Saronic wins Navy contract as it prepares to break ground on Port Alpha shipyard

Joining me now, Adina Mevrukas, the CEO and co-founder of Seraphic. Adina, it's great to speak with you. Huge milestone moment for the company as you break ground on Port Alpha. What does this entail? What does it enable? >> That's right. We're so excited to formally break ground. I mean, it is it is just time to build. What this enables is the return of American shipbuilding. I mean, the return of American jobs as well. We're going to create 10,000 jobs, direct shipbuilding jobs over the next 10 years. And Port Alpha is going to be the most advanced, most efficient, highest throughput shipyard, not just in the country, but really in the world. This is how you bring American shipbuilding back at scale. This is how you build net new shipbuilding capacity. And just to give you a sense of size, we are we are starting with 835 acres. I know that's hard to visualize, but our first phase is going to be the largest shipyard in the country. And we have the room to expand to up to 4,400 acres. This is one of the most critical industries in the country, or in the world rather, and we're just so excited to be breaking ground today and to mark the significance of this moment. We're actually going to be joined by the Vice President of the United States and the governor of Texas. >> I mean, we've seen American shipbuilding hollowed out over the years. It's not the industry it once was. You and I have had those conversations before. So, what is it about Port Alpha and how you're going to construct this factory, this shipyard, that's going to make it economical and make it and make sense in terms of this idea of reindustrialization and American shipbuilding again? >> Well, it's it's exactly what you said, right? The American shipbuilding industry has been hollowed out. There is lack of supply chain, there is lack of workforce, and you really have to start with the manufacturing process itself. How do you build the manufacturing machine again that goes and builds the machines? And then how do you do that in a software and autonomous first approach so that you're actually able to redesign the ships from the ground up to make them simpler and easier to build, to do a design for manufacturability. And then at Port Alpha, we are going to take a complete greenfield design. We are designing a shipyard from the ground up to layer in efficiencies of material movements, to leverage not only autonomy in our products, but autonomy in the actual building of our products as well to drive scale and drive down costs. And that's just not done in shipyards today, and it's certainly not done in shipyards in the United States. >> So when will Port Alpha start turning out ships, and what type of ships are we talking about? >> Well, it's going to start building very, very quickly. We're going to be operational by the end of 2027 with our first ships off the line in 2028. We're going to be able to build up to 850-ft ships, and then eventually up to 1200-ft ships. We're talking about the largest commercial vessels in the world. That's what Port Alpha is really going to support. The The We actually already have um our first contracts for Port Alpha as well, building landing craft utility vessels for the Navy. So we're going to be building those as our first vessels and then scaling up very, very quickly. >> Yeah, and I I want to get into the military piece of this in just a moment, but one more question on Port Alpha. How much of this will be dedicated over the long-term to military shipbuilding? How are you thinking about commercial shipbuilding as well? >> So very much dual-use company from the start. We think about defense and commercial as symbiotic relationships, not mutually exclusive. Building for the commercial market is actually how you have surge capacity online in the event that the military needs to build more in times of conflict. If you look at what China is doing and we've talked a lot about the shipbuilding industry in China and as the US industry has hollowed out, the Chinese have invested very heavily. Where they really exceed, not just the United States, but the rest of the world, is in the commercial shipbuilding space. They built 1,400 commercial vessels in 2024. The United States built five. Um they have upwards of 60% and it's actually been recently reported that they've taken over 80% of the global commercial order book. So, what that means is in times of conflict, they just have more raw production capacity than anybody else. That's why the commercial market is so important. That's how you build robust and resilient supply chains. That's how you rebuild the workforce. Um and that's what existed in the United States prior and that's what we're going to bring back. >> Yeah. Um it's already been a big a big year for Saronic. Uh it was confirmed by the US government that it was your Corsair that was involved in that rescue operation for a downed Apache helicopter in the Middle East at the beginning of the summer. Uh CENTCOM also confirming that Corsairs were the vessels that were used uh to strike an Iranian naval facility uh in the first what's being called the first-ever combat use of lethal sea drones by the US as well. What can you share about the capabilities and the lessons that are being learned in real time in that conflict? >> I mean it really is what you said, the focus on the mission, right? Saronic is focused on the mission and delivering real capabilities to warfighters as fast as possible since the day we started the company. And that's that's exactly what we're doing with Corsair. Corsair is a 24-ft fully autonomous speedboat with the most advanced software and autonomy really really in the world. Um and that's what's delivering capability as well as the manufacturability that we have here in Austin. So at our headquarters in Austin where we build Corsair, we can actually build thousands of vessels every single year. We've delivered hundreds of vessels to the Navy. So really learning about how do you integrate these vessels into the fleet? How do you change the way that the Navy and the military operate with autonomy first products um and delivering real real capabilities in conflict environments. >> When we talk we talk so much about the advent of drone warfare, I think a lot of folks they think about that from from an air standpoint, but to your point it's also happening on the water in real time, too. So So how are you changing those operations and what are you learning as your vessels are being deployed? >> Well, I I I obviously can't get into too many specifics of real-world operations, but what I will tell you is the most important learning that we we have is the importance of working with the military, working with the Navy, working alongside them, seeing what's happening, and then having the ability to iterate. Not just in software, but in hardware. The speed of iteration is what's going to determine if the United States stays ahead of our adversaries or not. So we're updating software almost daily. We're updating hardware in terms of integrations and payloads and new designs weekly or monthly or as the mission demands. So it's that speed of iteration and working with the Navy in real time and adapting to the to the missions and the use cases that they're trying to employ them on. >> Um also news that Saronic is being awarded a new contract by the Navy for your new vessel as well, Marauder. >> That's right. We're we're beyond excited to be awarded a production OT contract for Marotta. This is a 180-ft fully autonomous ship for the MUSV program within the Navy. And when you think about what autonomous ships can provide the military, it's really anything from contested logistics to long-range fires. But what's really significant here is we've designed, built, and launched our ship, Marotta, in under a year. Not just do and not just We didn't just build one. We made a $300 million investment into our shipyard in Franklin, Louisiana, which hosts Marotta production, so that we can scale Marotta into the dozens moving forward per year. >> So, as we talk about all this, whether it's Corsair, whether it's Marotta, how to think about over the longer term your product line, the technology that's going to go into all of that, and um and what that's going to mean again for this broader discussion around American shipbuilding? >> Well, we're we're very much a software and autonomy-first company. What that lets us do is move very very quickly into new hardware platforms, new boats and ships by leveraging the same software and autonomy across those vessels. So, it really comes down to now, do you have the infrastructure to build? Can you build thousands of boats? Can you build hundreds of ships? How large of the sh How large are the ships that you can build? In Franklin, Louisiana, we can build up to 200-ft ships. That's the limit of that shipyard. At Port Alpha, we will ultimately be able to build up to 1,200-ft ships. That opens up the aperture to commercial ships, to cargo containers, to oil tankers, to roll-on/roll-off vessels. These commercial ships are critical are just as critical as the defense warships that we have in our naval fleet if we ever do get into a conflict because you need to be able to resupply your forces. And you see this in the Ships Act for America calling for a strategic commercial fleet. It's critical to be able to build this these types of ships in this country again. And and remember, in 2024, we we only built five of them. >> So, final question for you. Um and maybe and maybe it's not right now, but down the road, how are you thinking about the possibility of an IPO or going public? Are you thinking about it? >> Well, it's certainly something that that we consider. There's no imminent plans for an IPO. You know, we think about what is the best possible outcome for the company. How are we providing the best possible solutions for the country? And truly, I mean that. And if that means an IPO to leverage the capital markets to deliver better capabilities even faster, then that means it's the right time for the company. But we're very fortunate to have world-class investors, some of the top venture capital firms in the country. We've already raised two and a half billion dollars. We have the opportunity to raise more private capital in the future. And so, the rush for an IPO really isn't there, and it's really just figuring out when's the right time for the company and when's the right time for what we're doing for the country. >> All right, Dina Mavrakis of Saronic. Great to speak with you. >> Awesome. Thank you for having me.