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NEWS British Army releases challenge set The British Army has just released its rapid capability development Challenge Set 2025, marking a pivotal moment in UK defence innovation. This comprehensive document outlines four critical capability areas where industry partnerships can help double the Army's lethality by 2027. British Army doctrinal publications aren’t normally very exciting, but this one is different. It proposes a new way of engaging with industry. Most notably, it’s a step away from the cost plus methodology of contracting for defence capability. That will still exist, but alongside a fresh methodology of ‘here’s our problem, show me what you have that can solve it’. That is good news for early-stage companies, who will be able to map their products to the challenges in the document. In place of endless specifications and multi-year procurement cycles, the Challenge Set invites solutions in a way that’s closer to how venture-backed startups pitch to customers. That in turn opens the door to earlier engagement and iterative development. If you’re a founder in defence tech, this document could be your roadmap. Anduril launches cruise missile Anduril, a new American defence prime, has revealed a cruise missile, Barracuda. Since Anduril specialises in autonomous systems, they’ve called it an Autonomous Air Vehicle (AAV) rather than a cruise missile. They have ticked most of the current defence tech bingo words - ‘hyperscale production’, ‘attritable mass’, ‘modular payloads’ - that all makes sense. But what caught my eye was the fact that it features ‘modular open systems architecture’. Anduril’s products are famous for being like Apple’s iPhones - much like iOS, Anduril’s Lattice is a closed system. It will talk to other Anduril systems, but doesn’t integrate non-Anduril products well - like trying to AirDrop to a Samsung Galaxy. That has always been a sticking point for customers in Europe, who want the ability to integrate systems from different suppliers. It puzzles me that Anduril has changed its philosophy on this. Perhaps cruise missiles don’t need to integrate perfectly with other Anduril products. Or perhaps the European defence spending increase has convinced them to loosen the reins a little. US Space Force practises orbital warfare The US Space Force is currently carrying out its largest exercise since being established, with a service-specific operation meant to see how it can handle complex conflicts in space. This tells us about the institutional evolution of the Space Force. Military power has always followed the emergence of new domains - land, sea, air, cyber - and space is no exception. But while previous domains matured over centuries or decades, the strategic landscape in orbit is shifting within a few short years. That is a reflection of the threat environment - the US Space Force is rehearsing a future in which space is a contested battlespace. China has demonstrated co-orbital ASAT capabilities and is building a layered, state-integrated space strategy; Russia has long maintained the doctrine and tools for space denial. Both are signalling clearly that they view space as a critical warfighting domain. At some point Europe will also need to catch up. NSSIF receives funding I wrote recently that, tucked away on p43 of the recently released Modern Industrial Strategy, NSSIF has been granted a £330m uplift in funding. My almer mater in national security investing, NSSIF does a lot of valuable work that nobody ever hears about - for good reason. Politico is the first news organisation to get inside access to the fund. Read more about it here. FUNDRAISING Hadrian, an American builder of automated factories to produce precision parts for aerospace and defence, raised a $260m round co-led by Founders Fund and Lux Capital. QuNorth, a Danish developer of scalable quantum computing architecture by connecting multiple smaller quantum processors into one unified system, raised an €80m round co-led by EIFO and the Novo Nordisk Foundation. Firestorm Labs, an American builder of customizable 3D-printed drones and related software for military and defence customers, raised a $35 million Series A round and $12m in debt. The equity piece was led by New Enterprise Associates. Rune Technologies, an American builder of military logistics with AI-enabled predictive software designed for the modern, contested battlefield, raised $24m in Series A funding. The round was led by Human Capital. FlyGuys, an American provider of aerial data collection services using drones for customers in industries like construction, energy, and insurance, raised a $13m Series A-1 round led by Wonder Fund North Dakota. Auriga Space, an American company developing an electromagnetic launch system that aims to replace traditional rocket boosters by catapulting small spacecraft into orbit using ground-based electric tracks, raised a $4.6m seed round led by OTB Ventures. Chariot Defense, an American builder of hardware and software to help military forces secure and manage battlefield power infrastructure against physical and cyber threats, raised an $8m seed round co-led by General Catalyst and XYZ Venture Capital. BQP, an American developer of quantum-powered simulation tools to help aerospace and defence teams test and improve designs without needing physical prototypes, raised a $4.9m seed round led by Monta Vista Capital. Apolink, a space-tech company keeping satellites connected 24/7, raised a $4.3m seed round at a $45m valuation. Firefly Aerospace, an American developer of novel spacecraft last valued at $2bn in November, filed for an IPO.
THOUGHT For 150 years, economic growth tracked energy use almost perfectly. Until it didn’t.
Around 1970, the link broke. We moved into a services economy that delivered stability, but not acceleration. AI could change that. Not by making workers more productive, but by turning power directly into cognition, just as steam once turned power into motion. An interesting piece by long-time TWIDU reader Henry Gladwyn. Thank you for reading this newsletter.
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