Welcome back to the #27 edition of The New Defense Post!
In this edition, we’ll cover:
Defense in the Next Decade: Structural Shifts, Hard Problems, and Where Real Capital Should Go
Spotlights: A Busy Week for Europe’s Air Defense Startups; German MPs Cut and Capped “Kamikaze Drone” Contracts for Stark and Helsing Amid Cost/Accountability Concerns; Poland’s Parliament Approved Legislation to Tap €43.7B in EU Safe Defense Loans, Pending Possible Presidential Veto
Fundraising News of the Week: Recent defense-sector fundraising highlights include a $1.2B discounted stock sale by Kratos Defense & Security Solutions, as well as €30M Series A rounds for TYTAN Technologies (AI-based interception systems) and Frankenburg Technologies (missile and air-defense manufacturing).
Bonus Section: Long-range cruise missiles
Defense in the Next Decade: Structural Shifts, Hard Problems, and Where Real Capital Should Go
Photo Credit: Quantum Systems
The defense sector is entering one of its most consequential transitions since the end of the Cold War.
What makes this moment distinctive is not simply rising budgets or renewed geopolitical tension, but the convergence of multiple structural forces at once: prolonged great-power competition, an eroded industrial base, and technological change that increasingly rewards speed, adaptability, and production volume rather than perfection.
Together, these forces are reshaping how wars are fought, how militaries procure capability, and where long-term strategic and financial value will be created.
To understand where defense is heading over the next five to ten years, we must abandon assumptions rooted in conflict over the last three decades. The post–Cold War era was defined by short campaigns, uncontested air dominance, and limited attrition.
That period now looks to be an exception rather than a rule. What is emerging in its place is a form of warfare that is exceptionally brutal and deeply dependent on industrial endurance.
Spotlights
1. A Busy Week for Europe’s Air Defense Startups
Photo Credit: Frankenburg Technologies
Frankenburg Technologies and Tytan Technologies have each raised €30M as investors increasingly turn their attention from strike drones to air-defense and interception systems in Europe.
Tallinn-based Frankenburg, which develops low-cost missile systems to intercept attacks, raised funding led by Plural alongside Estonia’s SmartCap, while Munich-based Tytan closed a Series A co-led by Armira and the NATO Innovation Fund with participation from Lakestar, Visionaries Club, OTB Ventures, D3, 10x Group, and others. The rounds bring total funding to €40M for Frankenburg and €46M for Tytan.
The companies are positioning themselves around scalable, high-volume defense production. Frankenburg plans to establish two European mass-production sites targeting output of 100 missiles per day, while Tytan will expand manufacturing across Germany, Ukraine, and allied markets and further develop its AI-powered interceptor systems. Tytan says it has confirmed orders from Ukraine and secured multiple government contracts, including procurement agreements for thousands of METIS interceptor drones for the Ukrainian armed forces. (Sifted) (Munich Startup).
🗣 Sten Tamkivi, Partner at Plural: “In a world where an adversary can deploy tens of thousands of autonomous attack drones, defense must be cheap, fast, and count in millions of units available.” (Sifted)
📰 Our Take: Attritable air defense was a big topic a few months ago; now, capital is following.
Defense is a space where geopolitics plays an immensely important role in shaping who will be the winner. That’s where you have to look for future demand signals. Large government demand in Europe and research into attritable air defense were a consequence of Russian drone incursions into Poland last year. Stronger demand for other systems will be the future here.
Food for thought: Is any startup out there working on building alternatives to radar for identifying fifth-generation stealth fighter jets?
2. German MPs Cut and Capped “Kamikaze Drone” Contracts for Stark and Helsing Amid Cost/Accountability Concerns
Photo Credit: Helsing
German lawmakers have sharply reduced the scale of two flagship Bundeswehr drone contracts with startups Stark and Helsing, cutting planned spending by more than half and capping future commitments.
The Bundestag’s budget committee lowered the potential value of the deals, which had been expected to reach up to €2.9B for Berlin-based Stark and €1.46B for Munich-based Helsing, and imposed a €1B ceiling per producer. It also required the defense ministry to seek approval for any purchases beyond the initial €269M order allocated to each company.
🗣 Bundestag Budget Committee: “Security demands decisiveness. Budgetary management demands moderation… it is the task of parliament to combine speed with responsibility.” (Financial Times)
📰 Our Take: Two steps ahead and one step back. Overall, the budget proposal was ambitious to start with, and there is a strong sense that significant interests are working to avoid a Neoprime that would secure a major defense contract.
Overall, it is a fairly good deal: €269M, with the option to increase it after additional scrutiny. It’s not ideal, but it’s not too bad.
3. Poland’s Parliament Approved Legislation to Tap €43.7B in EU Safe Defense Loans, Pending Possible Presidential Veto
Photo Credit: CEPA
Poland’s parliament has approved a law enabling the country to spend €43.7B in EU loans under the bloc’s €150B Security Action for Europe (SAFE) initiative to strengthen its armed forces, though the measure now faces potential veto by President Karol Nawrocki.
Warsaw is the largest beneficiary of SAFE, but the program has sparked political debate. The nationalist opposition Law and Justice party argues the mechanism could limit arms purchases from the United States and open the door to unwanted EU influence. Prime Minister Donald Tusk’s pro-European government rejects this, saying the financing comes without restrictive conditions and is essential given what it describes as a rising threat from Russia. (Reuters)
🗣 Wladyslaw Kosiniak-Kamysz, Defense Minister: “Without the SAFE programme, we have no other option to build an even stronger army and have better-equipped and safer soldiers in such a short time.” (Reuters)
📰 Our Take: Poland is trying to move fast to use EU financing to strengthen its military, but the political fight at home shows how sensitive Brussels-linked defense funding remains.
The president’s decision will ultimately determine how much of the SAFE programme Warsaw can actually use to build up and modernise its armed forces. It might be the right time to open a Polish EDTH office.
Other News
NATO Innovation Fund + Dealroom reported European Defense/Security/Resilience startups raised $8.7B in 2025 (NATO Innovation Fund)
Fundraising News
Amount | Name | Round | Category |
|---|---|---|---|
$1.2B | Defense Contractor | ||
€30M | AI-Based Interception Systems | ||
€30M | Missile / Air-Defense Manufacturing |
Bonus Section — Startup’s Cruise Missiles
Photo Credit: Destinus
Modern warfare is pushing long-range strike out of the realm of “exquisite” munitions and into a new reality: systems that can be produced quickly, iterated fast, and fielded in volume.
That shift is one reason startups are moving toward cruise-missile and deep-strike capabilities. Destinus explicitly positions itself as a European defense manufacturer that “develops and manufactures cruise missiles, loitering munitions, and kinetic interceptors,” engineered for scalable, cost-effective production and industrial-scale manufacturing in Europe.
Ukraine has also accelerated the development of indigenous long-range strike systems, thanks to companies like Fire Point, which are building systems such as the Flamingo (FP-5)—a Ukrainian cruise missile with a reported 3,000 km range, described by President Zelenskyy as Ukraine’s “most successful missile.”
Another startup pushing into cruise-missile territory is Anduril. Its Barracuda family is described as “air-breathing Autonomous Air Vehicles” built for “hyper-scale production and mass employment,” and Anduril has also published details on Barracuda-M, positioning it as a cruise-missile-class system with turbojet propulsion and extended range.
The common thread is not that startups are replacing primes overnight. It is that they are forcing a new equation: deep strike has to be scalable and economically sustainable.
Companies that can build strike systems and supply chains designed for volume, while keeping iteration speed high, are starting to look less like niche vendors and more like strategic industrial partners.
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