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European buyers are placing lots of of thousands and thousands of euros into two surveillance drone firms, Quantum Methods and Tekever, in offers that worth every of the defence expertise start-ups at greater than €1bn.
New buyers are flocking to the marketplace for defence or “twin use” expertise, which can be utilized in each civilian functions and on the battlefield.
The most recent rounds come because the makers of drones deployed in Ukraine’s warfare with Russia scale up manufacturing as Europe races to spice up its defence capabilities, following the Trump administration’s threats to withdraw US navy assist within the area.
Munich-based Quantum Methods has raised €160mn led by Balderton Capital, within the London-based enterprise agency’s first defence tech funding, alongside strategic backers Hensoldt and Airbus Defence and House.
The deal, which additionally contains current buyers together with US enterprise capitalist and Palantir co-founder Peter Thiel, values Quantum at greater than €1bn, in keeping with individuals conversant in the phrases.
“The purpose is to make the battlefield clear and have real-time aerial intelligence from each a part of the entrance line,” mentioned Florian Seibel, co-chief government and co-founder of Quantum Methods. “You possibly can solely shoot if you understand the place to shoot. So that you want eyes within the sky.”
Individually Tekever, which was based in Portugal in 2001, mentioned it raised tens of thousands and thousands of euros from its current buyers, led by long-term current backer Ventura Capital. Its new valuation was “past £1bn”, Ricardo Mendes, chief government of Tekever, instructed the Monetary Instances, however he refused to specify the precise quantity raised.
Tekever final yr raised €70mn in a spherical led by Baillie Gifford that was additionally backed by the Nato Innovation Fund.
Funding in European start-ups engaged on defence and associated applied sciences jumped 24 per cent in 2024 to $5.2bn, in keeping with figures from the Nato Innovation Fund and analysis group Dealroom.
Quantum’s expertise brings collectively drone {hardware}, software program and synthetic intelligence to construct autonomous methods for real-time “aerial intelligence”. Its merchandise have been utilized by nations together with Germany, Ukraine and the US.
After struggling to commercialise its drones in its preliminary goal market of agriculture, Seibel, a former helicopter pilot within the German armed forces, determined to make use of business expertise to tackle conventional defence firms. “They’re gradual, they’re costly, they’re conceited,” he mentioned. Its new product was prepared simply as Russia’s full-scale invasion of Ukraine started in 2022.
Quantum generated €110mn in income final yr and is on monitor to hit greater than €200mn this yr, Seibel mentioned. It has manufacturing capability in a number of nations to supply as much as 4,000 drones a yr in varied configurations.
Rana Yared, normal associate at Balderton Capital, mentioned Quantum might “scale shortly” to grow to be one of many main lights of Europe’s defence tech industries.
Balderton needed to spend money on Quantum, which has greater than doubled its annual income for the previous a number of years, due to its variety of shoppers and functions, which additionally embrace mining, infrastructure and emergency companies.
“Our purpose is to spend money on firms which have nice trajectories in a world that’s extremely peaceable,” Yared mentioned. “It will be cavalier to spend money on an organization that solely does properly on this destructive geopolitical [situation].”
Nonetheless, the battlefields of Ukraine have pushed fast progress for a lot of defence tech start-ups, together with Munich-based Helsing, which has raised lots of of thousands and thousands of euros.
Mendes mentioned the warfare in Ukraine had made each authorities “in Europe conscious that the character of the expertise getting used within the area has modified”.
Demand had been such that Tekever had been “greater than doubling” its manufacturing capability yearly. It expects to supply greater than 200 methods this yr. One of many greatest challenges, he mentioned, was how shortly the business can scale up.
Tekever, which additionally has operations within the UK, makes AI-enabled drones for surveillance and reconnaissance missions. Two of its drones, the AR3 and the AR5, have been used extensively in Ukraine, enabling precision strikes utilizing real-time intelligence. Different prospects embrace the European Maritime Security Company and the UK Dwelling Workplace.
Mendes mentioned its new funds would assist Tekever, which is already worthwhile, to ship on a pledge to take a position £400mn within the UK over the subsequent 5 years.