We sit down with Jonathan Moneymaker, CEO of BlueHalo, a pioneering force in the national security market. Since its inception in 2020, BlueHalo, under the auspices of Arlington Capital, has emerged as a frontrunner in high-stakes arenas, including Space Superiority, Directed Energy, and Cybersecurity, among others. Jonathan, known for his dynamic leadership and commitment to innovation, has masterfully steered BlueHalo by integrating 13 companies into a unified powerhouse. His approach—marked by a hands-on style and an unyielding passion—has accelerated BlueHalo's growth and disrupted the traditional landscape of defense technology.

In our conversation, we'll dive deep into the strategic moves that propelled BlueHalo to the forefront of the national security market, the challenges of bringing diverse companies into a single culture, and Jonathan's philosophy that drives his desire to affect change and align business goals. This episode is not just for professionals in the defense sector, but also for enthusiasts of cutting-edge technology and those fascinated by the art of leadership. It offers insights into one of the most influential figures in today's defense technology sphere, making it a must-listen for anyone interested in these topics.

Tune in to understand how vision is transformed into impact and how leadership can extend beyond business metrics to inspire and innovate across an entire industry.

Hi, hello, and welcome to Beyond Strategy, an ACG National Capital Region podcast focused on the leaders that drive innovation, enhance understanding, and achieve market clearing outcomes in and around the DC area. I am Andy McEnroe of Raymond James Defense and Government Investment Banking team.

And I am Jenn Wappaus of the Infinity Group at RBC Wealth Management.

Today, we are excited to present to you Jonathan Moneymaker, CEO of BlueHalo. BlueHalo, an Arlington Capital Partners portfolio company, is a purpose-built provider of industry-leading capabilities in the areas of space, counter UAS and autonomous systems, electronic warfare and cyber, and AI/ML capabilities. Since its formation in 2019, BlueHalo is becoming one of the fastest growing and most disruptive companies in the defense technology and national security markets. Jonathan has been the steady hand at the wheel during this tremendous growth with a focus on strategic innovation and finding novel approaches to achieve mission success. He is transforming the role of a traditional prime for the next phase of the global conflict. In our discussion, you will hear Jonathan's perspective on bringing together disparate cultures and building a consistent and coherent narrative around a company that is serving the war fighter.

Having had the opportunity to sit across the merger and acquisition table from Jonathan, what be most impressive is his ability to connect with fellow executives in his articulation of his vision, both within BlueHalo and to the market, and to build a culture that produces incredible organic results and impressive M&A success. Now, here is our discussion with Jonathan Moneymaker.

Well, fans, we're excited I got to tell you that finally, after two years, we've got Jonathan Moneymaker. He was supposed to be guest number one, and here he is finally, Jenn, guest number 12. He's been dodging us for a while.

He's been dodging us.

But we finally tracked him down. Jonathan, thank you for being here. We appreciate your time.

It is great to finally have gotten the invitation in the mail to join you guys. I understand that the previous 11 got lost, but very excited to join. Yeah, absolutely.

That's the same response I have anytime Jenn says, "Oh, yeah, I invited you out to a happy hour." And alas, you see her gallivanting around the Reston town center.

That is so not true.

Any who, let's jump right into it. So this podcast is called Beyond Strategy, and part of what we wanted to talk about two years ago when we first lost the invitation in the mail, was taking our audience back to the beginning. Because one of the cool things that I think about BlueHalo and about what Jonathan and his team have done, is really there was a vision that they enacted, and it started on a napkin or on a piece of paper, and then from there, look where it's at today. So Jonathan, if you don't mind taking our audience back to the beginning and outlining what was the original thesis? Why did you create it? What were you trying to build in the market? And then project out to where you are today, roughly a billion dollars of revenue.

Yeah, it's different. So, yeah, it started about five years ago, and really, it was a partnership with Arlington Capital around wanting to seize an opportunity where we saw a gap in the market that was primarily focused really on two things. One was the fact that we were observing really the rise of pure conflict and the threat of that over the horizon, realizing that our national security posture didn't have, I think, the adequate technologies in the hands of our war fighters to ultimately reestablish that national security posture. What could we do to better outfit our customers and really change the way we deliver to them? The second aspect of that was really around how we interact with our customers. There's been, I think, a growing ecosystem over the last five years that's been, I think, phenomenal for the defense technology base. But really, there's this interesting nexus between the old guard, if you will, the big five within the defense industry base, as well as these new entrants that are largely VC-backed and coming in with great innovation, but lacking some of that ability to either know how to deliver or have that customer industry to know what to deliver.

As we looked at really getting after the nexus of those two elements, really focused on, "All right, hey, if we are going to field capabilities and expertise for our customers in the face of rising peer threat, what does that really need to look like?" So, started building out a core focus on transformation, which is really about fielding capabilities, so not just admiration of research and development, but how do we accelerate that whole life cycle of getting capability in the hands of those that need it, and then what the domains that were most relevant to that peer threat. So a core focus around space technologies, a core focus around counter UAS and autonomous systems, a core focus around electronic warfare and cyber, and then how do we optimize that with a foundational element of artificial intelligence?

Let's talk a little bit about your growth strategy. How has the M&A program reduced dividends or organic growth for you guys?

I often get the question, "Hey, what's your M&A strategy?" My response has been, "We don't have an M&A strategy per se. M&A is a tool that allows us to accelerate our organic strategy. As we knew we wanted to be a leader in the future of space technologies that range from redefining how we conduct operations in space and from space, or we knew we wanted the control position as we launched directed energy into the counter UAS domain. Those were all organic paths at the beginning, but being able to obviously partner with Arlington and have that lever that we can pull where we find opportunities to accelerate our position there, have really been able to welcome various technologies or aspects or control points into the BlueHalo family that really both, I think, helps establish and accelerate where we sit within that broader strategy and then, again, can then revert back to the organic roadmap of how we supercharge that with organic investment to create fully fleshed out products and services for our customers.

I want to come back to M&A and some of the specific acquisitions here in a second, but one quick follow-up there. You're a guy who likes to work out, pliability, the TB12 method is important in terms of being flexible. How much does your strategy have to be pliable to the targets that are available? Or is it the market segments that you mentioned earlier driving where your M&A focus is?

Yes, it's a little bit of both, honestly. As we laid out our original strategy of a focus on the transformation of global defense at large, we set out, the first stage was, let's look at the domains that we want to operate in. Then we subsegment that down into the technologies that are most relevant. We mapped out, I would say, the first three years, really in six-month blocks of, "Hey, these are things, big muscle movements that we need to do as an organization." But to the point around of how much is opportunistic versus how much is scheduled, at that point you have to be flexible. We have to know our core strategy tells us where we are ultimately going to end up, but the order in which we've been able to build things, and especially through the use of M&A, has been subject to what we end up identifying and cultivating ourselves or what folks like you and Rajay are able to bring in the market. That sometimes can influence the order in which we may be executing that strategy, but not necessarily wholesale changing it in any meaningful way.

Coming back to M&A, and I did bring up Tom Brady, because maybe outside the birth of your children or the establishment of BlueHalo, I would argue probably the greatest day in your life was the day the Philadelphia Eagles won the Super Bowl against Tom Brady and the New England Patriots. More recently, with the Philadelphia Eagles, they made a big splash in the acquisition of Saquon Barkley from the rival New York football Giants. Some may say that's analogous to your acquisition of Eqlipse. While not rivals, if you look at it, it's a game-changing asset that it takes BlueHalo from the tier where they're competing against the large primes that you mentioned earlier in our conversation to that same tier. When you think of the acquisition of Eqlipse and your plans for it, you're bringing in nearly 2,400 people across 11 different states now that have a revenue total of, as we mentioned earlier, over a billion. What's the rationale with that acquisition of Saquon first for the Eagles, and then the bringing in of Eqlipse for BlueHalo.

Sure. So we're definitely excited about Saquon joining the Eagles Nation. It's funny that you draw the parallel because there actually are some interesting aspects around Saquon will probably be more productive in Philadelphia, where we have the first ranked offensive line versus the 31st ranked offensive line for the Giants. So in that case, where you're aligning key components or assets where they can thrive the best. So as we look across all of our acquisitions, and certainly most recently with Eqlipse, really identifying where those aspects of alignment are going to thrive the most has been a very exciting picture to come into focus for us. We obviously had a lot of connectivity with Eqlipse. Myself and my CFO, Robert Richard, served on the board of Eqlipse, helped guide the construction over the 18 months. Really, that rationale, I think, boiled down to three major prongs. First was really just the doubling down collectively of both Eqlipse and BlueHalo cyber and SIGINT strategy and franchises. We are now, I think, solidly positioned within the cyber and SIGINT domain as the alternative prime for our customers, which is, I think, very exciting of how we serve that community with both expertise as well as foundationally changing technology, getting into [inaudible 00:11:38] and exploitation and all sorts of interesting missionaries.

The second area of alignment and thriving that we're seeing is the combination of both companies' AFRL franchises. That's possibly one core to our strategy of, "Hey, we have a large focus around emerging technologies and how we engage with our customers' R&D arms." But whether it's alignment around the future of human performance or advanced photonics or advanced propulsion or material sciences, a lot of direct alignment between Eqlipse's presence in Dayton out at Right Pat, servicing AFRL, and BlueHalo's leading position with AFRL out in Albuquerque, where we serve the Directed Energy and Space Vehicles Directorate.

So a lot of really nice synergy across that part of the portfolio as well. I'd say the third and certainly equal on the excitement meter, is the incorporation of our electronic warfare capability into the broader platforms at BlueHalo. Like I said, we're very deliberate about our strategy. We meet once a year and update that through year view, making sure that we're always adapting as all good businesses do. One of the core areas of future roadmap for us was expanding into various payloads, so think multi-domain payloads. I think the electronic warfare, chassis, flexibility, and capacity within there is going to foster a lot of disproportionate growth with how we're looking at the market.

We're really excited. I got a chance to go out and meet all 842 Eqlipse employees as we did our roadshow, which again, I think is just something personally important to me as well as our leadership team, to be able to first-hand welcome them in, get them excited about what we're doing and share the bigger picture.

Let's move away from M&A for a moment and talk about people. People are often described as the most important part of any organization. Many companies tout their people-first culture, but how can you tell which companies are actually living it?

That is a critically important question, and probably similar to a lot of folks in our market, our first core value is people first. We have that book ended with Mission Always on the other side. I think different than a lot of folks in our market, we put a tremendous amount of emphasis around living those values, and we actually launched a set of core values at this point, I guess a couple of years ago, and got the question during our all hands around specific examples. While we were able to draw pretty easily of an example of people first or example of authenticity or decision velocity or mission always, which are some of our core values, what we did was instantiate every Monday during my staff meeting, we actually rotate around the leadership team where someone shares an example of living our values. It's the first chart that flashes up, and it could be a big example, it could be a little tiny observation that someone saw, it could be treating others with respect that they saw in an email or in a meeting, or it could be a bigger, heavier example around decision velocity and innovating our competition.

But I think being able to institutionalize those values into the organization and share living examples of what we mean by that, brings to life from not just being words on a poster or words on a wall, but really go into our decision-making, our services, foundations for how we lead and drive the organization at large.

Speaking of how you drive the organization and how you build an organization, needless to say, five years ago, BlueHalo didn't exist. How do you start with something that was individual companies brought together around a common strategy and create a marketing plan around it that now has you plastered throughout Capital One Arena and known nationally as a brand?

I'm going to take the plastering as a compliment.

It is. You go to a game, and I'm like, "There's Jonathan in the company. That's great."

But more importantly, it's interesting. Actually, you got to remember, we came into the market under the cover of COVID. It was actually a pretty fascinating time to be launching a new platform, certainly with big audacious goals of how we were going to transform this new defense technology market. As we started really building momentum on the strategy, I think it was very meaningful to put the effort into what we call ourselves and what's our designed goal. It needs to be as important and meaningful as the purpose-built aspect of what we're doing for the company itself. I think it being rooted in purpose is the core aspect. Again, BlueHalo, we are a ring of protection around everything we care about most. Then getting employees excited about that and driving brand adoption. As we came out of COVID, and started to experience, I'd say, outsized results relative to growth, we certainly garnered the attention of both the competitive landscape, but also presented the opportunity for us to expand that brand more nationally. Now, as we sit here five years into it and having been successful with the certainly initial thesis and now crafted what we look like for the next five years, that, I think, national awareness on not only what we do, but the characteristics that make us successful, I think, are really important.

If and when we have the opportunity to transition to a public market, that's, again, we'll benefit from that brand awareness of knowing that not only are we the new disruptive, innovative entrant into the defense technology space, but giving people some, again, real examples of what it looks like or what it means to be part of BlueHalo, both from a prospective employee or certainly down to the individual investor level.

One thing I've been impressed with, and not to put words in your mouth, but would love to hear your thoughts around this, is that new brand, that forward vision, as you described it, had to have been helpful in also bringing together various cultures and different locations because it wasn't an M&A strategy of one company buying another, it was essentially joining forces around the common goal and vision that you were articulating before. How did you articulate that message to individuals that were joining either organically or joining via inorganic measures? Because I think that's a lesson that a lot of our audience will want to better understand if they're embarking on both organic and organic growth strategies.

Yeah. I mean, the power of alignment is not to be underestimated. I've always said, if you don't know where you're going, any road will get you there. When you're talking with, whether it's potential acquisitions or, again, prospective employees, being able to articulate and communicate that future state, that future vision, where they see how they directly plug into that and can help accelerate it and, frankly, inform it, I think is very important. It's not just a financial model or an opportunistic acquisition strategy. I think being rooted in a purpose and having a well-defined strategy, frankly, will keep you moving in the right direction, allow you to operate with speed, can prevent strategic drift. At times, we look at assets out in the market today. It's tough to articulate exactly what they are, what they do, where they're going. They may have an interesting financial profile, but lack some of that core purpose. I think also it's important to understand that we operate in the national security and defense technology space, and that's a passion. I think linking your strategy to what gets you up in the morning is really interesting, and I think important and exciting.

I always say we don't write insurance software, we don't make tosters. Those are fantastic lines of business, but what we do is rooted in purpose. When you can articulate where the entirety of the organization is going, people get real excited about being able to put their ore in the water and help help the organization get there.

What plans do you have for BlueHalo moving forward? Will you continue to be aggressive in the acquisition game, or are you looking towards public markets? You mentioned that. Where is the organic growth focus currently?

Yeah. So we'll probably be doing both from an acquisition standpoint as well as organic and certainly the eye towards public markets. We have great financial backers, and we have access to capital. Part of the reason from a branding standpoint that we also do so much is we don't have to go out and raise capital and get after round, after round because we have what we need, which is great. But I think that allows us to push forward. As we look at a future, we'll continue to execute our strategy. Andy, you mentioned It started with a napkin and a whiteboard. We often tell a story around now as we represent the company, all of the aspects that we talk about were originally on that whiteboard, but there are still things that are on that whiteboard that aren't yet part of the company, and I think we're going to continue to accelerate and find the right aspects of entering into those markets. As we look at maybe a future of being part of the public domain, that really started, I'd say, about 18 months ago. We thought to ourselves, we started this five years ago with a big audacious goal, we thought if we were reasonably successful, that this might be something that deserved to endure on a public market.

As we looked 18 months ago, we had really achieved something, I think, special. We got feedback from our customers, from our employees that they are enjoying being part of something that is so dynamic and so impactful. About 18 months ago, we started putting in internal efforts for IPO readiness.

We've made great strides on that. I think we'll be ready from an internal perspective, probably by the end of this year is the internal goal. Then we'll start to evaluate external. When those two readiness meters of external and internal align, we'll have great opportunities to explore those types of options, but until then, the company continues to grow. Currently, at outsized rates, enjoy strong double-digit growth. It's certainly highly profitable, highly successful. It allows us to continue to invest in the next generation of future technologies. So the future is certainly very bright.

As we progress towards the end of our time together in this conversation, what's one lesson that your career progression has taught you that you think everyone should learn at some point during their life?

I touched on a little earlier, but I think that... Honestly, I think recognizing the power of strategic alignment, whether that's someone in my role that's driving a corporate strategy, or it could be individual support areas, it could be individual programs, but if everyone is aligned on the objective, the benefits really are logarithmic in how they come to realization. I think that strategic focus then allows you the space to be able to listen. As you listen, that frankly helps inform how you drive and update any of that alignment. Then just the power of authenticity and transparency. I think that is, unfortunately, something that has been diminished over years. I think it's been very exciting to see how our leaders across the board of BlueHalo lead with both authenticity, transparency, and alignment top to bottom. Again, that, I think, has been one of the drivers of our success.

So we end all of our interviews with maybe the most imperative question that we ask all the guests, what is the most important thing that we should know about Jonathan Moneymaker?

Probably the least interesting answer, maybe, but I'm not sure there's really anything worth highlighting of note, but maybe I'd take the opportunity to just say thanks to the thousands of the BlueHalo employees out there that are getting after it every day, that are making a difference as we deliver generationally important technologies and expertise. We couldn't have done this and be doing this without them. So just incredibly proud to be able to be at the helm and very excited for what we have over the horizon.

Well, Halo nation, Beyond Strategy nation, we tried to do interview in one of Jonathan's famed early morning workout sessions. We'll have to save that for the follow-up, but nonetheless, Jonathan Moneymaker, CEO of BlueHalo, thank you for joining us today.

Andy, Jenn, it's been a pleasure. Looking forward to the next time, and stay well out there.

Special thanks to Jonathan Moneymaker, CEO of BlueHalo, for joining us on this episode of Beyond Strategy, an ACG National Capital Region podcast. If you liked this episode, I hope you'll subscribe, and you can do that, how you may ask, by going and clicking the subscribe button on wherever you get your podcasts from. I happen to get mine from Spotify, Jenn.

I do, too.

Well, thank you to you, the listener, for joining us today on Beyond Strategy. I hope you enjoyed what Jonathan had to say about the development of BlueHalo. It's truly an outstanding story of smart capital from Arlington Capital Partners, teamed with dynamic leadership coming from both Jonathan and the rest of his team to bring together the right attributes to create a differentiated national security technology and solutions player. I'm excited to see where BlueHalo goes from here, but for now, I must say so long. For Jenn Wappaus, I am Andy McEnroe. I hope you will join us on our next episode of ACG National Capital's Beyond Strategy.