Transcription
If we can't build a thousand boats, I actually don't care about the design and how cool it looks.
Thousands of companies show up to sell their technology to the US Department of Defense each year. But so few will transition from proof of concept to true production across the valley of death. The select few who do, their stories are rarely told. Until now, I'm Noah Shinbound, [music] and this is Crossing the Valley.
All right. So today on Crossing the Valley, we are thrilled to have Dino Matukus, the CEO, the co-founder of Seronic, if not the, certainly in the small group of some of the hottest, the fastest growing, the highest profile defense tech companies out there. Dino, thanks for joining us today.
Well, thank you for that, and thank you for having me here. It's a pleasure.
Yeah. So, all right, let's let's get on get on azimuth here. January 2026. Seronic is, I think, a little over what, two years old at this point?
A little over three. We're about three and a quarter. We were founded in September of 2022.
There, that's I violated rule number one, which is don't do public math. Uh, so there you go. A little over three years old. Give us the, or orient us a little bit. Where are you as a company today? How would you describe where on that trajectory from day one to where you ultimately want to be?
Ultimately, where we want to be, we are just scratching the surface of what Seronic's going to accomplish. I'll tell you the historical relevance of why September 2022 is actually really important when you look at everything happening around the world. But three years in, I mean, what we've been able to accomplish to date, it's pretty incredible.
We've [clears throat] we have a thousand employees. We have six locations in the United States. We have two locations internationally, one in Australia, one in the UK. Our Austin headquarters, which I'm actually in today, is about 500,000 square feet. We can build 2,000 plus Corsair units every single year, which is our flagship US small USV, which is a 24-foot autonomous speedboat.
And then at our shipyard in Franklin, Louisiana, we're scaling Marauders, which are 180-foot autonomous ships. And then back to your original question on where are we going, we're only taking that and scaling production even more. So, we're going to bring shipbuilding back to the United States in a way that we haven't seen since World War II, and we're going to build the largest, most advanced shipyard in the world in the process.
No small bets. No, no, these aren't bunts. These are uppercut swings. I'm excited to dive into this with you, Dino. Let's go back to the, let's go back to the beginning for a second here, and then we'll, and then we'll fast forward and get us up to speed.
You guys, I think speed has been kind of at the core of this company as long as, I mean, I'm an outside observer, but as long as I've certainly known about it. And I think one of the, you know, you've, you were on, you know, Joe Lansdale's podcast talking about being an 8VC build company. Your background as a Navy Seal and then in finance and now as a founder, obviously mission kind of at the core there. Take us back to what was the first time that you, that you thought you would build a shipbuilding company, or what was that, what was that kernel of that idea at the earliest moment for you?
The thesis for Seronic has evolved even since we started the company. So, I'll walk you through kind of why we started Seronic, and then how our thesis has evolved into now becoming one of the world's, if not the world's, largest shipbuilder. How, how does that transpire?
We started the company in September of 2022. The reason why that's important is the very, very first USV strike in Ukraine was actually October 29th, 2022. So, six weeks before that happened, we filed our incorporation paperwork with the state of Delaware. We raised capital. ABC backed us, and we said, "We're going to go and build this company that's going to redefine maritime superiority for the US and our allies around the world. And we're going to build small unmanned surface vessels or small autonomous surface vessels to go do that."
In fact, our first product was a six-foot, think of it as an autonomous mini jet ski. It was, it was tiny, but we built it in five months. We built it extremely quickly, and we started testing with the customer in real time that let us learn, adapt, and evolve and iterate extremely, extremely quickly where we launched a 6-foot, 14-foot, and then ultimately a 24-foot that let us get real product market fit, and that became our flagship first product which then gave us the traction, the customer success, and everything else we needed to go and scale into shipbuilding.
But it was that first moment where we just looked at the market. We looked at what was happening in the defense space, and we said there's a ton of innovation happening around autonomy, aerial drones, subsea drones, but nothing was really advancing on the surface for the Navy and autonomous boats and ships. So there was this massive gap in the market.
That's, that's great from one perspective, but as an investor, what you really want to identify is, does that matter? Is that gap going to be filled? Can you build a multibillion-dollar business or a generational business around solving that problem? And that's when we really started to dig in on what's the current state of our Navy today.
And then you understand shipbuilding and the gap that we have with the Chinese, and how China has 230 times the United States' shipbuilding capacity. They have 57% of the world's shipbuilding capacity. And those are great stats, but you really realize that when you look back in history, what has let navies prevail is not the navies that had the larger, more exquisite, more expensive platforms. It's the navies that could build more ships, the navies that just had larger fleets.
And the Chinese Navy's already larger than the United States Navy. And with those trend lines and manufacturing capacity, who knows where that could be in five years? So we just looked at that problem and said, we as the United States, the United States Navy actually does not have another choice but to start adapting autonomy and to take a new look at what does naval power actually mean in a world of autonomous systems, because we can't just keep building ships the way that we used to. It takes 8 to 10 years to build a new naval ship, and they cost billions of dollars, and we have nowhere near the capacity that China does.
So when we looked at that and realized that the only thing I couldn't answer was, when is the Navy, when's the government, when's the military actually going to start adopting?
Yeah. When are they going to accept this new reality that we need to adopt not only for research and development, but at scale and integrate into the fleet? And six weeks later, Ukraine, the first USV strike in Ukraine happened. That was a real catalyzing moment within the US where officials within the, the officials on Capitol Hill and officials within the military started saying, "Hey, we need to adopt at scale. So, let's really start putting dollars behind this." And we were right there already building, building the advanced technology that they needed, and we've taken that and just scaled it moving forward.
Yeah. So obviously you guys nailed the timing, which is, as we know in the startup world, just about as important as anything, if not, if not more so.
Um.
That's right. And you can, you can never intentionally time a market perfectly, right?
It just, it just happened that way, and we had full conviction in the thesis of where naval power was going.
Yeah. But you also can't dollar cost average your way into a startup, right? It's at some point you, you make the bet, you push your chips to the middle, and...
That's right. [clears throat] You got to go all in. That's what I tell my team is, like, we're going to build conviction, and then we're going to go invest our capital, but we're going to go all in.
Yeah. I, I guess, you know, for, for you though, Dino, like the, the, was there a moment, because I know I've, I've heard you, you know, talk in other forums about, hey, wanted to get back to the mission, wanted to go build. Was there, was there a like a, a crucible moment, or was there an actual inflection point for you when you were in your, you know, that finance world doing what you were doing, when you were like, no, I, I like this is when you made the decision, when the switch flipped, when you said, all right, that conviction is there, I'm going, I'm going after this?
It wasn't a light switch moment for me. It was more like I realized I was the frog in the boiling pot of water, and I needed to get out. Right. And what I mean by that is, my finance career was great. I really enjoyed my time in finance. Vista was a phenomenal company. I learned a ton. I'm still very, very close with folks that I worked with.
The first two or three years in finance were, were, it was all brand new to me. I was learning everything from scratch. So it was a lot of fun. Year three, year four, and year five were more of, okay, now I'm building and developing my career. I have the basic skill set. And it's really, what are we planning for years 5 to 25? How do I want to spend the next 20 years of my life? And that's when I realized it just wasn't in that.
And it was getting back to the mission. It was building products and solutions that help keep people safe, help keep this country safe. And that's how I wanted to spend my time, and that's what I wanted to continue to dedicate my life to.
I get it. That's a, that's a hard thing to walk away from. When you, so as you guys move towards incorporation, move towards, all right, this is a company, what were the pre-comp conversations like on the customer side? Was it, how much of this was, you know, understanding a market, macro trends, talking to investors? How much of it was actually talking to the folks inside the department, inside the Navy, who, who owned the mission sets at that point?
It was a mix of both, right? It goes back to kind of what I said earlier. One, we had to assess that there was a real gap in the market, but then two, we had to really assess that somebody was going to fill that gap. It, it actually mattered, right? That the, who cares?
I was able to leverage a lot of my connections within the Navy, talk to folks and say, "Hey, what, what problems do you have, right? What problems are you seeing? What missions are you not able to execute on?" And the more that I had those conversations, then not, here's the solution that I'm proposing to a problem that may not exist, but just what are your problems? The more I heard that there, they actually, like, there's nothing in maritime autonomy, and at least in the special operations community, it was all shifting back towards a maritime focus.
As an investor, you're trained to kind of pull that nothing apart,
because if you're talking to a management team and they say there's nothing,
it means one, you don't understand the market that you're in, or two, it's a really crappy market and nobody wants to be there,
right?
So, which one of those is it really? And the folks I was talking to, they understood the market. They understood the things that they had to train with. I actually know the folks that kind of worked on early projects back in 2015, 2016, 2017. The reality was, it really was just a crappy market,
right?
The Navy was not adopting at scale. So there wasn't real money being put to work on innovation. So again, the conviction that we had to build was not, is there a gap in the market, but is this gap going to be filled? And that all goes back to the shipbuilding discussion we had earlier. The United States just cannot build ships quick enough or at a scale that can compete with the Chinese moving forward.
And if we want a credible deterrence, which, look, this is what we're in this for. We're not in this to go to war. We will support the United States Department of War in that effort if it comes to that. But my ultimate goal is to build the platforms that let us deter conflict altogether. And with the shipbuilding capacity and industry that we in the United States have, and the industry and capacity that they have in China, the, the deterrence just wasn't there.
So that's what led us to say, this, this company has to exist. It's not just we want to go and build this company. It's exciting from an entrepreneurial perspective, but as a citizen of this country that wants to dedicate their lives to go and building solutions that actually matter, like we have to go and build this country, this company,
right?
We have to. When you look at the historical parallels to what you're doing with Seronic, there have been a couple of, I think, really interesting books written in, in the last couple of years, even like "Freedom's Forge" and some of these others, kind of how the United States has transitioned kind of latent civilian industrial production capability to wartime production capabilities.
But I'm kind of curious if you have a historical parallel to what you're doing that is coming in explicitly as a military capability that is, that is trying to scale, you know, look, in, in competitive times, no doubt, but still in peacetime. We're not in a, in a shooting war against China. What's, what parallels do you see, or what models are there, models that you emulate?
I mean, outside of the last 30 years, historically, the leading technologies were initially built for the department or by the Department of Defense, and then scaled into the commercial market. The internet was built by DARPA.
Right.
Right. And so you have these examples where the whole reason why that hasn't happened in the past 30 years is just because there's been massive consolidation and decreased spending in our defense industrial base. And we're just seeing that start to turn around now, which gives us that ability to then penetrate the Department of War and sell to the military as an initial customer, which lets us build the scale that we need to then go and attack the commercial market in a really, really big way. I don't know that you could have built this company at another time.
In the other direction. I don't know that you can build a commercial company first if you're going after large-scale shipbuilding. I think you have to get to scale within the government, within the military, which could have only happened at this moment in time where Seronic is executing.
Yeah. So, I mean, the scale piece of this is super interesting because it's such a core part of your strategy, and in, in some ways, it also introduces, you know, a ton of risk. It's, it's, it's, it flies in the face of if there's kind of the two paths to, to business building. And you, and on one side, you've got the, do one thing, do it exquisitely, you know, extremely well, and then do it again, and then do it again, and scale kind of alongside demand as you create it.
And then the other side is, no, actually the way that we, we grow is we've got to be everywhere. We've got to basically capture, you, you've got, you know, ships of what is it, five, is it five or six different, uh, length ships, right, right out of the gate? And so maybe talk us through the decision to go the, like the scale now, scale first, scale ahead of demand. And if there was, was there ever a discussion of doing it another way, or was this the obvious kind of choice for this kind of business?
No, I mean, we thought about doing it another way when we first started, but when you really boil it down, why, why did we choose to put real money into the ground? Build a not only a software and autonomy powerhouse, but a manufacturing powerhouse, right? It is because at the end of the day, scale is what matters.
So what I told my team literally from the day we started the company was, look, if we can't build a thousand boats, I actually don't care about the design and how cool it looks and everything else about the hardware. And I don't care how advanced the software is and all the collaborative autonomy that we're building into it and the advanced UI and the digitization of the entire platform until we can build over a thousand, until we can build thousands, right?
So, let's back into what do we need to build thousands? Well, in order to actually build at scale, you really have to be vertically integrated. You can't rely on, you know, partnerships and other folks, and you, you have to couple that hardware and software co-design, right?
So, the hardware, look, we've been building boats as a society, as a civilization for thousands of years, right? Boats aren't too novel, but we haven't been building autonomous boats, right? So, building autonomous boats, let you, and boats and ships, lets you do really, really interesting things when you take a first principles approach at that boat or that ship design. It lets you strip a lot of the complexity out of it. It lets you optimize for the autonomous mission sets they're intended for, and it lets you design for scalability and manufacturability. So we took that approach from the very, very beginning with our hardware design.
Then we build the most advanced software anywhere in the world. Everything from controls layer autonomy to collaborative mission level autonomy to digitization now of an entire ship. And we can talk about why that's so important, but it really boils down to reliability. When you're putting, you know, thousands of boats or hundreds of ships out into the water that are fully autonomous without people on them at all, you need to digitize every single part of that platform. Otherwise, you're going to have a boat or a ship that's sitting in the middle of the ocean, and somebody needs to duty cycle the engine or do another workflow that isn't digitized. And that's what's happened in the past.
So we've invested in all of those different things in parallel to then get to scaled manufacturing. And to give you an idea of the priority that we really put on manufacturing, you know, we've invested in that since the day we started the company. Literally our, our head of manufacturing, he leads our entire manufacturing process within the United States and soon, soon to be globally, came from SpaceX. He was our third employee.
We sat down and had a conversation, like, we don't even have a prototype design yet. Why do we need to be thinking about manufacturing? Well, if you're not thinking about manufacturing during the prototype phase, when that prototype phase is over, whatever you built is only guaranteed not to scale.
Yeah.
So, we've thought about scalability from the very beginning, brought it into the process, vertically integrated. So, we control our own destiny. We're not incumbent to other vendors. We have supply, very, very deep supply chain that we control. We have a robust supply chain that doesn't include any components from China, by the way. And that lets us build to the numbers that we're looking at.
This conversation around supply and talent density to create manufacturing kind of clusters or manufacturing scale in the United States. Super interesting. One of my holiday reading books, "Apple in China," I don't know if you've read that, fascinating story, right, of, of basically how America's largest company, effectively was the equivalent of state subsidization of, you know, the, the highest end manufacturing facilities in the world in, in, in Shenzhen and, and in China.
And I'm kind of curious from your perspective, you know, as you guys have said, "Okay, we're, we're going to do this. We're going to do it here in America."
It's got to be, you know, an allied or a blue supply chain, whatever you want to call it,
right?
What, what was necessary other than the sheer force of will and, you know, the private capital to say, "Okay, we know it's going to cost a little bit more upfront," what allowed this to happen now that maybe wasn't true that's making it possible for you guys to build that kind of vertical integration here in the United States?
Yeah, it's the software, the autonomy, and the technology that we have on our platforms. If we couldn't digitize the entire ship and remove people off of it, then my pitch turns into, hey, we're going to go build the same exact ships that they're building in China, South Korea, and Japan. We're just going to do it better, faster, and cheaper. And I've told more than one person, I'm pretty upfront about this, is that's a pretty crappy pitch. [laughter]
But if you look at it and you say, "Okay, what lets ships, and we'll just talk about the commercial market for a second." And I'll get into why the commercial market is so important even when you think militarily and towards national security, because it's absolutely critical. But when you look at the commercial market, we don't really build commercial ships in the United States. Right.
And just to give you a sense of quantum, in 2023, the Chinese built 972 commercially flagged oceangoing vessels. The United States built less than 10. So it's a staggering discrepancy, right? Why is that? They have lower labor cost, lower material costs, but most importantly, they can take advantage of economies of scale.
So if you start breaking those apart, labor, material, economies of scale, how do we take advantage of those here in the United States and get to a price point that can not only open up large areas of the economy within the US, but also globally for the commercial shipbuilding industry? Well, you have to lower the labor cost, lower the material cost, and take advantage of economies of scale. The way you do that is through autonomy and digitization.
You redesign the entire ship. You strip the complexity out of the ship, which lets you build modularly, which lets you use less materials. Just for example, like our ships have really seven components on them. You have the water jets, the engines, the fuel, I'm counting fuel tank as a component, right? The bow thrusters, radar sensors, a really large computer packed with Nvidia chips, and then whatever the payloads are, cargo containers in the case of the commercial industry.
So that lets you actually build ships now much cheaper and much faster and at a much higher rate, which then lets you take advantage of economies of scale to bring the price down even more. So without software autonomy and digitization, I couldn't sit here and make the claim that we're going to go build the largest shipyard in the world and be competitive on a global stage. But with that, not only can we, but we're, we're doing it now.
Yeah. And then, and so even with that, that simplicity of the, of, of the components or of the supply chain. So you've got what, I think it's the, is it the six different, the six, the 6-foot, 14, 240, uh, 60, and 180? Is that, do I have that right?
Yeah. We, let's focus on, so our two flagships are 24, our 24-foot Corsair. So an autonomous speedboat, and then Marauder, which is a 180-foot autonomous ship. So on one end, you have an autonomous speedboat, and I'll kind of go through the bifurcation here, is a boat is anything that you could build in a warehouse. Think of it as an auto manufacturing facility. That's what we have here where I'm sitting right now in Austin, Texas. We can build over 2,000 boats per year. They go through a production line. At the end of that production line, they get put on the back of a truck, and they get shipped anywhere in the world. Right?
A ship has to be built on the water, right? You build it, you put it in the water, it lives in the water, you sail it to wherever you want it to go. That's what we're building in Franklin, Louisiana. We're scaling that shipyard as we speak. So, we acquire, I mentioned earlier, we acquired that yard in April. We laid our first weld on June 24th. We completed our hull on December 17th. And not only that, we have two ships in construction right behind it.
We're going to build six ships in 2026, and we announced a project in December where we're investing $300 million over the course of 2026 to be able to build 20 ships going into '27, and then ramp that all the way up to 50 ships per year at that one shipyard alone. And that's completely separate from the Port Alpha, Port Alpha initiative that we talked about earlier.
And what allows you to, I, I guess what I'm getting at is different configurations, different sizes, all, all of that is fundamentally just derivative of those, of those components. You don't need an entirely new supply chain to produce an entirely new vessel, whether it's a boat or a ship. Is that right? Or, or is there how much customization?
If you're in the same size class, and there are minor differences between our different platforms, but if you just talk about boats specifically, boats and ships, less translates in hardware land. To be clear, everything in software land translates across all of our platforms. So we're not rebuilding the software. We're not rebuilding the autonomy. We're not rebuilding the user interface and the platform that operates all these vessels every time we launch a new boat or ship.
In boats, we tend to have 80% hardware consistency or overlap between products, which again, back to your point, lets us move very quickly into launching a new, a new prototype or a new product. And then in ships, the same way. This is our first ship in, in this class. So, as we move up in size, we'll see that same dynamic play out.
How much of the, the product roadmap or the, the production roadmap? How much of that is being dictated by customers at this point versus you still now scaling production ahead of demand? Like what, what's the split between things that Dino thinks are a good idea that we need to do as a company versus the customer is actually paying you to build these things?
We have a large contract that we announced earlier in December with the United States Navy. The Secretary of Navy actually came out and announced that we had a $392 million contract. More importantly, he announced that this is the model for how the Navy wants to do business moving forward, right? Seronics is the gold standard.
How do you build ahead of demand? So, I'll answer your question specifically in a second, but how do you build ahead of demand? Invest capital to get to scale. So, we're not in this cost-plus contracting dynamic that we've been in for far too long where companies sit around, they make cool PowerPoint slides, they wait three to five years for the government to develop a requirement, and then they say, "Hey, I can build that for you if you pay me to do it." That's not what we're in the business of.
So, we're going to continuously invest ahead of demand, right? That, that's our business model, right? How do we invest our own dollars to build products that we have conviction in? Again, doing the market research and talking to the customers and the end users. Really building that partnership and that collaboration, but then investing our own money to build the products that we think are needed, that the government is interested in before they're actually putting out formal requirements and going to solicitation.
So that when they get there, it's not, oh, look what we can build you. It's, here's what we built. We think this meets the requirement. Here's where we're scaled to today. If your demand outpaces this scale, here's how quickly we can ramp our demand, and we're ready to serve your needs right now. Right? That's where we always want to be. And so, we're going to keep investing our own money. You know, our Marauder that we're building down in Franklin, Louisiana, that's the model we're following.
The next ship that we build, that's the model that we will follow. Right? Somebody told me very early on, they're like, "Nobody's crazy enough to build a ship on Irad,"
right? But now you have the Department of War saying that that's how ships will get built, right? That's what the future of government procurement looks like, and that's what we're investing in.
How are you thinking? And I'm sorry to drill down on this, but I think I just, it's, it's super interesting because if you get this wrong, right, you could, you could develop conviction, but, but build the wrong thing. And if you build the wrong thing at scale, you're just, you're on a highway to bankruptcy, like, and you're going to piss off your investors.
So the, where you guys are talking about, all right, we're going to build X amount, right? We've got to get to this kind of scale. The requirements got to catch up. The contracting's got to catch up. Obviously, you've got a great team. You're not, you're not just making this up. They're, they're understanding. They're projecting where the department's going. They're gently probably nudging the department in a certain direction and shaping that requirement and that, and, and those, and, and those acquisitions.
But how do you make the decisions of like, what's the almost the, the pre-starting gun scale that you want to get to? How do you all think about that from a first principles approach inside the company? The scale you need to get to before it's like, you're staging your bets, right? We're not, we're not putting so much on the table that if we lose this bet, that the company's going to go bankrupt, right? We're putting enough on the table to really lean in, take a risk, make a bet that we believe in.
But ultimately, look, if all our bets play out, and if we hit every single one of the bets that we make, then we're actually not being risky enough. So, it's how do you stage those investments? And look, I told you we have the scale to build 2,000 Corsair per year. When we started building Corsair, I didn't say just go build 2,000 Corsair every year, right? It was, what are the gates that we need to get to? Let's build the prototype. Let's build 10 of those. Let's go test it with the customer. Maybe we got it 80% right. Maybe we got it 85% right. Let's iterate on that. Let's see where the demand goes. Let's build it to get it to 50 per year, 100 per year. Oh, the demand's actually for more than that. Great. Let's ramp up to meet that. Right? So, that's how we think about it.
Same thing with Mirage. Same thing with Marauder. As we launch new products, it's let's make real bets in what we're convicted in. But again, like if we go bankrupt, that doesn't help anybody. So, we have to be very, very thoughtful about where we're placing those bets and how big those bets are we're placing. And as we're raising more capital, the percentage of your overall base decreases, but you're actually able to put a higher quantum to work in R&D, which lets you launch really, really new and exciting platforms,
right? Let's talk about your customer a little bit, and talk about the Navy, because I think there's been a dramatic shift and a dramatic, you know, kind of reprioritization of speed and scale and, and this new kind of way of doing business. I'm kind of curious how you've seen this evolve from a, from a supplier side, from a vendor side, from a, you know, on the production side. Are you guys, what person, you know, is, is this still about writing proposals? Is this about how are you getting acquisitions done through testing and demonstration events? Is it, what, what are the different ways that you all are now gaining traction and making progress with this customer vis-à-vis or versus what it might have been, you know, 10 years ago?
What it was 10 years ago, completely different. It was a completely different landscape.
Look, you mentioned my, my SEAL career earlier. I was in the SEAL teams for 11 years, 2004 to 2015. My last five years were on SEAL Team Six. The only reason I say that is, this is actually the fastest I've seen the military adopt new technology in my lifetime. And that's a pretty bold statement to make.
So the changes that they've made in the, in their procurement process are drastic. Like there are rapid acquisition pathways, there are increase in funding, there is a massive focus on adopting new types of technologies. All those things exist. I mean, if you go back even to the 1940s and 1950s, and you read "Skunk Works" about Lockheed Martin, their number one rule was, don't do business with the Navy.
So, for a really, really long time, the Navy has been not just a customer in the Department of War, but one of the worst customers within the Department of War, Department of Defense, and that, that's changing very, very rapidly. And so, we're excited to partner with the Navy in that change. And, and the way we do that is again, build ahead of demand.
So a very, very tactical story, when we launched the company, I talked about our, our six-foot mini autonomous jet ski that we built. That was our first product. We built it in five months. In month six, we were out testing that with the customer, getting real feedback, saying, "Okay, what works? What doesn't work? Okay, it did this, it didn't do that. Let's push it a little harder. Let's see where it go. Okay, this doesn't quite meet the mission that you were looking for, but we were close."
Five months later, we launched a 14T platform. Five months after that, we launched our 24. So, we were launching new products every five or six months, but then immediately testing, getting real-time feedback and understanding where in the paradigm of different mission sets that they were meeting, where that was, and they were iterating, developing, and improving.
And then not only that, now that Corsair is a developed product, right? It's established. We have the production line up and running. We're delivering to end users, but we're still testing five, six, seven days a week on our own. We have three different test facilities. We have one in Virginia Beach, one in Galveston, Texas, and one in San Diego. We're testing in all three sites, again, five to seven days a week. We're pushing these platforms to the limit. We're sending them out at high sea states. We're basically trying to break our own boats. So, we're figuring out what works, what doesn't, how do we make it better, and then we're constantly iterating and improving, not just in hardware, but in software as well.
Yeah, it's, the pace is dizzying. When you, I guess, let's, let's just, let's talk tactics here. When you're saying, "Hey, we're testing with the customer," are you bringing them to, to you? Are you bringing them to you? Are you going to them? Like, are you going, are these fixed events, demonstration, or?
Yeah. Yeah. We, we do it all, all the above.
What does it take to get the customer to come to you? Let's, let's share a little sauce, as the kids say here, you know, like if you're a founder and you're trying to get a customer to show up to test your stuff, what's working for you guys?
It's got to be something they're interested in, right? It's got to solve, not to be flipping, but it's got to solve a problem.
It's not about the barbecue or the, or the, or the free lunch,
right? It's got to really solve not just a, a problem, I like to say, but to get the government to really act on something, it's got to be a, oh, we're screwed if we don't solve this problem, type of problem. And if you're solving those types of problems, and you're building the right relationships with the customer, and you're investing your own money in testing, oftentimes it's actually easier to get the customer to come to you because you don't need contractual. You don't need contracts and funding and government test ranges and all these things. You just say, "Hey, come by our test facility in Virginia Beach or in San Diego when that works for you. We'd love to show you what we're working on."
Do you have success stories of going from, hey, a, a demo, a test, you know, you iterate, you incorporate feedback to, to acquisition? Like, is there a story you can tell us about how that's, how it's gone from just like, it's not just about show and tell, but it actually results in a, in a contract?
That's the contract I mentioned earlier. It's a $392 million contract with the United States Navy. And absent the dollar amount, the, the Secretary of Navy went on and announced and really said, this is the way that the Navy wants to do business moving forward.
We started building that, we started building Corsair, that product line, completely at risk before there was any solicitation or any formal requirement for it, because we understood the different missions and we were talking to the customers and doing different things to kind of map out the landscape of the market. Plus, we were working on Spyglass and Cutlass, and we were seeing what wasn't working. So, we were improving on our next vessel.
So that when that requirement came out, Corsair was actually really well suited for that, and we had invested the time and the energy and the money upfront. We were able to prototype and demonstrate that vessel for the Navy, show them and prove to them that it worked, right? So you have to prove that it works, and then not only prove that it works, but, okay, we write you a contract for X number of dollars and Y number of boats. Prove to us that you can actually build them and deliver them on the timeline that we're looking for. So, showing them the manufacturing capability and scale that we've developed alongside the prototyping effort was a big part of that as well.
Yeah. I, I don't know how you can show that you can do it by writing a proposal. Like, show the way you show them to do it is that you can do it, right? So, it's, it's just seems like we're finally catching up with common sense in, in procurement, which is exciting. That's, that's a big, that's a big moment for America.
If we, if we look forward now, you know, and kind of pivot, so you, the, where you are, where you're going. All right. So, maritime autonomy, ship build, you know, you're, you're, you're dominating shipbuilding, that's the goal. You're building the world's biggest shipyard. How are you, if you're going to continue to invest ahead of demand and ahead of requirements? You know, where does this go next? Got undersea, are we going to see in other domains? Like, are, does the, does the competitive landscape actually get more competitive as you grow because you start growing in others' territory? Like, how are you thinking about future expansion?
I won't say, I won't ever say no to other expansion areas, but we're really focused on maritime shipbuilding, surface of the water, naval power, right? Not just for defense, but for commercial. And, and I'll talk about the commercial market in a second, but the reason why the commercial market's so important, even if you're talking about military power, is because what the Navy's actually looking for is wartime production capacity of vessels during peacetime.
The only way you get that is if you fill that gap with a commercial book of business. The only way you can fill that gap with a commercial book of business is if you can actually compete economically, i.e., bend the cost curve on what it takes to build ships in the United States. Again, the only way you can do that is through software autonomy and digitization, as per our earlier discussion. And so that's why we're so focused on the commercial shipbuilding industry.
It provides things outside of just purely military vessels that are absolutely critical to national security. You're talking about energy dominance. You're talking about global maritime trade where 80 to 90% of the trade happens on the seas. In modern history, every global power has been a maritime power, right? And maritime or naval power has really just been determined by who can build the most ships. We have to get back to building ships in this country again. We have to. And that's what we're laser, laser focused on.
That's the focus of Port Alpha. Port Alpha, we want to stand up 10 million gross tons of ships every year. Now, gross tons is kind of a wonky measure of what does that actually mean, right? But it's a volumetric measure of ship. And again, remember, China builds 23 million gross tons. The United States builds 100,000 gross tons.
So what that actually means is we want to 100x the shipbuilding capacity in the United States through this Port Alpha initiative that we're going to invest $5 billion or more over the next five years, create 10,000 plus jobs, and it's going to be the world's largest and most advanced shipyard, which lets us diversify our revenue base outside of just defense into commercial in a really big way and attack this multi-hundred billion dollar, trillion dollar global shipping industry.
Yeah. What, what has to be true to support that level of run rate production? Like, do, do you have to believe in, do we have to believe in a conflict with China scenario, or, or what's the thesis behind supporting that?
No, the, the thesis behind, again, the whole thesis behind why we're building this company is to avoid a conflict altogether. So we're not dependent on a conflict happening in any way. What needs to be true is that we actually build ships at scale that can compete in the global shipbuilding industry. Right?
We, right now, it's anywhere between one and a half to 3x or more the cost to build a ship in the United States than it is in China, South Korea, Japan. We need to bring that down. We need to compete globally. We need to open up areas of the United States commercial shipping industry that just don't exist today. And then we need to expand that around the world. That, that's what needs to be true to support that scale.
And then you have a segment of that production that is allocated towards defense in peacetime. And then if we get into a conflict, God forbid, you take all of that commercial capacity and you immediately convert it to defense.
Yeah. So that, that's the, and that's the, the switch over that, you know, we've done war times before. So this, this is great. And we're going to come back. We'll, we'll finish off with, with something here.
But one of the questions we've been asking a lot, because there's a lot of people who right now, you know, defense is, is hot. It's cool to support America from a building, a builder perspective right now. We love that. We want more of that. One of the things we try to do is, you know, folks who are interested in breaking into this industry. I, I love to give folks a chance to like, to, to give us Dino's call for startups or Seronic's call for startups.
You know, you all are, you're, you're a, you're a player. You're a big player, but you're one player in an ecosystem, and, and players have partners, and, and you're, you know, you're integrating with, in, you know, in others, and you're integrating others into what you're building. And I'm kind of curious as you guys have grown in the space and taken up, you know, more and more the, frankly, the, of the oxygen, the spend in the room. But what are the, what are the problems that are still left unsolved, or that you would like to see modern approaches, whether it's to manufacturing or to software, hardware, that you think are, are particularly interesting, particularly juicy, that, that someone really should take a look at?
Oh man, I mean, there, there's really two, almost too many to list. I mean, if you think about where we're at right now on the curve, let's just call it the defense tech curve, right? There needs to be so much more investment across the board. Yes, there's been investment over the last two, three, four years into defense tech. And now defense tech, as you said, is hot and cool, and they're driving money into the market. But that's after 30, 35 years of massive consolidation, and we're in year three of essentially a defense tech renovation or renaissance.
So it's, there's so many areas to go from autonomy to cyber to hypersonics to space that if you think you have an innovative idea or a unique way to solve a massive problem, and you're positioned in a way that nobody else is to go and solve that problem, then, then go for it, right? Put your chips on the table, go and raise capital, and go for it, because there's, there's so much runway in this market.
And candidly, to your point, the country needs it, right? The country absolutely needs it. I mean, we just finished 2025. I'll give you a quick stat. We just finished 2025. In 2023, so two years ago, less than 1% of the $411 billion that the Department of Defense awarded in new contracts, less than 1% went to venture-back startups.
So, we're, we're at the super early innings of this, and it's going to be a really long race. The country needs innovators to put their time, energy, and capital to work to build what we need. And we're seeing the best and brightest that this country have, that this country has, really flock back into defense. I mean, our software engineers, our hardware engineers, everybody is the best in the world, and they are extremely passionate at serving their country and building and, and dedicating their talents into an area that helps protect this country and make it the greatest country in the world.
Look, it's, it's a good enough pep talk that I'm not going to push you for a specific technology or problem set area, because the important thing is we get young, hungry, motivated folks working in this space. Dino, we made, we made a commitment. We're going to get you out of here. Before I let you go,
write the, write the test for yourselves next 12 months. What is, how should Seronic be evaluated? But whether by the, by the, by the investment community and the, and the, and the private capital markets, by the customers, what, what do you want to be assessed on? What should folks be expecting to see from you in the next 12 months?
Yeah. The, the only thing I tell our team is, we got to do what we said we were going to do. So, we have to scale the platforms that we have today. We have to launch Port Alpha. We have to break ground on that. We have to complete our infrastructure projects that we have going on in Franklin, Louisiana. And we have to continue to deliver for the customer. It's really simple to lay out. It's a really tall task to go and execute on, but we're going to go get it done.
Love to see it. Well, presumably you're going to need some more able-bodied men and women to help you in that task. If folks are inspired by the mission, inspired by what you're building, Seronic hiring, where should they, where should they go to learn more?
Oh, seronic.com. We have a recruiting page. You can go and drop your application in. We are absolutely hiring. We went from just around 200 to a thousand people last year. So 5xed our headcount last year. I don't know if we'll quite 5x it again this year, but we're going to grow really significantly, and we're always looking for hyper-talented individuals that are passionate about the mission. So please go to seronic.com, drop in your application, and we'd be happy to talk to you.
It's a, a hell of a growth story so far. There's a long way to go. Excited by the team you're putting together. Glad that you guys are in the fight, and glad that you're on our team. Dino, it's, it's great to talk to you. Thanks for making the time, and we'll look forward to following the story.
Awesome. Thank you. Appreciate it.