Why Aerospace and Hard Tech Startups Are Flocking to Southern California
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Aerospace and defense firms are flocking to Southern California for innovation and culture, say out-of-state (and country) newcomers
The 21st century Gold Rush is underway and its epicenter is the South Bay region of Southern California. Instead of gold, these modern-day prospectors are turning metals, plastics and other minerals into the next generation of aerospace and defense products that serve humanity’s extraterrestrial economy.
“We looked at all of the states and we chose California for a few reasons. Los Angeles is full of companies that produce hardware like satellites and rockets. It’s talent dense for us as well. I have seen companies succeed and know how to succeed. I don’t have that certainty for any other state,” said Max Arshavsky, founder and chief executive of Zenno Astronautics.
The company was founded nine years ago in New Zealand and manufactures powerful magnetic stabilization systems for spacecraft. It signed a lease in Torrance for its headquarters, and many of the employees are joining the founder in the move.
“It took us four and a half years from seed funding and nine years to launch in New Zealand. We are bringing our expertise and knowledge to Los Angeles,” said Arshavsky.
His journey parallels that of the gold rush nearly two centuries ago. However, the saloon has been replaced by beach bonfires, breakfast club networking, the “Gundo Gals” and chat groups. Company founders and tech talent gather to share stories, knowledge, and in some cases, the machinery itself used to manufacture prototypes, which can require large capital expenditures.
At Roboze, an additive manufacturer headquartered in Italy, company founder and chief executive Alessio Lorusso made the move to Southern California because of the climate and the culture. Italy’s hard tech startup scene doesn’t compare to Southern California, where executives chat frequently and share tips. His company is well established in other regions and has a U.S. office in Texas that supports its work in the oil and gas industry. However, as it adds more talent and scales within the aerospace and defense sector, Lorusso opened an office in El Segundo to demonstrate its products and serve as a base of operations to work with drone manufacturers and aerospace firms. The company recently announced that its Argo 500 Hyperspeed Mission Ready Production System was officially qualified by Airbus for the production of flight-ready secondary structural components using standard ULTEM 9085 filament.
“What’s the place that combines the primes, the neo-primes, the startups and the investors in the United States? We understood that El Segundo was the right choice,” said Lorusso. “Aerospace and defense needs to rapidly ramp up production, but clients need our technology for their drones, aircraft, watercraft, helicopters, missiles and rockets.”
Lorusso noted that attracting talent is crucial to his success, and the ability to find and hire in Southern California is unmatched compared to other regions. For many foreign companies, the allure of California is more than the coastal Mediterranean vibe. Labor laws can be much more flexible than European, South American and Asian countries. At-will employment where engineers and other employees can move freely to new opportunities is not the case in other regions.
Roboze sought out Southern California for its vast pool of engineering and hardware talent, but Lorusso found that the startup community was quick to welcome him. Founders understand that the strength of the ecosystem is providing support from legal to finance and other business functions. Those connections frequently happen in chat groups, informal gatherings at local coffee shops and founder gatherings at monthly beach bonfires, breakfasts and the aforementioned Gundo Gals, a group for women in the engineering field.
Neighborhood tours led by economic development groups include stops at places like the Chevron refinery, a key operator in the city of El Segundo, a city which was named after a refinery. Chevron understands how to capture emissions and stay within California’s strict environmental regulations, which include multiple agencies such as the AQMD, California Coastal Commission, local city government and others. For startups that develop new manufacturing processes, refinery executives have helped navigate the approval process for novel technology.
The region is poised for additional growth. It has a strong university system that supports its legacy and startup companies. Several hundred companies have been formed in Southern California as spinoffs from SpaceX and others to capture a portion of the estimated $626-billion global space economy. That could increase to $1 trillion within the next decade, according to Novaspace’s Space Economy Report.
Other companies have relocated or opened in Southern California. Earl Cole launched Smart Tire Co. in 2021 to utilize NASA technology for airless tires. The company was headquartered in Akron, Ohio, where there are large tire manufacturers and connections to NASA, but he packed up the office last month to open a new headquarters in Hawthorne.
“We will continue to work with NASA Glenn, but look forward to joining the Los Angeles aerospace and VC ecosystem,” said Cole.
Hawthorne is also where Lazarus Energy opened after the co-founders left Anduril to build an energy company focused on supercritical carbon dioxide powered turbines. The founders, Luke Malcolm and George Kitromelides, left their jobs at Anduril Industries to start the company. They participated in a San Francisco-based business accelerator program but chose Southern California as the launch point for their company.
In Long Beach, Maglut Heavy Industries relocated from the Bay Area after the founders quickly realized that the business climate in Southern California was much more amenable to the hard tech industry. The founders Curtis Wu and Azhar Yerzhanova had sought to open in the Bay Area in order to be closer to many of the large venture capital firms, but they found that many investors there had expertise in software but didn’t understand manufacturing. The company uses chromatography to develop a U.S.-based source for rare earth minerals that are critical to semiconductors, energy infrastructure, defense systems and most modern technology. They moved to Southern California in November 2025 just a few months after launching the company where they found a community of founders who supported them and welcomed them. One founder invited them to his home for dinner.
“In the Bay Area, investors are used to companies with a server and no other physical assets. Here, people are proud of things that are capital intensive,” said Yerzhanova.
Local planning divisions work in partnership with company founders to ensure that they have the necessary permits and can operate their unique businesses that include industries, such as nuclear energy, hypersonic missiles, satellite manufacturing and microgravity biotech.
“This area is on the forefront of the future. We are a maker space. The planning staff understands what they are building,” said El Segundo Mayor Chris Pimentel. “There are lessons to be learned. Companies are not competitive. They are responding to different demand signals.”
Pimentel noted that the city has a diverse group of businesses, including 200 toy companies. Its location near the airport and in close proximity to two major freeways helps El Segundo and its neighbors attract companies looking for long-term headquarters. Ad agency Innocean recently moved into a 110,000-square-foot office in El Segundo. Plus, four professional sports teams have headquarters and practice facilities in the city.
Verustruct, a company focused on robotic construction of residential homes and structures, recently relocated from the New York/New Jersey area to Torrance to support the growth of the company. Its founder, Nick Callegari, chose Southern California after examining locations across the country. He had some local connections having worked as a SpaceX engineer, but he pivoted after leaving SpaceX and going to business school at Yale.
“We are a public benefit corporation focused on building sustainable housing. The cost of housing here is very high, and we want to use technology to build resilient housing in Southern California,” said Callegari.
Meanwhile, aerospace and defense continue to be a main growth driver for the region. Local city officials have developed a level of expertise to understand what these companies need to succeed in neighboring towns, such as El Segundo, Inglewood, Hawthorne, Torrance and Long Beach. With many of the industrial warehouses competing for logistics tenants due to proximity to the ports, areas such as Carson could become destinations if properties have large enough footprints and the necessary infrastructure.
Mayor Pimentel said the city regularly hosts delegations of foreign companies, buyers and investors. In his experience, company founders may look to the Bay Area, Texas and other regions but quickly realize that Southern California has the critical mass to support a startup with technical requirements. While the Bay Area has the allure of Silicon Valley, and regions such as Texas, Alabama, New Mexico and others have strong manufacturing capabilities, the engineering talent spawned from local companies and universities is unmatched. He recounted a conversation with an Australian company that seemed to initially overlook the South Bay on a tour of California and Texas.
“You think you want to be in Austin, but for design, you need to be here,” said Pimentel.
