These vehicles enable us to get the warfighter further from danger.”

Nelson Mills, co-founder and CEO, Vatn Systems

PORTSMOUTH — Things are getting cramped inside the 2,400-square-foot workspace nestled within the Melville Marina District on the town’s west side, where a team of engineers is working on cutting-edge technology designed to keep U.S. military personnel and their allies out of harm’s way.

Vatn Systems, which produces low-cost autonomous underwater vehicles (AUV) primarily for defense purposes, was founded only last year but has already outgrown this building on Maritime Drive. Business is booming, and the company expects even bigger things in the near future.

Last week the defense technology company announced it has raised an oversubscribed $13 million seed round, bringing total funding to $16.5 million. The round was led by DYNE Ventures with participation from Lockheed Martin Ventures, RTX Ventures, In-Q-Tel (IQT), Propeller Ventures, SAIC Ventures, Cubit Capital, Fortitude Ventures and existing investors that include Centre Street Partners, The Veteran Fund, Blue Collective, and Decisive Point.

“That’s going to allow us to further expand the team here,” said co-founder and CEO Nelson Mills. “We’re currently 18 people and we’re to going to be 21. All but two are based in Rhode Island. With this next round, by early next year we expect to be 25 to 30 and by the end of next year, if we hit our targets, we could be 40-plus.”

The extra funding will also make it possible for Vatn, which has maxed out its Portsmouth space, to move into a state-of-the-art manufacturing facility in Unity Park on Wood Street in Bristol.

“We’re moving in December and we will have 9,000 square feet of office and 9,000 square feet of manufacturing space there,” said Mills, adding the company will bring its AUVs to market in 2025. (Vatn also hopes to retain its Portsmouth location, which offers the advantage of being close to the ocean, thereby enabling underwater testing, for as long as feasible.)

What are they?

“It’s an underwater drone,” Mills said of the AUVs that Vatn makes. “It doesn’t require any direction or control from a human; it’s got a completely custom-built autonomy system. So when you put it in the water, it steers itself and makes its own decisions. That’s really important, because once you go under water, you can’t really communicate with it, you can’t really get GPS. The core of what we built is our navigational algorithms, so what do you do when you no longer have GPS under water? How do you steer? So, that’s all in house.”

Vatn’s AUVs have a range of nearly 1,000 miles, but they don’t carry weapons. Their main mission, rather, is to keep military personnel safe. 

“These vehicles enable us to get the warfighter further from danger,” said Mills. “So instead of sending in a diver, this can do a lot of the same stuff. It just gets him further back from danger. That’s the ultimate goal.”

It’s also important that the AUVs, which are about 5 feet, 8 inches long and six inches in diameter, are low cost. Mills said the high price point of drones used in Afghanistan and Iraq in the past meant that military personnel would often try to retrieve those vehicles if something went wrong. These cheaper drones aren’t worth getting someone hurt over, he said.

“Recovery is another aspect of that danger,” said Mills. “These are a fraction of the price of existing options. They’re 100-percent reusable, but they’re also cheap enough that they’re expendable.”

It’s also easy to train people to control Vatn’s vehicles, which currently maintain speeds of 7-8 knots but will soon be able to reach 20-plus knots, according to Mills. “You’re doing all the mission planning, and then you send it out and it just conducts the mission. If it encounters an obstacle or picks up a targeting signal, it will make decisions to change the mission plan. Technically, it’s artificial intelligence (AI); it’s using Machine Learning,” he said.

The vehicles contain a variety of different sensors, such as sonar. A group of AUVs can work together in a coordinated manner, called “swarming.” Each vehicle has a modular interface based on the customers’ specific needs. “Sometimes we’re involved in that integration, sometimes we won’t be,” Mills said.

How it all started

Mills, 34, is originally from upstate New York, but spent a lot of time in Rhode Island as a child.

“My parents were big sailors and I grew up homeschooled on a sailboat in the Caribbean. We kept our boat at NEB (New England Boatworks) every summer when I was a kid. We did the opposite of most people: Boat on the harbor in the summer, and sail away in the winter,” he said.

After high school he was an undergrad at Columbia University and earned a Ph.D. in political science in Ireland. “I realized that wasn’t for me; I wanted to be a little more hands-on in the world, so I ended up in a startup space building a software company, and then I got into the maritime world.”

After a few more business ventures and going back to Columbia for his MBA, he founded Vatn in 2023 along with his brother, Freddie Mills, its chief operating officer. Dan Hendrix, chief revenue officer, and Geoff Manchester of Barrington, chief technology officer, round out the executive team.

Manchester said the company grew fast. “It quickly went from an idea to a feasibility study, then fundraising and then, yeah, it’s real,” he said.

He’s looking forward to even more growth that lies ahead. “The move to Bristol is a really exciting moment because we can jump right into manufacturing. We’ll all be further away from each other,” he said, referring to the current shoulder-to-shoulder atmosphere in Portsmouth, “but it will be great.”

Mills is also excited for the future — and proud of Vatn Systems’ calling.

“This was a great mission because to us, people weren’t doing enough to protect the warfighter,” he said.

For more information about Vatn Systems, visit www.vatnsystems.com.