This Week in Dual-Use

I was at the Munich Security Conference last week. There was a palpable difference in tone compared to the year before. Despite the relatively conciliatory speech by US Secretary of State Marco Rubio, Europe is now firmly in a ‘post-Greenland’ mentality.

Admittedly we are not yet ‘post-Greenland’ as the issue may rear its head again at any moment. But that is kind of the point.

Unsure if they can trust the current US administration, heads of state across Europe are beginning to pour money into defence. Of course that is the desired outcome for the Whitehouse. But it will come at the cost of the European market for some American companies as the continent looks to ‘buy European’ where it can.

To succeed in Europe, American defence tech companies must now strike a delicate balance of branding and relationship building. They will need close relationships with European investors to access important customers, in addition to people on the ground in key geographies.

I expect that over the next two decades Europe will rebuild its defence industrial architecture. Defence spending will rise in inverse correlation with the distance of a capital from Moscow. Poland will hit 4.8% of GDP in 2026, for example. And the centre of gravity for defence tech companies will shift eastwards.

That is a conundrum for the UK, which produces some of the best companies in the sector. Its commitment to defence spending of 3.5% by 2035 is not serious. It must urgently revise this if it wants to retain talent and be part of a more sovereign European defence ecosystem.

NEWS

SpaceX blocks access to Starlink for Russian military

Elon Musk acted on a Ukrainian request to curtail access to his network, which Russian soldiers had been using illicitly. This follows the news that Russia had been fitting Starlink terminals to Shahed-type drones.

It continues to amaze me that nation states are beholden to the whims of a capricious American billionaire for this critical technology. Four years after turning on Starlink for Ukraine, Musk has now turned it off for Russian soldiers. Ukrainians are presumably thankful for his benevolence.

The problem is that no one knows how long the benevolence will last. Europe is building a LEO constellation of its own, Eutelsat, but it is significantly smaller than Starlink and depends on SpaceX for launch.

But Elon Musk is a product of our time. Where before rockets and satellites were part of government space programmes, now private capital is shaping the space sector. And various billionaires sit atop technologies capable of influencing battlefield outcomes.

Meanwhile China has developed a ‘Starlink killer’ microwave weapon capable of minute-long bursts for frying satellites. And Russian spy spacecraft have intercepted European communication satellites. The race for space is on.

Ukraine opens weapons export centres across Europe

Ukraine announced plans to open 10 weapons export centres across Europe in 2026, reinforcing the ‘Build with Ukraine’ co-production arrangements announced at the end of last year.

One of my predictions for 2026 was that Ukrainian defence tech would begin to dominate the global defence tech market. The establishment of these hubs in the Nordics-Baltic region, Europe’s most proactive defence spenders, suggests a future where Europe’s ‘drone wall’ is built on Ukrainian foundations.

Indeed Uforce, a Ukrainian developer of autonomous technology, was one of the prominent companies at Munich Security Conference. It can offer capabilities proven on the battlefield, such as the Magura USV - famous for sinking half of the Russian Black Sea Fleet.

I expect to see more Ukrainian companies coming to market in 2026. The country is setting out its stall as a security provider, rather than a security consumer. With its pedigree in novel defence technologies that makes a lot of sense. And the new €90bn EU loan to Ukraine will help to fund its domestic champions.

FUNDRAISING

Stark, a German developer of autonomous systems, raised an undisclosed amount at a valuation north of €1bn.

Quantum Systems, another German developer of autonomous systems, secured €150m in financing from EIB, Commerzbank, KfW and Deutsche Bank.

Stoke Space, an American developer of space launch technology, added $350m to its recent Series D.

Axiom Space, an American developer of a commercial space station, raised a $350m round led by Type One Ventures.

Ignium, an American defence-focused merchant provider of weapons-system subsystems, raised a $300m round from Albion River.

Skyryse, an American developer of flight autonomy technology, raised a $300m Series C led by Autopilot Ventures, bringing its valuation to $1.15bn.

ICEYE, a Finnish/Polish developer of space-based synthetic aperture radar (SAR), raised a €150m Series E led by General Catalyst.

Machina Labs, an American company building a metal manufacturing platform for defence, raised a $124m Series C co-led by Lockheed Martin Ventures and Woven Capital.

Onodrim Industries, a Dutch developer of a defence industrial platform, emerged from stealth with €40m in seed funding led by Founders Fund, with participation from Expeditions.

Constellr, a German developer of thermal satellite imaging technology, raised a €37m Series A led by Alpine Space Ventures and Lakestar.

Forerunner, an American company developing a platform to transform how governments manage their built environment, raised a $39m Series C led by Wellington Management.

JJG Aero, an Indian manufacturer of aerospace components, raised a $30m Series B led by Norwest.

Hypersonica, a German developer of hypersonic missiles, raised a €23.3m Series A led by Plural.

Terra Industries, a Nigerian developer of autonomous systems, raised a seed round extension of $22m led by Lux Capital.

Integrate, an American developer of collaboration software for government and defence projects, raised a $17m Series A led by FPV Ventures.

Hades, a German developer of technology to extract critical minerals from deep rock formations, raised a €15m round led by HV Capital.

Morpheus Space, a German developer of modular electric space propulsion systems, raised a $15m Series A+ led by Alpine Space Ventures.

Tenna Systems, an Israeli developer of electronic warfare technology, raised a $13.5m seed round led by Costanoa.

Vexlum, a Finnish manufacturer of semiconductor lasers for quantum, space, and optical markets, raised a €10m seed round led by Kvanted.

Apeiron Labs, an American developer of uncrewed underwater vehicles (UUVs), raised a $9.5m Series A co-led by Dyne Ventures and S2G Investments.

Stanhope AI, a British developer of AI for autonomous systems based on active inference, raised an $8m round led by Frontline Ventures.

Uplift360, a British developer of advanced materials, which aims to transform how defence and industrial sectors recover and reuse high-value composite material, raised a €7.4m seed round led by Extantia.

Iceberg Quantum, an Australian developer of fault-tolerant quantum architecture, raised a $6m seed round led by LocalGlobe.

Galadyne, an American developer of new missile architecture, raised $4.8m in pre-seed funding led by A16z.

Occam Industries, a British developer of autonomous drone software, raised a €3m seed round led by Presto Tech Ventures.

Whitespace, an American company developing an intelligence analysis agent for defence, raised a $3.2m seed round led by MaC Venture Capital.