Defense tech startup BlueHalo makes lasers that shoot drones out of the sky. This is how it got the Army to buy them.

Defense tech startup BlueHalo makes lasers that shoot drones out of the sky. This is how it got the Army to buy them.
  • Defense tech startup BlueHalo was founded five years ago by Jonathan Moneymaker, a Gold Star Brother.

  • Its high-energy laser systems are now officially being deployed overseas by the Army to shoot down drones.

  • Moneymaker told BI why succeeding in defense tech isn't just about having the most groundbreaking solution.

"Our job is to keep men and women that are putting themselves in harm's way safe and bring them home."

It's the kind of patriotic mission statement echoed by plenty of eager young defense startups. But for BlueHalo CEO Jonathan Moneymaker, it's personal.

"I'm a gold star brother, which means my brother was killed in the Navy," Moneymaker told Business Insider. "Technology could have saved his life. And part of this is making sure that others have that opportunity."

Moneymaker is now five years into running BlueHalo. In that time, and with the backing of private equity firm Arlington Capital Partners, it has designed, tested, and fielded the Army's first major laser weapon system. It's a rapid rate of turnaround, practically unknown to the bigger, more established defense contractors.

After securing a $1 billion contract from the Pentagon this year, BlueHalo is now delivering its Palletized High Energy Laser (P-HEL) system to the Army, enabling them to blast drones out of the sky with AI-powered pinpoint accuracy.

BlueHalo's Locust laser air defense system, which is designed to shoot down small drones, rockets and mortar shells
BlueHalo's Locust laser air defense system, which is designed to shoot down small drones, rockets and mortar shells.BlueHalo

But it's not just lasers. BlueHalo also produces autonomous systems, counter-drone technologies, space technology, and cyber warfare solutions, all underpinned by its machine learning software, Metis.

"If you look across our portfolio of focus and offerings, there are very few [competitors] that can rival us in that totality," CEO Jonathan Moneymaker told BI.

The Virginia-based startup is not quite at the level of defense tech unicorns like Shield AI, Anduril, or Epirus — which are increasingly biting at the heels of defense primes — but following a merger this year with Eqlipse Technologies, BlueHalo is fast approaching $1 billion in revenue and has 2,400 employees across 11 states.

And the contracts keep flowing in. This week, it secured a $95.4 million contract with the Space and Missile Defense Command (SMDC) to develop prototype directed energy (DE) solutions.

BlueHalo CEO Jonathan Moneymaker
Blue Halo CEO Jonathan MoneymakerBlueHalo

As the Department of Defense (DoD) has slowly come around to the idea that it should buy commercial military tech, numerous tech startups are hoping to follow the same path, providing solutions for US national security while getting a share of the $842 billion defense budget.

Industry experts have cautioned that grappling with the legendary complexity of the defense industry makes it unlike entering any other growth market.

"Primes are not particularly innovative because they mastered the acquisition process rather than the technology process. However, startups lack a couple of things," Steve Blank, adjunct professor of Management Science and Engineering and co-founder of the Gordian Knot Center for National Security Innovation at Stanford, told BI.

They typically lack a go-to-market strategy and fail to understand the complexity of getting an order from the Department of Defense, said Blank.

The DoD buys to satisfy what's called a requirement, where someone has specifically requested something. Writing that requirement is a long process that primes themselves typically help out with, Blank explained. Startups are often clueless about that process and completely out of the loop.

Next comes the actual acquisition process, which can take two or three years to even show up in a budget — a problem if you're a startup in need of a flow of orders and cash to satisfy your investors.

"If you don't understand this process, then the primes tend to win," Blank told BI.

Blue Halo

Unlike the swathe of Silicon Valley tech firms eyeing up defense, BlueHalo has its roots on the other side — Moneymaker has spent the last 25 years in the defense industry base.

It's that insider know-how combined with the operational speeds typical of the tech world that BlueHalo says has enabled its success.

"We have the experience, know-how, and sophistication of some of the traditional primes in our space, but we have the entrepreneurial and innovative speed and spirit of some of the newer entrants."

What has been critical, said Moneymaker, is understanding not just what the military needs but how to earn the trust of defense officials and navigate the procurement process to get it into their hands.

Silicon Valley is facing "some learning curves" in this regard, he noted.

Often, tech companies will have exquisite groundbreaking technology, but it's not actually what the military needs, or it will be incredibly hard to actually field, he told BI.

"Knowing where it's applicable and where it's not is incredibly important. Frankly, if you haven't grown up in this environment, sometimes that just takes a little longer to get familiar with," said Moneymaker. "We listen better than a lot of our competition."

Blue Halo

Another factor Moneymaker sees as an advantage is BlueHalo's lack of Silicon Valley ego.

"We lead without ego," said the BlueHalo CEO. "We've all done exciting things in our careers, but this is about being part of something bigger."

But despite its industry-insider knowledge and an Arlington base, there are still some sides of BlueHalo that it shares with traditional tech — like a somewhat cringy company community name: Halo Nation.

Next, like any successful startup, it is planning a path to IPO, hoping to be ready within a year. If all goes to plan, the "ring of protection" that Moneymaker says BlueHalo represents will only be getting bigger.

Read the original article on Business Insider