This Week in Dual-Use
NEWS
RAF creates squadron to defend British satellites
The RAF has created No. III Space Effects Squadron, its first dedicated unit to counter hostile threats to UK satellites. The squadron will protect the critical satellites that guide ships, connect mobile phones and warn of missile attacks, amongst other purposes.
In last week’s newsletter there were a large number of fundraisings for space technology companies. I expect that pattern to persist. SpaceX has democratised space technology by massively reducing the cost of launch. And so we have more assets in space.
The Space Shuttle cost ~$54,000/kg (the last shuttle flight was in 2011). Rideshare on a Falcon 9 costs $7,000/kg. SpaceX doesn’t sell rideshare on Falcon Heavy but the overall cost is ~$1,520/kg. Starship is estimated to reduce that further to ~$500/kg, although it will spend its early years mostly flying Starlink V3.
Space technology is increasingly foundational to modern life. Satellites set the time on your smartphone and tell your Uber driver where to pick you up. They enable weather prediction, provide internet in remote regions (and also now on planes), and are fundamental to intelligence and security. A truly dual-use technology.
But they are also an increasingly large surface area of vulnerability. As such, the UK government has concluded they should be protected. That is a cost for government and an opportunity for the private sector.
America builds missiles for Soviet launchers
The State Department cleared a $2.7B air defence package for Ukraine that includes a line item labelled S-300 Clone. That is an American-designed interceptor built to fire from Ukraine's Soviet-era S-300 launchers, which are plentiful but starved of missiles (since the only factory which made the original missile is in Russia).
Europe is footing most of the bill, with the US contribution counted against the Ukraine Reconstruction Investment Fund, reimbursed one for one.
Ukraine has been asking for a licence to build Patriots since the spring and got Raytheon representatives in Kyiv instead. Meanwhile the US can’t spare the Patriots and can’t build them fast enough.
Adversarial defence technology has broken the Cold Ware policy of arming your allies with your own kit. Russia is currently pummelling Kyiv with thousands of drones and missiles. So the quickest route to more air defence is to design a missile for launchers that Russia built.
Finland asks Musk to unlock Starlink
Helsinki has publicly urged Musk to permit Starlink use for operations against Russia, echoing Ukraine's August request to fly Starlink-guided drones deep into Russian territory.
Finland only joined NATO in 2022, after Russia’s full-scale invasion of Ukraine. It had spent that previous eight decades in neutrality, cautious of provoking Moscow under the 1948 Treaty of Friendship that gave the world the term "Finlandisation".
It shares 1,340km of border with Russia, compared to Ukraine’s roughly 1,970km, and ceded 40,000 km² of territory to it during the Winter War of 1939 to 1940.
But what’s interesting here is perhaps not the reversal of Finland’s posture, but the petitioning of Elon Musk by a(nother) nation state for the use of his satellites.
Advances in military technology have made internet connectivity vital to defence. Over Russia, Starlink is the only answer, for the moment at least.
That is why middle powers have created HALO, an agreement to pool satellites into one single networked constellation. For Europe and Ukraine, alternatives to Starlink can’t come fast enough.
FUNDRAISING
DEFENCE
Quartermaster, an American developer of maritime activity analysis technology, raised a $140M Series B comprising ~$100M in equity and $40M debt. The equity financing was led by Insight Partners.
Pilgrim, an American developer of bio threat detection technology, raised a $25M round led by Buckley Ventures.
TERASi, a Swedish developer of resilient communications, raised an €11M seed co-led by NATO Innovation Fund and Join Capital.
Freya Systems, a Swedish developer of drone-detection sensors that also locate the pilot, raised an SEK 6Mround from Foundry Ventures, Longswan Ventures, Propel Capital, Saminvest, Sting and others.
KVector, a British developer of metamaterial beam-steered antennas that match phased arrays at lower weight and power, raised £3.8M from Midlands Mindforge, Mercia and UKI2S.
SPACE
Space Epoch, a Chinese launch company, raised ¥2.3B ($343M) including its recently announced Series B++.
HEO Space, an Australian space imaging startup, raised a $37M Series B led by Beaten Zone Venture Partners.
QUANTUM, CYBER & AI
Mesa Quantum, an American developer of chip-scale quantum sensors, raised an $11.8M round led by Playground Global.
GOING PUBLIC
Nscale, a British AI infrastructure company spun out of crypto miner Arkon Energy, secured $3.36B in convertible financing ahead of a planned US IPO.