It all started last summer when I approached Benjamin with a newsletter idea.

I couldn't find a satisfactory one-stop place to read about the innovations in defense tech, opinion-based writing to bring clarity to this very murky sector, and hear the stories of the people behind this revolution that is one of the great moats of our generation and our best chance to protect what matters.

I'm glad that by edition 44 such a place now exists in The New Defense Post, and that it's read by so many exceptionally smart and driven people every week.

I'm moving on from The New Defense Post and EDTH to embark on new adventures, but whether it's guidance, connections or just a chat, you'll find me at my linkedIn.

As always, since edition one, this was “For those building and funding the next generation of defense startups” and it was a pleasure to share it with you.

Welcome back to the #44 edition of The New Defense Post!

In this edition, we’ll cover:

Spotlights: EU Releases €3.47B for Ukrainian Drones, Missiles, and Gripen Jets; Pentagon Bets $820M on Fixing America's Drone-Component Bottleneck; Leonardo DRS Buys AI Data-Fusion Startup Raft for $450M

Fundraising News of the Week: Recent rounds include Array Labs' $21M led by Mitsubishi Electric and Twenty's $30M Series B extension at a $1.2B valuation.

Bonus Section: The chokepoints in Ukraine's drone supply chain, and why Europe is only now hitting them.

The Acutronic Group serves as the hidden backbone to much of the aerospace & defense industry, delivering the picks and shovels needed for next-generation systems.

We are the only manufacturer of micro-turbines, actuators, power systems, rate tables, and vibration test systems with a global footprint across the US and Europe.

The Department of War's Office of Strategic Capital signed a conditional loan commitment of up to $820M with Performance Drone Works (PDW), an Alabama-based manufacturer, to build high-volume domestic production of the propulsion, power, and vision components that currently bottleneck the entire U.S. drone industrial base.

The financing is explicitly tied to President Trump's "Unleashing American Drone Dominance" executive order, and OSC says PDW will be one of several component makers to receive similar loans. (PRNewswire) (Soldier Systems Daily)

🗣 David A. Lorch, Director of the Office of Strategic Capital: PDW will be one of several domestic component producers receiving OSC loan commitments in support of the White House's drone-dominance push, and expanding domestic production will benefit manufacturers throughout the ecosystem. (Soldier Systems Daily)

📰 Our Take: Swap out solid rocket motor fuel for brushless motors, flight controllers, and optics, and you have the exact supply chain choke point that is blocking Western hardware from scale production.

This is a problem that has been increasingly addressed, but that is still far from solved. It is still very real in Europe when it comes to rocket propellants, magnets, sensors and other basic components. This is a field where European founders can work on real difficult problems while building a company with structural importance.

For the VCs and PEs in the audience, keep an eye on these startups. They'll need large growth-stage rounds, and on sensing especially, they could become the backbone of the coming push into civilian robotics.

Leonardo DRS, the Nasdaq-listed U.S. arm of Italy's Leonardo, agreed to acquire Raft LLC in an all-cash deal worth $450M. Raft's open-architecture software fuses data from disparate sensors into a single operating picture, aimed squarely at the problem of militaries drowning in more sensor data than they can process in time to act on it. The deal is expected to close in Q4 2026. (Leonardo DRS)

🗣 John Baylouny, President and CEO, Leonardo DRS: Raft adds proven software talent and open-architecture technology that complement DRS's existing sensing and computing capabilities. (Leonardo DRS)

📰 Our Take: While legacy primes typically rely on non-controlling venture checks or loose joint ventures to claim software capabilities, DRS is executing a full cash buyout.

Dropping $450M in cash signals a fundamental realization: modern defense is defined largely by software, and command-and-control data fusion is foundational infrastructure.

Primes can no longer ignore the AI wave. Plus, it is difficult to acquire top AI talent and this is a prime example of that by buying an external company instead of growing the talent internally and developing internally.

Array Labs raised a $21M round led by Mitsubishi Electric to launch a satellite-tracking partnership spanning aircraft and maritime surveillance across the Asia-Pacific, funding R&D and expansion for its space-based radar constellation. (The Defense Post)

Twenty, the offensive cyber-warfare startup that closed a $100M Series B a month ago, tacked on a $30M extension from Khosla Ventures at a $1.2B valuation. (Tectonic Defense)

BAE Systems' CEO flagged sustained European growth off a 30% sales rise and the UK's near-£300B defence spending plan, landing the same week as the Raft acquisition. (Defence Industry Europe)

Rolls-Royce says the UK's £9B commitment to the Global Combat Air Programme gives it funding visibility through 2030. (Defence Industry Europe)

Ukraine went from a handful of drone makers in 2022 to hundreds of companies shipping hundreds of thousands of systems a month. But this came with a serious dependency on non-NATO-aligned nations.

Assembly is Ukrainian. The inputs mostly aren't. Frames are made in Kyiv workshops and controllers run Ukrainian firmware, but the lithium, the neodymium and the chips still come from abroad. Domestic SMD (resistors, capacitors, inductors…) component production doesn't exist at all. PCB manufacturing exists but stays small and lacks advanced processes. Carbon fibre, fibreglass, optical fibre, aluminium and permanent magnets aren't made at industrial scale in the country.

The dependency shows up as a pattern. Localisation has worked wherever improvisation and fast assembly can close the gap: airframes, housings, battery packs. It stalls wherever battery cells, IP, scale or certification set the terms. That's why optics, navigation chips, separators and LiPo chemistries are still imported after more than four years of war.

You can out-engineer a small supply gap. You can't out-engineer a germanium refinery.

According to a survey conducted by Snake Island Institute, 40% of manufacturers reported delivery delays from China. Nearly a quarter flagged customs and logistics sanctions.

Across all challenges, logistics disruption hit 33.3%, with customs delays and unreliable suppliers tied at 30%. Suppliers turn unreliable mainly because Chinese export licensing shifts without warning.

China controls over 80% of global germanium production, which sets the price floor for anything with a thermal sensor in it. It holds about 85% of global battery capacity.

In 2022, 97% of imported UAS into Ukraine came from China, and once DJI suspended sales, Mavic 3 prices jumped from roughly $2,600 to $2,900 while units went grey-market. This is mostly changing but not quickly enough.

Chinese firms shipped at least $67M of parts to sanctioned Russian producers across 2023 and 2024, with around $14.5M going to Shahed-style manufacturing at Alabuga, via 97 different suppliers.

For instance, one Ukrainian maker was told motor lead times had suddenly cleared. The reason was that Russian buyers had purchased the Chinese production lines outright and moved them in-house.

Among the most prominent import dependencies: lithium salts, neodymium magnets, sensors, chips, optics. Ukraine's problem is Europe's problem now that the scale-up in drone production is happening.

Resilience built on improvisation is temporary. Without allied investment or licensed IP transfer, these chokepoints don't close on their own.

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