The New Defense Post #31

Welcome back to the #31 edition of The New Defense Post!

In this edition, we’ll cover:

Technical note: Swarmer's three core products. STYX is the command-and-control layer for real-time mission planning and execution. MINAS handles AI-powered collaborative autonomy for swarm behavior in GPS-denied and comms-degraded environments, enabling a single operator to coordinate 20 or more UAVs. TRIDENT is the embedded OS handling networking, encryption, and video streaming at the drone hardware level.

Licensing is per-drone at $250 to $30,000, depending on platform and integration complexity. The B2B2G model, licensing to drone manufacturers and system integrators rather than selling directly to militaries, keeps Swarmer capital-light and hardware-agnostic. Combat data from every mission continuously feeds back into the ML models. That feedback loop is the actual moat.

The gap worth pointing at for founders: nobody has built the equivalent software infrastructure for ground or maritime autonomous swarms at a comparable scale. That dataset does not exist yet.

📰 Our Take: The hype is real, the fundamentals are thin, and both things can be true simultaneously. Swarmer's revenue was $329K in 2024. The IPO raised $15M. By Friday, the company was worth over $350M. Public markets are explicitly pricing combat-tested autonomy software as a strategic asset.

For European founders, the model is worth studying carefully. B2B2G, hardware-agnostic, per-unit licensing, continuous ML improvement from live operational data. The 100,000-mission dataset is the kind of thing no lab can manufacture. If a team can demonstrate real-world performance in denied environments and build a data flywheel from it, the investor appetite is clearly there.

🗣 Matt Grimm, Co-Founder and COO, Anduril: "We're both ahead of schedule and under budget on the project, which is a rarity in the defense business." (NBC4)

📰 Our Take: Ahead of schedule and under budget almost never happens in defense manufacturing. Anduril has clearly absorbed the right lessons from watching traditional primes struggle.

The design-for-production approach, commercial materials, minimal specialized tooling, and a 22-station line that a worker can learn in five days, is the manufacturing discipline traditional primes have never needed to develop. Their customers did not require it. Anduril's customers increasingly do.

For European founders: production discipline and supply chain simplicity are now a need in their own right, not just the engineering. The question worth asking honestly is which European defense startups are thinking about manufacturing architecture from the first prototype, not from the Series B fundraise?

📰 Our Take: The four-month time-to-grant is genuinely new. European defense funding has historically moved on timelines that make even slow procurement look agile. AGILE is a direct policy response to the valley-of-death problem that kills most European defense startups: plenty of early-stage capital at one end, eventual government contract money at the other, and a brutal gap in between where companies stall out and die.

The €1M to €5M grant range fits a seed-to-Series A company profile well. Up to 100% cost coverage with retroactive reimbursement is more generous than most EU funding instruments we have seen. The explicit inclusion of Ukrainian firms is also significant and reflects a broader shift in how Brussels views Ukrainian defense tech, less as an aid recipient and more as a strategic partner.

The catch: legislative approval is still needed, and first calls are not until 2027. For founders building now, AGILE is the clearest policy signal yet, not immediate capital. The programme also sidesteps the elephant in the room: 70-80% of EU defense investment still going to ten companies. That structural problem is not solved by a €115M pilot, however fast it moves.

Ukraine’s capital will host the first Kyiv Defense Tech Week (KDTW) from April 27 to May 3, 2026, bringing together international investors, startups, engineers, military leaders, and policymakers at the forefront of defense innovation.

As global security dynamics shift, Ukraine has emerged as a critical hub for next-generation defense technologies – not only as a testing ground, but as the origin of new models of innovation built under real-world conditions.

Organized by Invest in Bravery and the European Defense Tech Hub (EDTH), together with leading ecosystem partners, KDTW connects Ukrainian experience with international capital, industrial capacity, and policy leadership, accelerating the deployment of solutions, talent, and partnerships shaping next-generation defense innovation in Ukraine and Europe.

Anduril completed its first semi-autonomous mid-flight software swap on the Fury, transitioning between Shield AI's autonomy stack and its own Lattice AI mid-mission (Defense One)

The EIB Group voted to expand its Defense Equity Facility from its fully-allocated €175M initial budget toward a new €1 billion pan-European defense and cybersecurity fund-of-funds, targeting €80 billion in total mobilised investment (EIB)

Crunchbase identified 12 defense tech IPO candidates following Swarmer's debut, with defense tech VC funding hitting a record $8.4 billion in 2025 (Crunchbase)

Pilotix is a European drone technology company building end-to-end solutions, from high-performance drones and flight electronics to advanced software systems. With in-house production and high-precision assembly capabilities, Pilotix delivers reliable, scalable platforms for both civilian and defense applications, including surveillance, industrial operations, and specialised missions.

Use code HOBBYDRONEF1 for a discount.

For the better part of the last five years, the defense tech conversation has been dominated by software: autonomy stacks, AI targeting, battlefield C2 platforms. That conversation is not going away. But the center of gravity is shifting fast, and Arsenal-1 going live three months early is the loudest signal yet.

Anduril's Ohio factory is a proof of concept for a different manufacturing philosophy. The Fury line uses aluminum instead of titanium, borrows composite techniques from recreational boat manufacturing, and sources its engine from a commercial jet supply chain with an already-global maintenance network. Simple enough that workers rotate between stations after five days of training. At three-shift capacity: 150 aircraft per year. Flexible enough that the floor can transition to a different product line without a multi-year rebuild.

Ukraine has been teaching this lesson for three years. Attack drone startups operating on the Ukrainian front run at roughly 20% gross margins, a number that would horrify a traditional prime, but that reflects what sustainable high-volume production actually looks like in a contested environment.

The LEAP initiative and AGILE from Brussels are both policy responses to the same insight: the next military advantage is not the most sophisticated single platform, it is the most efficiently produced large quantity of good-enough platforms.

Three things separate manufacturing-native defense startups from the rest.

First: design-to-manufacture thinking baked in from prototype one, not retrofitted after the product is spec-locked. Second: supply chain simplification, commercial off-the-shelf components with existing global ecosystems over bespoke military-spec parts that are slow to source and slower to iterate. Third: flexible factory architectures with minimal fixed tooling, so the same floor space can transition between product lines as requirements evolve.

The European founders worth watching are the ones who can answer the hard question: how do we produce 10,000 units? Frankenburg Technologies is targeting 100 missiles per day across two European mass-production sites. Tytan Technologies is scaling METIS interceptor production across Germany, Ukraine, and allied markets. Both are building the manufacturing habits early that will matter when the large-volume contracts arrive.

Love these insights? Forward this newsletter to a friend or two. They can subscribe to our website.