This Week in Dual-Use
NEWS
BAE’s wingman drone
Last week I had coffee with Ben Moores, recently Procurement Advisor to the Defence Secretary. During a wide-ranging discussion we touched on Anduril’s valuation and how the public markets might eventually react to it. It is currently $60B and could soon be $100B.
To put that in context, Lockheed Martin’s market capitalisation is $135B and it generated $75B of revenue in 2025. Anduril reported $2.2B of revenue for 2025. So what’s driving its valuation?
Ben’s view is that Anduril’s CCA (Collaborative Combat Aircraft) could be a primary revenue driver for the company, due to the size of the existing crewed market it aiming to disrupt. It only needs to carve out a small slice of that to dramatically increase its revenues.
And so it was with interest that I watched the unveiling of BAE’s new CCA at Farnborough Air Show last week. They have dubbed it Brontanax, which translates to “thunder king” in Ancient Greek.
What is interesting about the CCA is that it inhabits the narrow middle of a Venn diagram of products which might be developed by traditional defence primes but also by neoprimes. It is an exquisite capability costing in the tens of millions, but one which requires a novel autonomy stack to function properly.
Competition for the CCA market is already fierce. Some companies developing them in North America are: General Atomics, Lockheed Martin, Boeing, Northrop Grumman, Anduril and Dominion Dynamics. In Europe so far only Helsing and Airbus have thrown their hat into the ring. And now BAE.
The technology is still nascent but it seems certain to be a battle-winning capability. Or at least a capability which developed nations cannot afford not to have. China has been developing its own for over a year already.
Which brings us back to Anduril's valuation. If the CCA thesis is right, $100B prices in a slice of the crewed fighter market, the most valuable franchise in defence. Lockheed's market cap suggests investors have yet to work out which side of that trade they are on.
Ukraine to manufacture Patriot missiles
There was a time, quite recently, when politicians ran scared of escalation when committing defence capability to Ukraine. No longer. Volodymyr Zelenskyy says he recently met with representatives of Raytheon in Kyiv to discuss joint production of Patriots.
Additionally, France has authorised licensed manufacture of AASM bombs, SCALP missiles and Aster 30 air-defence missiles to Ukraine. And BAE Systems signed a smaller Light Gun licensing deal with the country.
Why are defence primes suddenly piling into Ukrainian partnerships and licensing agreements?
The answer lies in two parts. Now that a Russian victory doesn’t look so certain, the Trump administration is starting to lend greater support to Ukraine. Second, commercial logic is playing out - it makes sense to create production where demand is greatest.
Meanwhile Russia has asked North Korea to send another 30,000 troops. There is much talk at the moment of whether the tide is turning in Ukraine. I am hesitant to make such a bold claim, but there is much to be hopeful about. This latest request from Putin certainly adds credence to the idea.
Russian drone that flies itself
A recovered Russian Molniya strike drone carried no control antenna, only a camera and an onboard computer, pointing to autonomous navigation and attack that cannot be jammed. Photographs of the recovered aircraft show a FlyCore board, a hardware platform built for onboard AI and computer vision.
Ukraine has built electronic warfare into a battlefield equaliser. Cheap jammers disable cheap drones. Take away the control antenna and there is nothing to jam. Navigation, target search and the terminal run all happen onboard with no emissions.
The answer will be to shoot it down. In late June, Ukrainian units achieved the first confirmed kills of the AI variant using General Cherry interceptor drones. It works, but it is harder and riskier than jamming, and every kinetic intercept costs more than the UAV it destroys.
This is the cost-asymmetry problem I keep returning to, now running in reverse. For two years, autonomy was mostly a Western and Ukrainian story: the Bounty Hunters, the Hornet, terminal-guidance FPVs that finished their runs without an operator.
The new Molniya is the same idea reaching mass production, deployed ten at a time by the 50th Unmanned Systems Brigade.
Jam-proof autonomy is no longer a frontier capability. And the electronic warfare advantage that defined the middle years of this war is decaying. What replaces it is a straight kinetic race, cheap drones against slightly less cheap interceptors, and whoever can iterate faster.
FUNDRAISING
DEFENCE
Antares, an American developer of military-focused micro reactors, raised a $470M Series C co-led by Caffeinated Capital and Paradigm.
Defense Unicorns, an American developer of secure cloud and air-gapped software environments, raised a $136M Series B, lifting its valuation past $1B, thereby fulfilling its destiny.
Istari Digital, an American developer of software that tests and certifies defence systems as virtual models, raised $22.6M.
Andrenam, an American company developing underwater sensors, raised an $18M Series A led by Upfront Ventures.
ASIO, an Israeli developer of tactical intelligence systems, C2 platforms, and jam-resistant navigation, raised a $15M seed led by Protego Ventures.
FPF Defense, an American C-UAS company, raised a $10M seed co-led by RSE Ventures and Ondas.
Askari, an American developer of hand-launched drone interceptors for dismounted troops, raised a $9M seed led by Builders VC.
SPACE
SWISSto12, a Swiss satellite builder, raised a $70M Series C.
LegendSpace, a Chinese developer of AI-driven rocket engines, raised a $29.5M round.
Array Labs, an American developer of space-based radar, raised a $21M strategic funding round led by Mitsubishi Electric Corporation.
FLEXELL Space, a Koran developer of lightweight, flexible, tandem perovskite and CIGS solar cells, raised a $20M Series A led by Mirae Asset Venture Investment.
Beyond Reach Labs, an American developer of space power technology, raised a $10M seed from Interlagos, Y Combinator and others.
VXB, an American developer of space hardware, raised a $4M seed led by Dauntless Ventures.
QUANTUM, CYBER & AI
Cathedral, an American developer of AI for military cyber operations, founded by DOGE alumni, raised a $160M round at a $1.4B valuation. The deal was co-led by Andreessen Horowitz and Sequoia Capital.
Ossprey, a British startup that detects malicious code hidden in open-source software packages before it reaches production environments, raised a £2M pre-seed led by Episode 1 Ventures.
THOUGHT
An excellent piece by Henry Gladwyn on the distillation of AI by Chinese labs, and how to solve the problem. About a 4 minute read.