This Week in Dual-Use

I write this week’s newsletter from the Reveille conference in Australia. It’s a country that has always punched above its weight in defence and security, and is now witnessing a proliferation of high-quality founders in the sector.

The conversation is a bit different to what I’m used to in Europe. A retired Australian Army officer told me last night that he didn’t mind JD Vance’s anti-European stance if it meant that the US might (finally) pivot to Asia. A reminder, were it needed, that foreign policy priorities are often a simple question of geography.

NEWS

Isar Aerospace successfully reaches orbit

Isar Aerospace, a German space launch company, became the first privately developed European launch capability to reach orbit from continental Europe.

For years it has been difficult to get excited about European launch, overshadowed, as it has been, by SpaceX’s dominance of the market.

Remember Virgin Orbit? It spun out of Virgin Galactic in 2017, floated on the Nasdaq at a $3.5B valuation, then lost its LauncherOne rocket on its maiden flight from Spaceport Cornwall in January 2023. Three months later the company filed for bankruptcy.

Then Rocket Factory Augsburg, a German company launching from the Shetland Islands, lost its entire first stage in an explosion on the pad in August 2024.

So it was with some relief that Europeans woke on Monday to the news of Isar’s successful launch. There is now light at the end of the tunnel for European launch capability. And the possibility of being slightly less reliant on SpaceX.

Not least because PLD Space, a Spanish space launch company, this week added €108M to its Series C and secured a European Launcher Challenge contract. Its first flight is planned for late 2026.

Of course it will take some time for Europe to build up to the launch cadence of the US or China. And perhaps more time to achieve the $/kg currently offered by SpaceX. But the trajectory is now clear. And investor appetite for European launch technology is there.

To quote Howard Lutnick (a person I don’t often quote): “The time to be bold is now, and the place to be bold is space.”

UFORCE fits interceptor drones to its USV

UFORCE, a British/Ukrainian developer of uncrewed systems, has fitted Sting interceptors developed by Ukrainian company Wild Hornets on to its Magura naval drone.

I wrote recently about drones carrying drones and the future of drone warfare. This strikes me as a pioneering capability and characteristic of Ukrainian thinking about uncrewed systems.

As the war in Iran continues, Gulf countries like Qatar and Bahrain will want to field this type of capability in the narrow sea that separates them from Iran. It might intercept Iranian drones before they reach the shore, and could even be integrated into the littoral air defence systems of those countries.

Two sabotage attempts on German electricity grid

Germany is investigating two drone-enabled sabotage attempts on its electricity grid, a day after it formally accused Russia of attempting a drone attack on a Ukrainian cargo jet at Leipzig airport.

A reminder that Russia continues to brazenly probe the defences of European countries. Drone technology has made this kind of grey zone activity cheap and accessible for Russia. It can act with relative impunity, safe in the knowledge that European countries are unlikely to escalate. Or to conduct their own sabotage operations in response.

Meanwhile, Polish Prime Minister Donald Tusk said Russia was responsible for a fire at a Polish drone factory supplying weapons to Ukraine, calling it “deliberate arson.” 

OpenAI agents evade human moderators

Independent researchers say another swarm of OpenAI agents spent more than a month collaborating on a little-used German wiki, evading a human moderator, and reaching the open internet without the company’s knowledge. Yes, you read that correctly.

I don’t know what percentage of its cost base OpenAI spends on securing test environments, but it should probably be a lot more. These are not AI agents ‘going rogue’ - they’re simply carrying out their instructions to the best of their abilities, which includes outsmarting human-designed perimeters to their environments.

But spending money on security doesn’t advance the performance of the models. And Sam Altman is incentivised to maximise value for shareholders. That could be a problem.

FUNDRAISING

DEFENCE

AITAN, an Israeli developer of software for deploying and coordinating drones, raised a $41M round co-led by Deep33 and Dell Technologies Capital.

Aslan, an American developer of human-supervised AI agents to infiltrate criminal and hostile online networks, emerged with $20M in funding led by Khosla Ventures.

Ground A, a German developer of laser-based counter-drone technology, raised a €9.1M pre-seed led by Vsquared Ventures.

Critical Materials Group (CMG), an American manufacturer of explosives, raised a $10.3M seed led by Overmatch Ventures.

SPACE

PLD Space, a Spanish space launch company, raised an additional €108M for its Series C led by Mitsubishi Electric.

HyImpulse, a German developer of hybrid-engine launch vehicles, raised a €50M Series A co-led by JOIN Capital and Ace Capital Partners.

InspeCity, an Indian space company focused on satellite life extension and deorbiting, raised a $10.5M pre-Series A, co-led by Speciale Invest and Ashish Kacholia.

QUANTUM, CYBER & AI

Mistral, a French AI company, raised a €3B Series D at a valuation of €21B, led by Samsung Electronics.

BQP, an American developer of a physics-simulation platform, secured a strategic investment from IBM Ventures, bringing its total funding to $8M.

Diffraqtion, a quantum camera company for defence and space sensing, raised an additional $5M from LM Ventures and Presidio Ventures.

Meissner, a Canadian developer of superconducting materials for quantum computing, fusion energy and other applications, raised a $2.6M pre-seed.

S-Transistors, a Finnish developer of superconducting transistor circuits, raised a €2.6M round.