The New Defense Post #42

Welcome back to the #42 edition of The New Defense Post!

In this edition, we'll cover:

Spotlights: Helsing Raised $1.8B at an $18B Valuation, Europe's Biggest-Ever Defense Startup Round; NATO Approved a $40B+ Counter-Drone Initiative to Become “Drone-Ready”; Germany Is Financing 50,000 Ukrainian Shrike FPV Drones in a €90M Deal

Fundraising News of the Week: Helsing's $1.8B Series E leads the pack, alongside Kraken Technology Group's $175M Series B at a $1B valuation, Skapion's $36M seed for counter-swarm defense, and Project Q's €15M Series A for defense integration software.

Bonus Section: Britain's startup fast-track machine.

Munich-based Helsing announced a $1.8B Series E on Monday, valuing the company at $18B and marking the largest funding round ever for a European defense startup. Demand significantly exceeded the available allocation, and the company says it remains predominantly European-owned.

New and existing investors participated, including Dragoneer, Lightspeed, Disruptive, Iconiq, Growth Equity at Goldman Sachs Alternatives, JPMorganChase, CPP Investments, General Catalyst, Plural, and Stepstone. The round lifts Helsing's valuation from a reported €12B in June 2025 and follows Quantum Systems' €1B ($1.2B) Series D at an $8B valuation earlier this month. (Tech.eu) (Defense News)

The capital will fund AI software, autonomous systems, and next-generation defense platforms. Helsing has long since expanded beyond software: it now builds AI strike drones designed for GPS-denied, jammed environments, plus underwater surveillance systems for critical infrastructure. (Tech.eu)

🗣 Loredana Muharremi, Analyst at Morningstar: future defense is moving toward a layered, networked battlefield, and companies with platform scale across autonomy, air defense, sensors, EW, software, and space are best positioned to capture it. (CNBC)

📰 Our Take: Europe's most valuable private startup is now a defense company. Let that sink in.

The concentration story from the NIF/Dealroom report keeps playing out: late-stage mega rounds are absorbing most of the capital, and Helsing alone just raised more than many European countries' annual defense R&D budgets. A 50% valuation jump in 13 months shows a lot of confidence in the neoprimes capturing a large share of the defense spending.

I remain quite sceptical about being able to maintain high margins with increased competition. Most Ukrainian companies hold a 20% gross margin, which is more typical of traditional heavy industry. If they manage to make software a larger share of their revenue, they might prove me wrong, though.

2. NATO Approved a $40B+ Counter-Drone Initiative to Become “Drone-Ready”

NATO Secretary General Mark Rutte announced a new drone initiative under which allies will invest more than $40B in counter-drone capabilities over the next five years, calling drones a decisive factor on the modern battlefield. (CNBC)

The package goes beyond procurement: it includes a NATO counter-drone marketplace to give industry faster access, expanded drone operator training under NATO Flight Training Europe, and a major surveillance-drone contract through the NATO Support and Procurement Agency. It builds on the alliance's new Innovation Ranges, where counter-drone systems are tested against operational scenarios before procurement. (Army Recognition)

It lands amid a broader European drone surge: the UK committed £5B to a “drone transformation” programme in its Defence Investment Plan, and the European Commission proposed five Defense Projects of Common Interest in early July, with drones and counter-drone systems among the priorities and a combined funding ambition of around €190B by 2036. (CNBC) (European Commission)

🗣 Mark Rutte, NATO Secretary General: drones have “fundamentally altered” the character of modern warfare. (CNBC)

📰 Our Take: $40B over five years is serious money for a category where the whole point is that the effectors are cheap. Which brings me to the question: what do you need to keep them updated and combat-ready? Some interesting startups could rise in the maintenance area for drones and other accessory services to maintain such a large fleet, think training, regular updates, etc.

Germany is funding 50,000 Shrike FPV attack drones for Ukraine in a deal worth about €90M ($103M), one of the biggest known drone purchases for Kyiv by a Western government. Some drones have already been delivered, with the rest due by the end of 2026. (Reuters)

The drones are built by Ukrainian manufacturer SkyFall and run software from Auterion that autonomously tracks and hits moving targets in the final phase of flight, even after the control link is jammed. Auterion says it is helping to supply around 100,000 software-equipped drones to Ukraine this year across multiple manufacturers, including a $50M Pentagon contract for 33,000 units already delivered. (Reuters)

The Shrike family is going global: the Shrike 10-F, produced with UK firm Skycutter, recently topped the leaderboard in the first round of a Pentagon competition under a $1.1B one-way attack drone initiative. The UK pledged 150,000 drones for Ukraine this year within a £752M package, and on July 8 Ukraine and Germany signed an agreement to jointly produce BARS drones. (Reuters) (RBC-Ukraine)

🗣 Lorenz Meier, CEO of Auterion, confirmed the roughly €90M contract, funded by “a European country”; SkyFall itself confirmed Germany's involvement. (Reuters)

📰 Our Take: Denmark pioneered the model of financing Ukrainian producers directly; Germany just scaled it, and the Pentagon is running competitions that Ukrainian designs are winning.

The main issue with using these drones for European procurement is the lack of component suppliers of European origin. Currently, you can build a "European" FPV, but it's going to cost 10x what one built with Chinese parts would.

Expeditions closed Fund II at €197M to back up to 40 early-stage European defense startups, overshooting its €150M target, with BAE Systems, the NATO Innovation Fund and Poland's PFR among the LPs. (TNW)

Kraken Technology Group became Europe's newest maritime defense unicorn, raising $175M at a ~$1B valuation after a year of contracts from the UK MoD, NATO partners and USSOCOM. (EU-Startups)

NATO's DIANA accelerator selected ten companies for its latest cohort. (Resilience Media)

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.

In #41 we walked through France's Guichet Unique. This week the UK side of that story moved, so we're keeping the thread going: how does a defense-tech founder actually get into the British system, and is it worth the effort now? On June 22, the MoD signalled a shift toward early industry engagement, bringing companies into capability development sooner, the same direction France took. (Defence Online) UK Defence Innovation (UKDI), under the new National Armaments Director group, is meant to be the front door, consolidating multiple innovation schemes. (techUK)

In January the government launched a £20M "defense unicorn" fund aimed at UK-owned startups with little or no prior MoD work, across AI and data, robotics and autonomy, and enhanced precision weapons. (Aerospace Testing) In May it put that money to work, awarding up to £4M each to thirteen British companies through its "Commercial X" fast-track, most new to defense, for sensors, autonomy, secure comms, space manufacturing and simulation. (Resilience Media) Add a new Office of Small Business Growth, a segmented three-tier model with Spiral and Urgent pathways for faster buys, and reformed profit rules from May that let suppliers earn up to 10% for delivering on time. (GOV.UK)

Now the honest part. The plumbing is ahead of the water. The Defence Investment Plan slipped from autumn 2025 into February 2026, and the £18bn hike was only just approved. The SME Action Plan slipped too, and analysts have flagged real uncertainty about UKDI's own role, funding and operating model. In-year MoD financial pressure has pushed awards and tenders to the future, and plenty of UK defense SMEs forecast lower FY25/26 revenue even as headline spending climbs. (SDSC-UK) Some are already looking abroad.

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