The New Defense Post #49

Welcome back to the #49 edition of The New Defense Post!

In this edition, we’ll cover:

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American defense startup Covenant emerged from stealth with Anthem, a long-range, heavy-payload missile system built for mass production. The company has raised $250 million across three rounds, backed by Andreessen Horowitz, Founders Fund, Lux Capital and others, at a valuation reported above $1 billion. Anthem first flew in August 2025 and has flown more than 200 times since, all before today's unveiling, and Covenant has already booked about $150 million in orders. (CNBC, CTech)

Covenant operates in three countries: a new factory opening in Dallas, an existing roughly one-hectare site near Leipzig, Germany, set to become its largest production location worldwide, and a development site in Israel.

Retired Lieutenant General Andreas Marlow, formerly deputy inspector of the German Army, now advises Covenant, and the company says talks are underway with Germany's defense ministry and its procurement office, BAAINBw. Covenant also claims more than 95% of Anthem's subcomponents will be sourced from Europe, built on Germany's own automotive and electronics manufacturing base, with these figures coming from the company itself. Anthem uses mostly commercial, off-the-shelf parts to keep costs down at scale, and Covenant also announced new US Army and Navy contracts the same day. (hartpunkt, ESUT)

🗣 Andreas Marlow, retired Lieutenant General and former Deputy Inspector of the German Army, now a Covenant adviser: a European-made long-range missile program is "the missing puzzle piece in our collective deterrence architecture." (ESUT)

📰 Our Take: Two hundred test flights is a lot to keep quiet. Most defense startups announce a funding round the week it closes. But in this case, Covenant flew Anthem more than two hundred times and built factories on three continents before saying a word publicly.

The 95% European supply chain claim, if it holds up, is a big deal given the company's American ownership. A factory that sources almost all its parts from German automotive and electronics suppliers could mean more of a true industrial capability transfer.

Airbus, Thales and Leonardo are moving their satellite merger, known as Project Bromo, toward a formal submission to the European Commission. Leonardo CEO Lorenzo Mariani confirmed to Handelsblatt that the three want to sign a binding framework agreement by the end of this year.

Under the October 2025 memorandum, Airbus would hold 35% of the new company, Leonardo and Thales 32.5% each, creating a roughly 25,000-person business with about €6.5 billion in annual revenue, headquartered in Toulouse. (Handelsblatt, SpaceNews)

What makes the timing notable is that the original case for merging — heavy losses across all three businesses — has largely disappeared. Airbus's broader Defence and Space division, which covers satellites alongside military aircraft, made about €800 million in adjusted profit last year, projecting up to €1.3 billion by 2029, as European governments increase spending on space and defense. Thales and Leonardo report similar growth. The three are pushing ahead anyway, arguing they still need the combined scale to compete with SpaceX and Amazon.

Not everyone agrees: Germany's OHB and Spain's Indra Space, unsurprisingly, oppose the deal. OHB ran a €900 million share placement in June, though roughly half of that was existing shares sold by shareholder KKR rather than new capital, leaving OHB with about €482 million in actual proceeds. (Handelsblatt, Mobile Europe)

🗣 Lorenzo Mariani, Leonardo CEO: the three companies are "ready to build a space domain giant, employing 20,000 and more people." (SpaceNews)

📰 Our Take: The official reason for this merger was financial distress, three loss-making businesses needing scale to survive. That reason is gone, yet all three are still pushing toward Brussels. A more likely motivation was, and is probably, about matching SpaceX and Amazon's scale, something no single European satellite maker can do alone.

OHB and Indra are fighting it for good reason. A merged 25,000-person satellite giant would hold an extremely strong position in Europe's institutional space programs, even without an outright monopoly, since rivals like OHB would still be competing for whatever share is left.

Calling this a race to space only makes sense if you look at who else is running.

China's LandSpace landed a reusable orbital booster on August 19, just two weeks before Isar's flight, the third company in the world to do it, after SpaceX and Blue Origin. China has several dozen rocket companies, of which only about eight have actually reached orbit, and the country ran 92 launches in 2025, targeting around 140 this year. (The Wire China, SpaceNews)

Russia tells the opposite story: a former superpower losing ground, not a newcomer catching up. It flew just 17 orbital launches in 2025, the lowest figure since the Gagarin era, against 181 for the US and around 91 for China. Three of its twenty planned 2026 launches have already failed, including a Baikonur pad accident and a botched Soyuz-5 test. Russian officials seem not to accept reality, though. Roscosmos's own deputy director still insists the country will rejoin the top three space powers within three to four years. (United24 Media)

Isar's flight is Europe proving the concept works here at all. What its governments and militaries actually require is not hundreds of launches a year. It is reliable, sovereign, and economically sound access for the satellites. That is a lower bar than out-launching anyone, and the more honest way to evaluate this week's news.

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