Startup Nominal Raises $27 Million to Aid Defense Tech Boom

Lizette Chapman
3 min read
0

(Bloomberg) -- Lux Capital, General Catalyst and Founders Fund have been backing a startup that wants to accelerate the creation of hardware used in space, energy and other sectors critical to national security.

Most Read from Bloomberg

The startup, Nominal, has raised more than $27 million from some of Silicon Valley’s top firms while operating in stealth for two years. The existence of Nominal, its investors and customers, hasn’t been previously reported.

The company is developing software for the growing class of tech startups building drones, satellites, nuclear reactors and other advanced hardware. Its customers include portable nuclear micro-reactor company Radiant Industries Inc., satellite startup Muon Space Inc. and space manufacturing company Varda Space Industries Inc.

“The tools to build spacecraft are the same as they were 50 years ago,” said Founders Fund Partner Delian Asparouhov, who is also a co-founder of Varda. Varda has been using Nominal’s software for its work manufacturing pharmaceuticals in micro-gravity. “I love what they’re working on,” Asparouhov said. “There’s a dearth of software for hardware engineers.”

Nominal is led by Cameron McCord, a former submarine officer who served in the US Navy as a nuclear engineer and a congressional liaison. McCord previously worked at defense tech companies Anduril Industries Inc. and Saildrone Inc., and most recently as an investor at Lux Capital.

During his two years at the VC firm, he talked to founders at more than 100 hardware startups and discovered the same challenge he encountered while at Anduril and Saildrone — a lack of great software to do the work was a major problem across the growing industry.

Engineers at advanced hardware startups create software workarounds, he said, often involving a patchwork of solutions strung together with custom code, or making do with systems intended for traditional hardware companies that ship new products every 10 years — instead of every 10 weeks. Nominal’s platform aims to centralize functions like data monitoring, analysis and visualization, so that engineers can more easily collaborate, test and develop products.

The bet on Nominal is also a wager on a growing class of privately backed hardware companies inspired by the likes of Elon Musk’s Space Exploration Technologies Corp. and Anduril. VCs plowed $32.4 billion into aerospace and defense startups last year, quadruple the total in 2017. But most companies in the industry are still unproven, and the US Defense Department — with its complex procurement processes and aversion to risk — hasn’t yet started to spend as much money buying technology for startups as many in the industry would like.

Read More: The Pentagon Is Spending $900 Million to Boost Defense Startups

General Catalyst Managing Partner Paul Kwan, who leads the firm’s Global Resilience practice, expects Nominal will further accelerate work for companies in the industrial and energy sectors along with defense. “Nominal could be a critical enabler,” Kwan said. “The transformative elements of software haven’t really hit those industries.”

McCord co-founded the company with Jason Hoch, a former software engineer at Palantir Technologies Inc., and Bryce Strauss, a former spacecraft engineer who worked on satellites at Lockheed Martin Corp. McCord expects to double his team to 50 this year at offices near emerging defense tech hotspots Austin and Culver City, California.

Nominal has won $4.3 million in government contracts and is hoping to expand its relationship with the Defense Department. “I would love nothing more than to bring the Nominal product to American and Western allies,” he said. “Time is ticking and we’ve been trying to move as fast as we can.”

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.

Advertisement

Recommended Stories