Liquid Instruments Lands $28.5M

For Liquid Instruments CEO Daniel Shaddock, a recent $28.5 million Series B round means more than just funding, it represents a change in the “terrible timing” the company has had the last few years.

First, the test and measurement platform company’s product development efforts were hampered by tough COVID lockdowns at Liquid Instruments’ R&D facility in Canberra, Australia. Then the company set out to scale up production during the “largest supply chain crisis in living memory.”

“And then we started fundraising in January – just as the S&P started to get the wobbles,” Shaddock said. “But I think that despite those challenges we’re still successful is really important.”

Shaddock is not alone in that thinking. The $28.5 million funding round led by Acorn Capital also includes existing investors Spirit Super/ANU Connect Ventures, MA Growth Ventures, Significant Capital Ventures and Bowman Enterprises as well as participation from new investors Powerhouse Ventures and Lockheed Martin Ventures. 

“Liquid Instruments is creating a versatile test and measurement platform that is customizable and  efficient,” said Chris Moran, vice president and general manager of Lockheed Martin Ventures. “This technology has the potential to deliver mission critical functionality that can provide value to our customer. We are excited by Liquid’s continued growth and look forward to strengthening our collaboration.”

The latest round brings Liquid Instruments’ total funding to around $50 million, adding to previous funding from a convertible note financing and an $8 million Series A round led by San Diego-based Anzu Partners, who convinced the Solana Beach-based Liquid Instruments early on to headquarter in the San Diego region.

Disrupting a Staid Industry 

The new funding follows a 4X year-over-year sales increase in Liquid Instruments products, driven by demand for Moku:Pro and Moku:Go – new instruments used by engineers in research, education and government labs, as well as industrial segments such as aerospace, defense, semiconductor, LiDAR and quantum computing.

“This is the equipment that scientists and engineers use to create technology. I like to think of it as the technology that creates technology,” Shaddock said and pointed out that recent customers included engineers at Apple working on camera modules, Google engineers working on free space optics technology and NIST engineers working on optical levitation techniques.

“And we have a guy who is using one of our earlier products to measure the degradation of paint in the Sistine Chapel,” he added.

Shaddock said that while the test and measurements industry represents an over $20 billion a year industry that also underpins trillions of dollars of development in other technology industries, raising funds is a challenge compared to less “boring sounding” companies fundraising for technologies like quantum computing or autonomous vehicles.

“But one of the advantages for us is that it was a staid old industry that was started when Hewlett-Packard began making oscilloscopes in the 1950s,” he said. “It’s actually an industry that’s ripe for disruption in reimagining how technology works and how users interact with it.”

Product Development 

Liquid Instruments offers three hardware types powered by Field Programmable Gate Arrays  (FPGAs), chips that allow each instrument to offer various engineering instruments from downloadable software.

The technology for the Moku devices was first developed by Shaddock at the Jet Propulsion Lab for the Gravity Recovery and Climate Experiment Follow-on (GRACE-FO) mission.

“When we had that technology, we thought, ‘You know, we can use this technology and if somebody built this thing, I would buy it,’” he said.

Liquid Instruments’ early products were useful for engineers in lasers, optics and other advanced fields, like Shaddock and the JPL team that first built the tech. With the new funding, Shaddock hopes to further expand Liquid Instruments’ reach into other markets.

“What this funding will allow us to do is really grow out of that fairly niche area of high-end R&D into the much larger industrial space,” he said.

The company has also set its eyes on the roughly 5 million students in undergraduate engineering programs around the world and scaling up production of its more affordable units.

“It’s a pretty sizeable market opportunity and we think they deserve better than what they’re getting now,” Shaddock said.

Liquid Instruments is also going to invest some of the funds toward cloud computing R&D that will allow for quick edge computing capabilities in Moku devices, including the capability for engineers to create their own instruments.

“It’s kind of like a studio where you don’t have to wait for our own engineers to build the next instrument and release it by a software update, you can build it yourself,” Shaddock said.

Acorn Capital CEO Robert Routley said his investment group sees “tremendous potential” for Liquid Instruments’ platform to grow and evolve to meet the needs of many industries over time.

“Liquid Instruments’ Australian-developed software-defined approach is the manifestation of an ambitious plan targeting a vital market that has suffered from a deficit of innovation and imagination,” he said. “Liquid Instruments is well positioned to execute on its expansion strategy and disrupt the test and measurement sector and lead the industry through the much-needed transition from hardware to software.”

Liquid Instruments
Founded: 2014
CEO: Daniel Shaddock
Business: Manufacturer of tests and measurements hardware and software
Headquarters: Solana Beach
Revenue: $50 million in capital raised
Employees: 60 worldwide, 25 in U.S.
Website: liquidinstruments.com
Notable: Liquid Instruments’ tech was first developed at the Jet Propulsion Lab.