Two-Year-Old RI-Based Vatn Raises $60M Series A Round - Expects Major Growth in 2026

Two-Year-Old RI-Based Vatn Raises $60M Series A Round - Expects Major Growth in 2026

Portsmouth-based Vatn Systems, the defense technology company building autonomous underwater vehicles (AUVs) for the United States military, allied nations, and commercial customers, announced on Wednesday that it has closed $60 million in Series A funding, bringing total capital raised to date to $76.5 million.

In November of 2024, the company raised $13 million in its seed round. Since then, it has been all growth.

The AUV industry is red hot due in part to the need for advanced military and research equipment. Founded in 2023 by a team of maritime experts and military leaders, Vatn Systems is on a mission to be the next underwater defense prime in a world where autonomous systems dominate the naval battlespace.

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The company is led, in part, by Nelson and Freddie Mills — both of whom live in Rhode Island and grew up in upstate New York. The third cofounder is Barrington-native Geoff Manchester, the company's chief technology officer.

"Vatn Systems is on a mission to become the next underwater defense prime in a world where autonomous systems dominate the naval battlespace," said Nelson Mills, co-founder and CEO of Vatn Systems. "Demand for affordable, scalable autonomous systems in undersea environments is accelerating rapidly. This funding strengthens our position as the leader in deployable AUV technology and enables us to expand our team, accelerate R&D, and scale manufacturing to capture this growing demand and win critical contracts both domestically and internationally."

Nelson believes that by the end of 2026, the company will be producing tens of thousands of AUVs.

 

Growth in Rhode Island and Increasing the Work Force

Currently, Vatn employs about 65 people — predominantly designers and engineers. Nelson Mills said by the end of Q1, the number will jump to 80 employees and continue to grow.

“About 30% of our team has moved to Rhode Island, but the majority are Brown and URI grads who could be working anywhere but wanted to be a part of our team,” said Nelson Mills.

Freddie Mills, Vatn’s chief operating officer, told GoLocal, “There is an advantage to doing business in Rhode Island as it allows you to build a community with government and other businesses to drive growth“.

“We do a lot of manufacturing, and we utilize a lot of smaller companies — composite shops and machinists,” Freddie Mills added.

 

Tech, Tech, Tech

Vatn’s AUVs can be deployed at scale.

“This is the future. Understand that to fight a future conflict, you need AUVs,”  added Nelson Mills.

Vatn's flagship products include the Skelmir S6 compact modular underwater effector and the Skelmir S12, a 12.75-inch diameter platform that merges the capabilities of a traditional AUV with the agility and performance of a lightweight torpedo, designed to attrit threats, deploy sensors and decoys, and support electronic warfare missions at scale. Both vehicles are powered by INStinct, Vatn's proprietary inertial navigation system that delivers precise, GPS-free navigation in harsh maritime environments at a fraction of the cost of traditional systems.

Vatn has three patents and is developing additional IP.

 

Investment

Significant private equity and defense industry firms are betting on Vatn.

"Vatn Systems has built a significant competitive moat in the AUV market through their advanced navigation technology, modular platform, and scalable manufacturing approach," said Joe Musselman, Managing Partner at BVVC, one of the lead investors. "Rarely have we seen a company execute with this speed and precision to achieve these growth rates in just two years. Their ability to deliver affordable, multi-mission systems at scale addresses a critical capability gap, and we're proud to lead what we believe is the largest funding round in the AUV space."

The Series A announcement follows significant momentum for Vatn Systems, including the company's first international contract win in Singapore. The company continues to deepen partnerships with the U.S. Navy and Marine Corps while expanding its global customer base.

This latest round was led by BVVC, with participation from new investors such as Hanwha, Geodesic Capital, Airbus Ventures, Dauntless Ventures, Trousdale Ventures, and Veteran Ventures Capital. Major existing investors also participated in the round, including DYNE Ventures, Propeller Ventures, Decisive Point Ventures, SAIC Ventures, Centre Street Partners, Cubit Capital, and Lockheed Martin Ventures.