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NEWS Israel copies Ukraine in remote drone attack Echoing Ukraine’s attack on Russian airfields last week, Israel’s attack on Iran this week also appears to have used pre-positioned consumer-grade drones (as well as more traditional systems). Mossad apparently built a covert drone base in Iran and smuggled components into the country over a long time period. A week ago, Ukraine’s ‘spider web’ operation seemed like a masterful one-off, over 18 months in the making and likely difficult to repeat. But was it the beginning of a trend? Since both Ukrainian and Israeli operations took over a year to prepare, we can conclude that they were conceived independently of each other. What does this tell us about the future of war? First, don’t expect to see a global uptick in trucks full of drones being sent across borders. Israel and Ukraine, by dint of their diminutive stature compared to their adversaries, are unique in their development of remote strike capabilities. Indeed Israel pioneered the remote strike concept with its pager attack on Hezbollah last year. Second, the defensive measures of a given country must evolve to include in-country counter drone defences. What makes these attacks so difficult to prevent is the fact that they’re launched from deep within a sovereign territory. Unlike a missile attack or bombs dropped from a plane, remote drone attacks have the element of surprise. They are also devastatingly accurate, as each drone is individually piloted to its target. Governments will have to think carefully about how they defend against this type of threat. European Space Agency wants its own satellites The European Space Agency (ESA) is seeking €1bn to develop a new satellite network providing military-grade intelligence to the EU as it prepares to push for the biggest budget in its 50-year history. Space is big money these days (see the numerous space companies below which raised funds last week). The plummeting cost of launch, enabled chiefly by SpaceX, has created a huge opportunity to put things in orbit. Since the Cold War and until recently the space domain has been dominated by government-funded programmes like NASA. It was so expensive to launch anything that only nation states and a handful of large companies could afford to put satellites in space. That has changed. The result is an explosion in space-based technologies and startups competing to provide them. J.D. Vance will be pleased to hear the ESA announcement. Since the Munich Security Conference, Europeans have increasingly sought technological sovereignty from the US - as he wisely counselled. We owe him a debt of gratitude. Helsing becomes a decacorn Helsing, a German developer of defence tech, has just raised €600m at a €12bn valuation. That makes it one of the 14 most valuable companies in Europe and pits it squarely against Anduril, an American version of Helsing, recently valued at $30.5bn. There was a time when these companies would already be public. But that was in the old world, when going public was a mark of maturity rather than a strategic liability. Private capital markets have grown so much that it is easier for Helsing to raise €600m privately. It is also unlikely that public markets would value it so highly. I don’t know what its revenues are, but they probably wouldn’t justify an eleven-digit valuation. Investors and operators in Europe love to hate Helsing. But Helsing is exactly what Europe needs. Defence primes have traditionally been valued at low revenue multiples - between 1x and 2x revenues. Their model of cost-plus contracting means that their margins are slim and growth is slow. That makes them poor acquirers of highly valued defence-tech startups - why would they pay 10x revenues for a company only to immediately destroy that value once it is subsumed and valued at 1-2x? Now Helsing has the firepower to acquire those companies, which are valued at similar multiples. This has been the dynamic for software companies for years, but is only just emerging in defence-tech. VCs and founders alike should be glad to hear the news. FUNDRAISING Helsing, a German defence tech company, raised €600m in a fundraise led by Daniel Ek’s investment firm, Prima Materia. Ek, the founder of Spotify, was one of the first investors in Helsing. The round values Helsing at €12bn. Voyager, an American developer of space and defense technology solutions, raised $383m in an IPO. The share price more than doubled on the day of the IPO. Muon Space, an American developer of mission-optimised satellite constellations, raised a $146m Series B round, led by Congruent Ventures. Gecko Robotics, an American builder of robots and software that help defence, and manufacturing companies inspect and monitor critical infrastructure, raised a $125m Series D round at a $1.25bn post-money valuation. The deal lead was Cox Enterprises. Mach Industries, an American developer of unmanned aerial systems for defence, raised a $100m round at a $470m valuation. Khosla Ventures and Bedrock Capital were the co-leads, with Sequoia Capital also participating. Look Up Space, a French developer of a global network of ground-based radar and digital tools that detect, track, and analyze satellites and debris in orbit, raised a €50m million Series A round led by ETF Partners. Quantum Space, an American developer of a space vehicle that can maneuver, refuel satellites, and carry payloads, raised a $40m Series A extension round led by Prime Movers Lab. Aethero, an American develoeper of high-performance space-rated computers that let satellite operators and aerospace companies process data and run AI directly in orbit, raised a $8.4m seed round led by Kindred Ventures. Arlequin AI, a French developer of AI-based tools that help government agencies and large organizations analyze data to detect disinformation and understand public narratives, raised a €4.4m seed round led by Vsquared Ventures.
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