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February 5, 2024 Startups, Technology & Innovation

Led by former U.S. submarine force commander, Groton’s ThayerMahan at forefront of autonomous maritime surveillance technology

PHOTO | CONTRIBUTED Gov. Ned Lamont (right) listens as Michael Connor, chairman and CEO of ThayerMahan, explains a chart in the company’s Operations Center in Groton in November.
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In the hit film, “Top Gun: Maverick,” grumpy Rear Adm. Chester “Hammer” Cain (portrayed by Ed Harris) tells Capt. Pete “Maverick” Mitchell (Tom Cruise) that remote-controlled aircraft will make fighter pilots obsolete.

“The future is coming, and you’re not in it,” Cain states flatly.

Maverick acknowledges that opinion, but only to a point. “Maybe so, sir,” he replies, “But not today.”

While most Navy pilots likely feel the same way, Michael Connor — a retired Navy vice admiral and former commander of U.S. submarine forces — not only recognizes the inevitability of remote-controlled systems, he understands the need for them.

After retiring from the Navy in 2015, Connor teamed with Navy veteran Richard Jude Hine and innovator John Kao one year later to form ThayerMahan Inc., a Groton-based developer of autonomous maritime surveillance technology.

Michael Connor
Richard Hine
John Kao

Eight years later, the company is thriving. It recently secured $20 million in funding from private investors, while its annual revenues approach $100 million.

ThayerMahan’s technology includes two autonomous maritime sensing systems, called Outpost and SeaWatch, that have both military and commercial uses in detecting in detail what is below the ocean’s surface.

“I was a submariner for 35 years,” Connor said during a recent interview with the Hartford Business Journal, adding that over those years he became frustrated with the military’s “slow rate of adoption of unmanned and remote autonomous systems.”

A ‘Silicon Valley’ approach

During his time as U.S. submarine force commander, Connor grew to believe the Navy needed to delve deeper into developing remote-automated capabilities because of the rising cost of building ships and subs.

He also was aware, he said, of “the new opportunities that were becoming available due to the creation of low-power electronics, cloud-sharing technology, satellite communications and sensing technology.”

Despite strongly advocating for it, he had only moderate success in convincing the military to divert money toward developing remote-maritime systems. He had no success in persuading private defense contractors to invest in research and development for them.

So, he decided that “the only way we could move far enough, fast enough to adopt a more ‘Silicon Valley’ approach,” was to form a company with private investors and “use private capital to do what public organizations would not do fast enough to support our national security.”

Connor is ThayerMahan’s CEO and chairman, while Hine is the president of offshore energy.

‘Not the only way to do it’

ThayerMahan — named for Alfred Thayer Mahan, a 19th-century Naval officer, historian and strategist — started with a national security focus.

“Our early customers were primarily national defense customers,” Connor said.

Still, convincing those clients wasn’t easy, he said. While the Air Force has fully integrated unmanned drones, it was more difficult to persuade admirals that the way they had done things their entire military career “is not the only way to do it,” he said. “That’s a tough argument.”

Nonetheless, ThayerMahan succeeded. The company lists the U.S. Office of Naval Research, U.S. Southern Command, U.S. Coast Guard, and U.S. Customs and Border Protection among its Department of Defense clients.

It has won two Defense Department contracts, each worth more than $19 million, to “develop innovative autonomous systems” and to improve ThayerMahan’s “proprietary acoustic and electronic search systems, in support of Navy and Marine Corps missions.”

Connor said most of the systems it produces are acoustic monitoring products. The components are provided by numerous suppliers, he said. “We don’t try to build every component ourselves.”

Instead, ThayerMahan engineers the design and related software, “and then we do the final system integration,” he said, which can include setting up the systems to communicate via satellites.

“Managing software and user interfaces in a cloud environment is a big part of what we do,” Connor said.

Into the wind

While serving the military was the impetus for creating the company, ThayerMahan has evolved to serve commercial clients as well, particularly in the offshore wind turbine industry.

The company, which in October 2017 officially opened its Groton headquarters — just 2 miles east of submarine manufacturer General Dynamics Electric Boat — discovered that its location in southeastern Connecticut put it close to “the epicenter of U.S. offshore wind,” Connor said.

The wind power industry was pioneered by large European developers that had won contracts in the U.S., in part by agreeing to use local suppliers and labor, he said. Despite that, when Connor attended industry conferences, he consistently heard complaints that “there’s no U.S. talent for this sort of work,” which often includes being offshore and underwater.

“A significant part of our staff comes from a Coast Guard background. Others are from the shipbuilding industry around here,” Connor said. “There’s plenty of relevant talent in New England.”

So, ThayerMahan began competing for nonmilitary projects that include providing underwater noise-mitigation services to protect sea life during the construction of offshore wind turbines. The company also can locate and remove unexploded bombs that were left behind during World War II — both during naval training exercises and by German subs that patrolled the East Coast — where wind farms are now being developed.

Other nonmilitary services include delivering a wide range of undersea detection and security using underwater acoustics, artificial intelligence and remotely piloted systems.

ThayerMahan staff work in the company’s Operations Center in Groton.

Major commercial customers include U.S.-based Vineyard Wind and Dominion Energy, which owns the Millstone nuclear plant in Waterford; Deme Group, a leading offshore energy and marine infrastructure contractor, and Jan De Nul Group, another maritime infrastructure company, both based in Belgium; and Danish multinational energy company Ørsted.

When Ørsted signed a memorandum of understanding with ThayerMahan in January 2020, Ørsted U.S. CEO Thomas Brostrøm praised the Groton firm.

“When we started looking at growing the offshore wind industry in Connecticut, one of the most important factors was ensuring we are setting up in an area with some of the best innovators and most skilled workforce in the world,” Brostrøm said. “... The people at ThayerMahan are remarkable inventors, and their technology will help us reduce any disruption offshore wind might have on North Atlantic marine life and the local fishing fleets.”

Revenue streams

The variety and quality of work has impressed private equity investors, which have contributed a total of $50 million in two funding rounds, including $20 million last month in Series C funding led by Hanwha Asset Management.

ThayerMahan has grown into a company with additional locations in Norfolk and Virginia Beach, Virginia; Washington, D.C.; and Massachusetts.

It has 165 employees, nearly 50% of whom are veterans, Connor said, adding that the company relies “on a bunch of super smart young people who tend to be age 30, plus or minus five years.”

The company has also grown its revenue, he said, noting that while the books have not been closed on 2023, the expectation is for gross revenue of $100 million, “plus or minus $4 million.”

“We expect to grow about 30% per year for the next three years,” Connor said. From 2022 to 2023, ThayerMahan’s annual revenues grew from $23.5 million to $100 million, a nearly 326% jump.

The company projects revenue of between $130 million to $150 million for 2024, he added.

“We expect to continue to hire, and we have openings for engineers and … for people who work as technicians at sea,” Connor said. The company also has openings for administrative positions in its legal and finance departments.

ThayerMahan just signed long-term leases on two additional portions of its building on Leonard Drive in the Groton Airport Industrial Park, doubling its footprint.

Connor said there are opportunities for growth on both the military and commercial sides of the business.

He cited higher interest rates and less government support for reducing carbon dioxide emissions as potential headwinds.

“The wind side has grown quickly in the last year,” Connor said. “We thought we were going to triple our wind work between 2023 and 2024, but I don’t think we will. We might double it, … and if we only double it, we won’t be disappointed.”

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