This Week in Dual-Use
Iran is to missiles what Ukraine is to drones. Those were the words of my Lebanese friend who sent me a few WhatsApp videos over the weekend. They featured different types of Iranian missile raining down on Israel.
The Islamic Republic appears to have deployed a number of novel systems over the last few days. This week’s newsletter will therefore be an Iran War special edition, covering a few of those new technologies.
NEWS
Iran deploys hypersonic missile
In a video posted on X, Iran appears to have deployed the Fattah-2 hypersonic missile for the first time. While the Fattah-1 was a manoeuvrable re-entry vehicle which followed the trajectory of a ballistic missile, the Fattah-2 is a hypersonic glide vehicle which has a flatter, unpredictable trajectory.
If true, this is something of a game-changer for missile defence. As is obvious from the video, no Patriot missile defence system is able to defeat this capability. That’s because traditional systems are designed to stop predictable threats. Standard ballistic missiles follow a parabolic arc, whereas a Fattah-2 stays within the atmosphere and can apparently manoeuvre to change its trajectory.
Europe, Israel and the US are all developing ‘glide-phase’ interceptors, designed to counter this unique threat. But none of them are operational yet.
This presents a window of vulnerability in which offensive capability is outpacing defensive adaptation. For investors, it underlines a familiar pattern in defence tech: advantage accrues first to the side that shifts the physics of the engagement.
Iran deploys missile swarms
In another video posted on X, Iran appears to have deployed a swarm of missiles in an attack on Israel. It is unclear if these are launched as a swarm or if they deploy from a larger mothership as a cluster of missiles. Either way, the weapon system is capable of overwhelming defences.
While the Fattah-2 seeks to defeat a missile shield with speed, this new weapon seeks to exhaust the defensive stack with volume. Having seemingly learned from the 12-day war with Israel in June 2025, Iran has revised both its weapon systems and its tactics.
Its new tactic is to saturate air defences with missile swarms. Quantity, in this construct, becomes a precision instrument. It is conceived to bankrupt a defender’s interceptor inventory.
As my friend George Hays at Reuters messaged me, this could open up an interesting new C-UAS market in UAE/Qatar etc. And could mean new contracts for European companies developing air defence technology. It will also lengthen the queue of countries ordering Patriots.
Iran deploys Hadid-110 jet-powered drone
The Hadid-110 (also known as the Dalahu) is a significant departure from the more famous "moped” drones like the Shahed-136. It was unveiled in late 2025 and has seen its first combat use in recent days.
While the older Shahed drones rely on slow, noisy piston engines, the Hadid-110 is a jet-powered stealth loitering munition designed for speed and surprise.
What makes this interesting is that Iran has adopted the angular stealth design familiar to us from images of American stealth bombers, but deployed on drones. With a flight ceiling of 30,000 feet, it can fly above the engagement zones of many short-range air defence systems, only diving in the terminal phase of the attack.
This is evolutionary rather than revolutionary, but it is strategically significant: stealth characteristics are no longer the preserve of trillion-dollar air forces.
With low-cost loitering munitions beginning to incorporate these features, the burden shifts back to air defence to defeat them. That is both a technological conundrum and an investment opportunity.
FUNDRAISING
Anduril, an American defence neoprime, is raising up to $8bn at a $60bn valuation, in a deal co-led by Thrive Capital and Andreessen Horowitz.
Shine Technologies, an American company that uses nuclear fusion to test military and aerospace equipment and to produce medical isotopes used to diagnose and treat cancer, raised a $240m round led by NantWorks.
Revel, an American startup that runs a software platform that lets engineering teams configure aerospace, defence, energy, and industrial hardware systems, raised a $150m Series B led by Index Ventures.
Encord, a British/American company that prepares and manages training data for autonomous robots, drones, and vehicles, raised a $60m Series C led by Wellington Management.
Smack, an American frontier AI lab for national security, raised a $32m combined seed and Series A. The seed round was led by Point72 Ventures, and the Series A was led by Geodesic Capital and Costanoa Ventures.
Noda AI, an American startup that orchestrates tactics and decision-making across mixed fleets of autonomous and manned systems for defence operations, raised a $25m Series A led by Bessemer Venture Partners.
Constelli, an Indian developer of advanced defence electronics, raised a $20m Series A led by General Catalyst.
Worldscape.ai, an American developer of geospatial intelligence, raised a $6m seed round led by Scout Ventures.
FlyFocus, a Polish developer of unmanned aerial systems and avionics designed and manufactured in Europe, raised a €4.5m round led by ffVC.
Shearwater Aerospace, an Canadian developer of AI-powered autonomous navigation systems for uncrewed aircraft, raised a $3m pre-seed round.
CORRECTION
I wrote last week that Germany adopted unrestricted submarine warfare in 1914. In fact, it wasn’t until 1917. Thank you to one of my readers for the correction. He notes the following:
“There’s really an innovation story at the heart of this. Basically the brutality of the Western front forced a process of innovation to get away from the front. The tank, aeroplane and submarine were all first introduced in 1917, to punch through, fly over, or go under the lines. The crucible of innovation in WW1 was catalysed by the desire to overcome the human tragedy. And of course, those capabilities would dominate the conduct of WW2.”