I can lawn dart something intentionally, right, just to push the envelope on a vehicle to run What is

Speaker 2: the lawn dart?

Speaker 1: Is that Yeah.

Speaker 6: Just like

Speaker 2: Yeah. I guess.

Speaker 9: If we need to, that's not

Speaker 7: our goal.

Speaker 2: Yeah. Yeah.

Speaker 9: You could. Right? If I really want to find the edges of performance and there's nobody on board, you you have that you can take that kind of risk. And then you can iterate faster. There's also I can take all of the systems that exist on an aircraft that are there for human survival, the oxygen, the ejection seat, all the command and control capabilities, the the human human machine interface screens, the the stick, the throttle, all that. I can pull that all out, and I can put in more payload, more fuel, and just continue to drive more capability for the warfighter. I mean, we just saw that incredible mission to to rescue those f fifteen pilot and copilot in in in Iran. And, ideally, you know, you have a vehicle like this. You don't have to do a rescue mission. We don't even have to put ourselves in those positions and ask American men and women to to take that kind of risk. So there's, you know, operational utility to the unmanned platform and there's a significant accelerant to development because of the risk we can take.

Speaker 2: Yeah. Take us through the different aircraft that you've built so far because the and then remind us of the goal

Speaker 3: of Yeah.

Speaker 2: How fast are we going? Is like miles per hour the correct benchmark for each subsequent test? I imagine that you're trying to make each one faster than the last, basically.

Speaker 9: That's that's correct. I think, you know, we we speak in terms of Mach, right? So Mach one being supersonic. Yep. But so the first aircraft was not really an aircraft. We called it Turkey. It was Mhmm. Sort of a actually, Before that was Emu. Excuse me.

Speaker 2: Emu.

Speaker 9: A flightless bird. Yeah. Right? So that had a jet engine, and it had a bunch of the avionics and the sort of radio links to just show that we could build an integrated team, build some hardware, hook up the engine, and get this thing sort of taxiing down the runway. We did that in in '24. In '25, we built Turkey, which was a flying bird, but turkeys don't aren't meant to fly. So that aircraft flew at Edwards, and we demonstrated we could rapidly build a jet powered aircraft. It was a 10,000 pound airplane. It had fixed landing gear. It was a GE j e five engine Mhmm. Which is the same engine that you see on the jet trainers that American men and women train on. Mhmm. And that was in May '25. And now we're on mark two, and we call that aircraft Eagle. And this is where it gets kind of fun. Right? This is where you start to see what I would call product utility. So this aircraft is the size of an f 16, maybe a little bit bigger, fully unmanned. It's got a 30,000 pound thrust engine. To give you a sense of comparison, like the CCA program, those engines are roughly at 3,000 pounds of thrust, so you're looking at 10 x more power, about 10 x more payload, and just a totally different problem space that we're working in. And the first aircraft of this series, we're building three of these mark two eagles. The first one we flew that that's what you showed the video of. This one will go supersonic. So the premise of this aircraft is demonstrate that the the the vehicle design, the shape, they call it the outer mold line, can get through something called transonic. So transonic is that that window right before supersonic, and there's a lot of very unique things that happen, with physics, for lack of a better term, right before you go through that supersonic window in terms of shock waves and stability for the platform. And so you really wanna demonstrate that your plane can make it through that, you know, point nine nine Mach to 1.1, 1.2 Mach window. That's a huge risk window that we're gonna unlock Yeah. Here shortly. The next vehicle, Mach 2.2, will have some additional pieces of proprietary technology on it. Our proprietary precooler, which is a technology that sits in front of the engine, will be on that next aircraft. That aircraft's being manufactured right now in Atlanta, And that will allow that airplane to do Mach two plus. So now we start to really get into that really, really high speed regime. As an example, you know, the f 15 is the fastest fighter jet in the world right now. That aircraft in a dive with nothing on it will do maybe 2.5. Maybe maybe Mach 2.5. So we'll do we're gonna go for that number straight and level with this aircraft. And then the third aircraft in this series is going to be Mach three. And that aircraft is gonna be manufactured in the new El Segundo facility and and will be flying somewhere around the '27.

Speaker 2: Talk about the actual technology.

Speaker 1: Speed is just insane. Yeah. Speed of r and d. It's what

Speaker 9: The iterative design, guys. I mean, right? Like, continue to build hardware so that as I am build as I am flying the current airplane, I am building my next airplane. Right? And so on and so forth. I mean, is SpaceX over and over again. Right? This is SpaceX for aviation, or as we say, SpaceX sideways. So, you know, that's how you can take this kind of this hardware risk and continue to go. And and to your original question, our goal is Mach five. Right? That remains our goal. But the key technical unlock in here is actually Mach three. Because in order to unlock our next propulsion approach, we need to demonstrate that you can get a turbine engine, this case, the f one hundred two twenty nine, the f 16 engine. We need to demonstrate that I can fly that engine at mach three for a period of time. And so that's what this series of aircraft are gonna do. And then we've also got some pretty exciting, you know, capabilities that we're gonna be able to offer to the warfighter with this platform at at the same time.

Speaker 2: How focused are you on the on the on the defense industry specifically? Because there must be demand from commercial. There's demand from the AI world for this technology. How are you thinking about the trade offs there?

Speaker 9: Yeah. Great question. So commercial is one of those things where, yes, this technology eventually will naturally lend itself to a commercial application, but we're a ways away from that. I mean, if we think about just aviation historically, you start with the the defense environment. Think about how jets and planes were even adopted. Mean, the Department of Defense is going to take more risk and going to, you know, help develop inherently just by operating these systems, these technologies to lower the complexity, lower the risk on them so that they can be eventually adopted in a commercial environment. But the other problem is when you work into commercial aviation, the the flight certification requirements for a new commercial engine or a new commercial airframe are steep.

Speaker 5: Sure.

Speaker 9: For good reason. Right? We're putting people on board.

Speaker 2: Yeah.

Speaker 9: So to have the economic viability to pursue that certification process requires you to have a stable business that's got robust economics.

Speaker 2: Yeah.

Speaker 9: So for us, even if, you know, we do eventually wanna go after commercial, you have to build a viable defense business first just to have the economic scalability, not to mention the expertise on the platforms. And so for us, you know, I certainly wanna do commercial work eventually, and I think these propulsion systems will lend themselves, but we are a defense company. Right? Yeah. That is our bread and butter. That's where we're focused. We're not interested in some of the, you know, the energy plays on the propulsion. We are really just true north unmanned high mach, high altitude systems for the warfighter. And as those systems come online, we will be, you know, the arguably the best aircraft manufacturer in the world, and that we'll start lending that to other aircraft problems.

Speaker 2: Talk about the actual technology that enables you to go Mach three, Mach four, Mach five, Ramjet, scramjet. What what is the what's the lineage here? How much of this has been used in the past? What are you inventing from scratch? What are you pulling off the shelf and leveraging?

Speaker 9: Great question. I mean, a lot of what we're doing has been done before. Mhmm. We're trying to stay out of the world of science problems, which is where you get into the scramjets mach six seven and stay in the world of engineering problems.

Speaker 6: Mhmm.

Speaker 9: And science problems, things have to be invented that don't exist yet. Specific materials, production processes. Ramjets have been around since the fifties. NASA did a lot of work on this. You see these on missiles currently and all over the place. And so ramjets are very well understood and and well tested. And so what we're doing is taking a different approach with the propulsion system and using something called the turbine based combined cycle or TBCC. Mhmm. And this is an engine type that's a mix of multiple propulsion cycle propulsion systems. NASA sort of led the way on this, and we demonstrated this propulsion cycle on the ground in about 2022. And I think DARPA is the only other group that's done this, and so us and DARPA are only people who've demonstrated this propulsion cycle.

Speaker 7: It's

Speaker 9: got basically three components to it. You got your inlet, and the air comes in. And and the first thing that happens is we've got a proprietary precooler that that cools the air down and and slows slows the flow. It then hits the turbine. So in this case, the f one hundred two twenty nine, the the jet engine. So we're not building a new jet engine. Now the challenge has been with ramjets, for a ramjet to light, the air has to be moving through at mach three. So how do you get the system? How do you get that air flowing in mach three? Typically, we've seen it in missiles with rockets, you boost it. Right? Use a solid rocket or liquid rocket, but that has a couple problems to it. Number one, you have to really harden the system to handle all those g's, and you're not going to have big wings because of drag. So you're really looking at systems that are not really optimized for flight, and they're just one way. So with an aircraft, you can have a more graceful acceleration. We are able to basically tune that jet engine, that to that f 100 to get mach three airflow. It goes through the ramjet, and then I can light the ramjet. Now once I light the ramjet, I could coon off the turbine engine. I route the air around it directly into the ramjet. Now I can fly mach three to mach five. Mhmm. When I decelerate, I do that whole system in reverse. I open the doors, the air comes through the turbine engine, the ramjet shuts off, and the traditional jet engine takes over and takes me from Mach two back down to the ground. And this is why it's called the turbine based combined cycle, because I'm combining these two propulsion genres. And it allows us to use mature technology to unlock these sort of these flight conditions. And you won't get much above Mach five. That is hypersonic is that line at Mach five, and we don't need to get much five. Above There's two reasons. One, survivability and and the sort of analysis we've seen is it's overkill, and you're gonna find yourself in sort of physics land that's gonna cost you more and take you a lot more time to run up that curve. And, also, you get in the mach six seven world, now you're in science problem world. That's scram jets, which are still kind of more new. That's CMCs for very bespoke material sciences. Right? I can have a hot end a hot vehicle that's titanium or inconel or steel, and I can mass produce that to handle the the heat and temperatures. And so what we're doing is taking a lot of old information, we're and modernizing it. And for that matter, the the s r 71 had an aircraft called the d 21. You can Google this. It was a drone that sat on top of the Blackbird between the the right on the back between the engines. And once the aircraft was above Mach three, they turned that aircraft on. It was only a ramjet, no moving parts. The air flowed through that ramjet. They lit the ramjet, the aircraft flew off, and it went Mach three plus for about 3,500 nautical miles. And so in this way, we can start we can start accessing those conditions again just like we did in the fifties

Speaker 1: and Were was the d 21 like a single use designed to fly like reconnaissance or

Speaker 9: to fly reconnaissance. Yep. Exactly.

Speaker 5: Then it would just ultimately

Speaker 1: crash and burn?

Speaker 9: It would it well, it was supposed to return. They didn't end up going the full distance with it. They had a couple successful test flights. They also had some bad flights where they had some challenges. You can look up the history. But more importantly, this concept was executed and validated in the sixties. Right? And so we can take modern practices and all these learnings and sort of bring bring the past forward and say, you know, speed is in vogue again. You know, the in the introduction of ICBMs and stealth technologies really took America's focus away from high speed systems, and that's why nobody really worked on these things for about sixty years.

Speaker 2: Question from the chat. There's a claim that China has a system that can go Mach 20. Do you know anything about that? Does that seem realistic or propaganda

Speaker 9: or It like South China morning news if anybody's aware of that

Speaker 2: Okay.

Speaker 9: That that that newspaper. There's lot of claims. So I mean I'm not privy to anything but I would call I'd call shenanigans on that.

Speaker 2: Okay. Last question. Talk about the decision to expand to El Segundo. Incredibly cool community at the same time three time zones away. Feels difficult to manage a team. Is it about talent? Is it about Yeah. Resources? What's the thesis?

Speaker 9: Yeah. It's talent. It's it's talent talent and tacos. Talent and tacos. Right? You you've got the core engineering talent that knows how to iterate on hard heavy hardware, heavy high speed hardware

Speaker 7: Mhmm.

Speaker 9: Is really resident there and nowhere else. And, you know, ultimately, as much as the hardware we're building is exciting and innovative, the sort of the team we are reconstructing reconstructing is really the unlock for this business because aviation has not seen this pace of iteration or these flight conditions in a generation. So it's not like we can go and hire somebody from insert company that's done this before. We have to effectively take the best we can find from, you know, the the closest parallel and then, you know, bring them into the the aircraft world and say, take what you learned from, you know, innovating and you know, and and and working quickly on rockets and now apply that to aircraft. And so if you really want that talent and you want to draw that talent, the best place in the world to be is El Segundo.

Speaker 2: Well, congratulations on the round. Congratulations on the progress. And enjoy the rest of the conference. We'll talk to you soon. Very

Speaker 9: so much.

Speaker 2: Have a good one.

Speaker 3: See you.

Speaker 2: Goodbye. Up next, we have Hongwei Liu from Madapan in the waiting room. Let's bring him in to the Ultra Dome. We're still figuring out the transitions between gas. We're working it. How are doing? Welcome to the show.