This Week in Dual-Use

NEWS

Anduril pauses production of wingman drone

Anduril has said that it cannot begin production of its FQ-44 Fury under the Collaborative Combat Aircraft (CCA) contract until Congress passes a 2027 defence budget. The contract was awarded in June but so far Anduril has only built prototypes.

CCAs are the semi-autonomous drone fighters which could bolster crewed fighter jets. The objective is for them to cost less than $20M each (whereas an F-35 costs around $100M).

Anduril’s pitch has always been that it builds product first then finds a customer. It inverted the traditional defence procurement process with this approach, and inspired a wave of entrepreneurs to begin building in defence tech. It has just beaten Boeing, Lockheed and Northrop to the become the first new entrant to win a fighter programme since the 1970s.

So how did Anduril end up here? Because at some point the product-first model has a ceiling, and it seems that a CCA sits above it. Unlike a relatively inexpensive drone, which can be built on spec and sold in batches, the CCA programme needs approval from Congress.

That is a conundrum for Anduril. Much of its current $60B valuation must surely be underpinned by the planned expansion into fast air. That is where the really big defence budgets sit. In the US and elsewhere. And also where the traditional primes are most dominant.

The situation raises a few questions. When does a neoprime become, just, a prime? Does the product-first model actually transfer to exquisite platforms, or only to attritable ones? And is there a version of this where the neoprime changes the customer rather than the customer changing the neoprime?

American defence focuses on interceptors

At the same time, Anduril continued to do what it does best by unveiling a new interceptor, Steelfin, at AUSA. It features a two-stage architecture pitched at a fraction of Patriot and THAAD cost. And is compatible with Patriot launchers.

On the same day Lockheed answered with the PAC-3 Edge missile, a more capable Patriot that it has developed with its own cash (the Anduril playbook). CHAOS Industries launched VESPID, a low-cost interceptor for group 1-3 drones. And Raytheon unveiled a rocket-powered Coyote it has flight-tested on its own money.

Meanwhile the Pentagon has just signed a $24B contract with Raytheon for SM-6 interceptors and agreed up to $6.3B to restart SM-3 IB interceptors, a missile it planned to stop buying two years ago.

The interceptor shortage has become the most contested product category in American defence. And it tests the procurement system fundamentals discussed above. Incumbents are being paid record sums for 1990s designs while four companies pitch replacements with no production contracts.

In the near term at least, demand is unlikely to abate. The question is whether the current US administration will allow them to go to Ukraine.

NATO’s drone problem is now inside NATO

Meanwhile Six Turkish military drones entered Greek-claimed airspace over the Aegean, the latest in near-daily incidents this month.

I’ve written about Turkey as the Gulf’s new arms dealer and as a founding HALO member. Now its drones are testing the airspace of a fellow ally, at the moment the alliance is building a counter-drone marketplace against Russia.

It questions what NATO’s Drone Edge marketplace is for when incursions on NATO’s southern flank come from a NATO member.

FUNDRAISING

DEFENCE

Fortem, an American developer of counter-drone technology, raised a $50M Series B led by Lockheed Martin.

Furientis, an American developer of low-cost missile interceptors, raised a $25M seed round led by Benchmark.

Aventra, an American developer of balloon-deployed glide bombs, raised $17.5M led by Konvoy Ventures.

Buntar Aerospace, a Ukrainian developer of reconnaissance drones, raised a $16M round led by Freedom Fund.

Minerva Humanoids, a German-American builder of humanoid robots, raised a $10M pre-seed led by General Catalyst.

Osavul, a Ukrainian developer of hybrid threat intelligence technology, raised a $10M Series A led by 33N.

Laki Power, an Icelandic developer of sensors that monitor high-voltage power lines, raised a €6M Series A led by the NATO Innovation Fund.

Occam Industries, a British developer of software for drones, raised a €3.8M round led by North Ventures.

Monopulse, a Danish-Lithuanian developer of reconnaissance drones and water-based surveillance systems, raised a €2M round.

M-Fly, an Estonian-Ukrainian developer of gimbals for unmanned systems, raised an undisclosed amount led by MITS Capital.

SPACE

Hubble Network, an American builder of bluetooth-connected low-Earth-orbit satellites, raised a $200MSeries C at a $1.6B valuation led by Smith Point Capital.

Kapta Space, an American developer of steerable satellite radar payloads, raised a $24M Series A co-led by Washington Harbour Partners and Bison Ventures.

Hop Aero, an American developer of suborbital cargo rockets, raised an $11M round led by Initialized Capital.

Foundational, a British developer of satellite positioning data technology, raised an £8.2M million pre-seed.

Satlyt, an American-Kenyan developer of software to run AI models on satellites, raised an $8M seed led by Non Sibi Ventures.

Golbriak, an Estonian builder of satellite laser communications systems, raised a €4M seed co-led by Join Capital and PhotonVentures.

Blackswan Space, a Lithuanian developer of payloads for orbital navigation, inspection and servicing, raised a $2.8M seed led by Iron Wolf Capital.

QUANTUM, CYBER & AI

Oratomic, an American developer of neutral atom quantum computers, raised a $475M Series B at a $5.4B valuation.

Universal Quantum, a British developer of trapped ion quantum computers, raised a $100M Series A co-led by DCVC and Firgun Ventures.

Hadrian, a Dutch developer of agentic offensive security, raised a €35.5M Series B led by Forgepoint Capital.

Zenithon, a British developer of design simulation AI models, raised a $10M seed led by Backed.

Fortastra, an American developer of maneouverable spacecraft, raised a $30M Series A led by First In.

Quanfluence, an Indian developer of photonic quantum computers, raised a $10M seed led by Chiratae Ventures.

Osavul, a Luxembourg developer of counter-disinformation technology, raised an €8.5M Series A round led by 33N Ventures.

TigerByte Cyber, an American developer of edge security and post-quantum encryption, raised a $3M seed led by Hale Capital Partners.

GOING PUBLIC

Powerus, a drone company backed by Eric and Donald Trump Jr, went public via a SPAC. It is valued at ~$400M.