Accelerating Hard Tech Startups Through M&A
When, Why, and How
Bit of a longer post this week, but on an important topic: Hard Tech M&A!
Most startups don’t think about M&A until they’re big. But in Hard Tech, that’s often too late. Planning early, even before you have the resources to execute it, can set you up much better for success later.
Whether you're building autonomous drones, maritime platforms, or vertically integrated production systems, you don’t have time to build everything yourself. If you wait to "own the stack" organically, the opportunity passes or someone else ships first.
We’re seeing a new playbook emerge. Venture-backed Hard Tech startups are using M&A early to accelerate technical capability, meet urgent customer demand, and leapfrog entrenched incumbents.
Done right, M&A is one of the most powerful but underused tools in Hard Tech.
Four Situations Where M&A Makes Sense
1. Time-to‑capability matters more than theoretical elegance
Government programs don’t wait. Strategic buyers don’t wait. If a sensor, subsystem, or team lets you ship faster or qualify for a contract, you acquire it and go. The “we’ll build it in 18 months” mindset can kill (customer) momentum. Sometimes you need to close the gap in 6 weeks, not 6 quarters.
2. The ecosystem is fragmented and acquirable
The Hard Tech landscape is full of niche, subscale companies:
A 5-person team with deep RF expertise
A boutique shop building propulsion systems
A legacy DoD supplier stuck without a modern GTM strategy
These are not VC‑scale businesses on their own, but they’re perfect puzzle pieces for a focused startup with customer pull.
3. Customers want breadth before you’re ready
Winning major contracts often requires capabilities outside your initial wedge. That’s fine. M&A, led by the right team and done at the right time, can help you level up faster than your roadmap alone would allow. It can help you move quickly from:
Autonomy → Full platform integration
Sensor → Data fusion and analytics
Device → End-to-end workflow
Household Names Demonstrate What the New Playbook Looks Like in Practice
Anduril has aggressively expanded its autonomous systems portfolio through M&A, deploying acquisitions as capability accelerants:
In September 2021, it purchased Copious Imaging, the MIT Lincoln Lab spin‑off known for passive wide‑area infrared sensing (WISP), further strengthening Anduril’s force protection sensor suite .
In February 2022, Anduril acquired Dive Technologies, gaining field‑proven large displacement autonomous underwater vehicles (DIVE‑LD) for undersea sensing and ISR missions.
In September 2023, Anduril added Blue Force Technologies, the company behind the “Fury” Group 5 unmanned fighter‑class aircraft, expanding into high-performance aerial platforms.
Each acquisition gave Anduril proven hardware or domain expertise, unlocking full-spectrum integration across air, sea, and land.
Saronic is using M&A as a fast path to scale maritime autonomy:
In April 2025, Saronic acquired Gulf Craft, a Louisiana-based shipbuilder, securing a 100-acre shipyard to prototype and manufacture its next-generation medium USVs like the Marauder MUSV.
That acquisition turned a capability gap into a strategic advantage, enabling near-term delivery on Navy demand and building out industrial-scale vessel production.
Why Not Just Use Private Equity?
In short, Hard Tech startups generally aren’t ready for PE in the early days.
Early-stage Hard Tech = invention, ambiguity, and technical uncertainty. That’s not PE’s sweet spot. Venture capital is the right early capital source if:
You're funding invention, not optimization.
You need room to explore a wedge, not drive EBITDA.
The upside is unbounded if the wedge becomes a platform.
Founders are domain-native technologists, not operators-for-hire.
Once traction and customer pull are real, M&A becomes a smart next lever. VC gives founders flexibility and speed to act like buyers long before PE even returns your call.
When Is the Right Time?
Earlier than most think. Think about M&A when:
You’re seeing adjacent demands beyond your current wedge
You’ve won or are competing for programs needing new subsystems or domain expertise
You’re selling a system but don’t yet own all components
You’re reliant on external suppliers who could be integrated
Waiting until profitability or “readiness” usually means you’re already too late.
How to Execute It Well
Step 1…hire someone who knows what they’re doing. This isn’t something one can learn on the job. Once you have that person (or persons) in place:
Track targets early: even before you intend to acquire, keep a shortlist of boutique firms, contractors, or technical talent.
Talk to customers: ask which suppliers they trust, they’ll surface targets.
Be creative on structure: use a combo of cash, equity, and earnouts to make deals work before scale.
Plan integration: tech fit is critical, but alignment on people, process, and culture is what makes M&A succeed.
Final Thought
Hard Tech startups are not building components; they’re assembling systems under real time pressure. M&A, when used wisely, compresses time, builds capability depth, and lets you ship complete solutions faster than competitors evaporate your window.
Startups in Hard Tech shouldn’t wait for scale to start thinking like buyers.
In Hard Tech, buying smart is part of building fast.
