Space Kinetic still has a facility in New Mexico, but it\u2019s expanding rapidly in its new headquarters and manufacturing space \u2014 in El Segundo, where it moved last year. <\/p>\n
\u201cIt came down to the talent density. There\u2019s a number of folks who have expertise and the disciplines that we need to hire for,\u201d co-founder Ryan Sullivan said. \u201cThat paired with the fact that there\u2019s already a kind of well-established deep-tech startup ecosystem.\u201d<\/p>\n
Space Kinetic\u2019s decision is not surprising for a new generation of entrepreneurs who are building on the L.A. region\u2019s rich aerospace and defense heritage, following in the path of Elon Musk\u2019s SpaceX<\/a>.<\/p>\n Hypersonic aircraft company Hermeus recently announced that it also was relocating its headquarters<\/a> to El Segundo from Atlanta, while two Colorado aerospace companies, True Anomaly<\/a> and Voyager Technologies<\/a>, opened large plants in Long Beach.<\/p>\n Aerospace company True Anomaly\u2019s facility in Long Beach.<\/p>\n (Los Angeles Times)<\/p>\n Southern California aerospace startups have doubled down on the region too, opening larger local headquarters as they grow, including space station builder Vast<\/a> in Long Beach and drone maker FlightWave Aerospace<\/a> in Torrance.<\/p>\n The decisions by these companies to open or expand headquarters, design or manufacturing spaces in California runs counter to a narrative that has gained national traction \u2014 that the state is bad for business and companies are fleeing.<\/p>\n That\u2019s despite the state\u2019s economy growing 5% last year<\/a> to a record $4.25 trillion, making it larger than all but the U.S., China and Germany \u2014 buoyed not only by defense and aerospace but also by AI, where California is the global leader.<\/p>\n The state is home to nearly 400 \u201cunicorns\u201d, or billion-dollar startups \u2014 more than any other state, according to CB Insights. It also gobbled up nearly two-thirds<\/a> of U.S. venture capital last year, with San Francisco Bay Area startups such as OpenAI<\/a> leading the way, business information platform Crunchbase found. <\/p>\n Still, the negative narrative is persistent, dating to the end of the Cold War era, when Lockheed Martin<\/a> and other defense contractors left the state \u2014 even as they kept many operations behind. And it has continued this decade with the headline departures of Chevron<\/a>, Tesla<\/a> and other major corporate offices.<\/p>\n Just this week, K&B Home, one of the largest home builders in California, said it was moving to Arizona,<\/a> citing the Golden State\u2019s high costs and housing prices.<\/p>\n A study released last year by the Public Policy Institute of California<\/a> found that there is truth to the idea that an increasing number of companies have moved headquarters to other states.<\/p>\n A surge in new businesses<\/p>\n There were 1,884 companies that moved their headquarters out of state last decade, while 1,095 moved in. However, the net loss of corporations was dwarfed by the number of new businesses founded in California during the same period. That number totaled 7,250, according to the Public Policy Institute.<\/p>\n \u201cThere\u2019s clearly a lot of benefits to being in California,\u201d said labor economist Sarah Bohn, a co-author of the study. \u201cWe have a really large and productive economy.\u201d<\/p>\n The Public Policy Institute is updating its study with data through 2025, which would capture both the aerospace and defense boom, as well as the explosion of AI startups in the Bay Area.<\/p>\n (Hermeus)<\/p>\n Still, Bohn said that last year\u2019s study points to challenges California faces that are not going away, including the higher taxes and tougher regulations faced by businesses.<\/p>\n \u201cWe\u2019re in an era when our population growth is slowing and costs have increased,\u201d she said. \u201cWe\u2019re at a point where looking at that competitiveness and the factors that contribute to it is really essential.\u201d<\/p>\n Space Kinetic\u2019s relocation to El Segundo was prompted by $12 million in seed funding it received from Balerion Space Ventures. In July, it moved into a 24,000-square-foot space near where another aerospace company is expanding.<\/p>\n The company plans to rapidly prototype its Whirlwind spacecraft there and eventually start production. It will be the \u201ccenter of gravity\u201d of its engineering team. \u201cWe\u2019re expanding like crazy,\u201d Sullivan said.<\/p>\n The dynamics that caused Space Kinetic to relocate its headquarters to El Segundo are similar to what convinced Hermeus to move to the city, where it is opening a new headquarters, design and prototyping facility.<\/p>\n The move to Southern California puts it in a hotbed for hypersonic research. In Long Beach, Rocket Lab has military contracts to launch hypersonic payloads<\/a>, while Stratolaunch<\/a> at the Mojave Air and Space Port in the high desert is testing hypersonic vehicles for the military.<\/p>\n \u201cIf you think about Los Angeles, it\u2019s a sort of heart and soul of American aviation innovation, and it\u2019s the current heart and soul of high speed, heavy hardware iteration,\u201d said Zach Shore, Hermeus\u2019 president.<\/p>\n The startup, which recently announced a $350-million funding round, plans to retain its 110,000-square-foot manufacturing facility in lower-cost Georgia, the site of other aerospace plants.<\/p>\n Hermeus\u2019 announcement came just one month after the opening of Voyager Technologies\u2019 140,000-square-foot \u201cinnovation lab\u201d<\/a> in Long Beach, where it will use artificial intelligence to speed development of new tech.<\/p>\n The Denver startup is building a commercial space station and has other aerospace, as well as defense and national security businesses. It will operate a circuit board assembly line in Long Beach that will enable it to rapidly iterate designs for the critical electronics, said Matt Maga\u00f1a, president of defense and national security.<\/p>\n (Kyle Grillot \/ Bloomberg )<\/p>\n The location also is close to the facilities of two partners, including True Anomaly, which makes reconnaissance satellites. The company said it cannot disclose what it is building in the 90,000-square-foot factory.<\/p>\n \u201cThere\u2019s years and years of history and understanding [here] of what it takes to build critical systems,\u201d Maga\u00f1a said.<\/p>\n Costa Mesa autonomous weapons maker Anduril Industries<\/a> is the other partner. The most prominent of Southern California\u2019s new defense tech companies, it was the recipient of a $2.5-billion funding round<\/a> last year and is valued at more than $30 billion.<\/p>\n Anduril is building 1.2 million square feet of offices and research and development space<\/a> near Long Beach\u2019s airport for prototyping and other advanced engineering. The first building in the complex will open next year.<\/p>\n \u201cAs we look at the next five to 10 years of growth for the company, we\u2019re going to be embarking on a whole bunch of new programs. That means we\u2019re going to need to hire people,\u201d co-founder Matt Grimm told the Times in January.<\/p>\n High costs in California still a challenge<\/p>\n But as impressive as the Long Beach expansion is, Anduril is one of several of the new aerospace and defense startups that already are expanding outside California.<\/p>\n Anduril started drone production this year at a \u201chyperscale\u201d manufacturing plant<\/a> in Columbus, Ohio, that is expected to eventually span 5 million square feet and produce a variety of weapons.<\/p>\n Anduril also makes solid-rocket motors in Mississippi, autonomous submarines in Rhode Island and has other factories around the country and internationally.<\/p>\n Ohio\u2019s attractions include an existing aerospace workforce, a U.S. Air Force operations and research base, NASA facilities and other military operations.<\/p>\n Hadrian<\/a>, a Torrance-based manufacturer of defense and aerospace parts using AI-automated machinery, opened a second facility in its home city last year to do research and development. <\/p>\n But this year, the startup also opened two massive plants out of state: a 290,000-square-foot factory in Mesa, Ariz., where it make a variety of products and a $2.4-billion plant in Cherokee, Ala., to build submarine components for the Navy.<\/p>\n Anduril\u2019s Roadrunner jet drone can return to its launch spot at Anduril\u2019s headquarters in Costa Mesa. The company is building 1.2 million square feet of offices and research and development space near Long Beach\u2019s airport.<\/p>\n (Kyle Grillot \/ Bloomberg via Getty Images)<\/p>\n \u201cBoth [states] offered strong industrial talent, proximity to key customers, and a supportive local environment that allowed us to move quickly,\u201d said Hadrian spokesperson Mac Bohannon.<\/p>\n Two years ago, Castelion<\/a>, a Torrance startup, was looking to build a large plant where it could safely test and mass produce the rocket-powered hypersonic missiles it is developing.<\/p>\n It looked around for 1,000 acres in Southern California and finally settled for Sandoval County in New Mexico<\/a>, outside Albuquerque \u2014 despite the two-hour plane ride.<\/p>\n \u201cI think we\u2019ll continue to expand here [in Southern California], but I do think it\u2019ll become more of a two poles rather than one [company],\u201d co-founder Andrew Kreitz said.<\/p>\n He cited several reasons, including California\u2019s lengthy regulatory process and higher costs, noting much lower utility prices in New Mexico.<\/p>\n Gov. Gavin Newsom, through California\u2019s Office of Business and Economic Development, better known as GO-Biz<\/a>, has sought to attract businesses from other states and stem the tide of local companies moving or expanding out of state.<\/p>\n Last year, the agency released an \u201ceconomic blueprint\u201d<\/a> that identified four key industries: aerospace and defense, life sciences, agriculture tech, and semiconductors and microelectronics. <\/p>\n The state is spending hundreds of millions of dollars promoting California\u2019s workforce and other advantages while funding job training, grants, tax credits and other programs.<\/p>\n Jerry Nickelsburg, faculty director of UCLA\u2019s Anderson Forecast<\/a>, is skeptical that incentives can always make a difference given the far lower costs in some states.<\/p>\n But for tech companies seeking an advanced labor pool California can be very attractive. In a giant Long Beach warehouse near where Boeing used to build the C-17 cargo jet, Vast is fabricating what could be the first commercial space station to circle Earth.<\/p>\n (Allen J. Schaben \/ Los Angeles Times)<\/p>\n He also noted that companies move for strategic reasons, citing defense contractors Northrop Grumman and Lockheed Martin, which wanted to be closer to the Pentagon.<\/p>\n Also unclear is the economic effect of any losses of headquarters.<\/p>\n The Public Policy Institute study found that the net loss of jobs from California headquarters relocations last decade averaged less than 8,000 annually and that many companies kept in-state operations.<\/p>\n![\"Aerospace](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/04\/1776421928_994_.jpeg\")
<\/p>\n![\"Hermeus'](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/04\/1776421928_741_.jpeg\")
Hypersonic aircraft company Hermeus recently announced it was relocating its headquarters<\/a> to El Segundo from Atlanta. Above is Hermeus\u2019 Mk 2.1 autonomous aircraft, which took off from Spaceport America and flew over the White Sands Missile Range in February. <\/p>\n![\"Autonomous](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/04\/1776421928_268_.jpeg\")
Autonomous weapons maker Anduril Industries<\/a> is based in Costa Mesa and will be expanding to an office in Long Beach. <\/p>\n![\"A](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/04\/1776421929_418_.jpeg\")
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\u201cYou want to be where the talent is and for some industries you are going to locate in California,\u201d he said.<\/p>\n![\"Four](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/04\/1776421929_5_.jpeg\")
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