This Week in Dual-Use
NEWS
Quantum Systems considers merger with Stark
Quantum Systems is the OG of drone companies. Founded in 2015, it was flying drones before Russia invaded Ukraine. What is perhaps more impressive is that it has stayed relevant over the course of the last 4 years, maintaining a continuous presence on the Ukrainian battlefield as one of the reference systems for ISR (intelligence, surveillance, reconnaissance).
For that reason, QS always struck me as a company which had great products but was perhaps undervalued. No longer. It just raised $1.2B at an $8B valuation, making it the most valuable European neoprime after Helsing.
According to the Financial Times, QS is considering a merger with its sister company, Stark. Both were founded by Florian Siebel. Stark, founded in 2024, develops the offensive capability that the investors of QS wouldn’t allow.
That merger would be good news for the European defence industry. I suspect we will soon enter a period of consolidation and the resulting competitive tension with Helsing would make for a healthy M&A market.
Bending Spoons IPOs at $25B valuation
Meanwhile Bending Spoons, an Italian company, just went public at a $25B valuation. It isn’t defence oriented but the model is interesting: it buys out old tech companies then it lays off the existing staff and points a turnaround engine at them. Acquisitions include Vimeo, Eventbrite, Evernote and AOL.
There are a number of early-stage companies aiming to deploy the same strategy in defence. Bending Spoons focuses on software companies, but value in the defence industry has traditionally accrued to the hardware layer. It will be interesting to see whether the same principles will apply.
Ukraine opens the shop
On July 1st, Ukraine approved its first formal mechanism for exporting domestically produced weapons and defence technologies. Partner countries that have signed Drone Deal agreements with Ukraine will be able to purchase Ukrainian-made weapons and technologies directly from manufacturers.
I have written before about how Ukraine is likely to become the fulcrum of the European defence industry over the next decade or so. For four years, the direction of travel was one way. Javelins, Storm Shadows, Patriots and Leopards flowed in, and little flowed out.
But now Ukraine is producing over four million drones annually and could apparently double that number with sufficient funding. Of course drones are not everything, but they are a measure of the scale of its defence industry. The war has created an industrial base that now exceeds domestic consumption
With the US stepping back from its role as the purveyor of global security, there is a gap in the market. Already Ukrainian drone and EW specialists have been operating in Saudi Arabia, UAE and Qatar, shooting down Iranian Shaheds and training local forces. And talks are underway with Oman, Kuwait and Bahrain. The arsenal of democracy could be moving eastward.
Starlink discovers gravity
Starlink announced it is exploring a direct entry into the US cellular market, using spectrum acquired from EchoStar earlier this year and building its own terrestrial towers. Its satellites will apparently deal with rural coverage and backhaul duty.
This will be reported as evidence that Starlink is about to disrupt the global cellular industry, but it probably demonstrates the opposite. If satellites alone could deliver a consumer mobile offer, Starlink wouldn’t be building towers.
Satellite constellations are transformative for specific problems: connecting ships, aircraft, battlefields, and the last few percent of difficult-to-reach households. They are probably not a substitute for terrestrial infrastructure.
Then again, founding a space launch company in direct competition with Lockheed Martin and Boeing was also a contrarian play.
FUNDRAISING
DEFENCE
Quantum Systems, a German developer of autonomous systems, raised a $1.2B Series D at an $8B valuation. The round was co-led by Blackstone, Noteus, Airbus and Advent.
Arkenstone, an American builder of back office software for defence tech companies, emerged from stealth with $35M in funding led by J2 Ventures.
StirlingX, a British builder of UAVs, raised a $20M Series A. Investors included Ventura Capital and Rokos Capital Management.
Six Robotics, a Norwegian developer of swarming software for drones, raised a €12M seed led by DTCP.
Askari Defense, an American developer of drone interceptors, raised a $9M seed led by Builders VC.
Surtr, an American developer of software for counter-drone systems, raised a $4.8M seed.
Trinity Robotics, a Ukrainian developer of uncrewed ground vehicles (UGVs), raised a €500K pre-seed led by Front Ventures and Hede Capital.
SPACE
Southern Launch, an Australian developer of spaceport infrastructure,raised a $17.2M Series A led by Brindabella.
FOSSA Systems, a Spanish developer of a sovereign LEO satellite constellation, raised a €9.25M round led by Kibo Ventures.
QOSMIC, an Indian developer of optical satcom systems, raised a $3.33M seed led by Accel and Prosus Ventures.
QUANTUM & AI
Kling AI, a Chinese developer of video AI and subsidiary of Kuaishou, raised a $2.8B round at an $18B valuation.
Oratomic, an American developer of quantum computing technology, founded in 2026, which aims to run Shor’s algorithm for large-scale computation, raised a $300M Series A led by Khosla Ventures.
TwelveLabs, an American developer of a video intelligence platform, raised a $100M Series B co-led by NEA and NAVER Ventures.
Qolab, an American developer of superconducting quantum computers, raised a $54M Series B led by UC Investments.
1001 AI, a Dubai-based developer of sovereign AI for critical infrastructure, raised a $30M Series A led by Lux Capital.
GOING PUBLIC
IQM Quantum Computers, a Finnish developer of superconducting quantum computers, went public via a SPAC at a $1.8B valuation. It is the first European quantum computing company to go public in the US.