Helsing, the defence tech company out of Germany, today cemented its position as Europe’s most valuable privately-held startup in the space with a new funding round. The company today confirmed that it has closed a Series E of $1.8 billion, valuing the company at $18 billion post-money.
The money will be used to continue developing more AI related to defence, more R&D on hardware, and to fill out contracts with its customers, which include a number of countries across Europe and beyond. Germany, its home country, signed a massive framework agreement with Helsing and a competitor, Stark, to supply strike drones and other systems, in a deal that could be work as much as €4.3 billion if fully exercised.
The company’s fundraise is coming at a time when Europe is set to be spending more than ever on defence, both to arm itself against new and present threats, and to update legacy systems.
Ukraine’s war with Russia is now into its fourth year, and the repercussions have been felt across the continent, with countries across the Eastern Flank and beyond preparing for a contagion effect amid current grey-zone actions from Russia already taking place within their territories. Meanwhile, the US, looking to do less in Europe when it comes to defence, has been pressing hard for NATO members to up their own defence spend and, and many (not all) are following through. Combine that with other geopolitical tensions and outright wars, and you have a lot of reasons for why a defence tech company might be seeing a lot of activity and interest right now.
“We’ve been seeing incursions of air territories over various countries, including Poland and Estonia,” Torsten Reil, Helsing’s co-founder and co-CEO, said at Resilience Conference in October. “What’s been happening with drones entering areas that they shouldn’t [be in] has started to sharpen people’s minds.”
Indeed, in the case of this fundraise, Helsing in particular has been one of the big benefactors of that shift. It noted that investor demand “significantly exceeded” the available allocation of shares.
For some more context, the round has been in the works for months, and a report in the Financial Times two months ago indicated that it was close to closing in on $1.2 billion at an $18 billion valuation. The fact that the valuation has stayed level at $18 billion but now with $1.8 billion raised gives Helsing more runway at a time when it is still chasing profitability. It also means investors (including existing investors such as the company founders and earliest investors) were willing to take more dilution to be in on the round and to get it over the line.
The company did not disclose any financials with the announcement and we do not know if it’s profitable.
Helsing may be among the largest of the lot and more likely to be described as a “neo-prime” alongside US defence tech company Anduril, but it is not the only defence tech seeing a lot of investor action right now. In the last couple of weeks, Kraken announced $175 million in funding at a $1 billion valuation; Dominion Dynamics raised $100 million at a $400 million valuation; Quantum Systems raised $1.2 billion valuing it at $8 billion; and Stark raised $570 million (€500 million) valuing it around $3 billion.
Helsing did not name a lead investor in this round but we understand that Dragoneer Investment Group took the largest share of this Series E. Other new and existing backers named in the Series E include Lightspeed Venture Partners, Disruptive, Iconiq, Growth Equity at Goldman Sachs Alternatives, JPMorganChase, Canada Pension Plan Investment Board (CPP Investments), General Catalyst, Plural, and Stepstone. Others that have backed the startup previously but are not in this round include Prima Materia, Accel, and Greenoaks.
Prima Materia, the VC co-founded by Spotify’s Daniel Ek, was the first to back the company, and it also led the company’s last round, a year ago, when it raised $600 million at a $14 billion valuation.
The fact that its board remains unchanged with this investment is notable. Daniel Ek and Tom Enders are still the co-chars, with other members including Jeannette zu Fürstenberg, Denis Mercier, and the company’s founders Gundbert Scherf (Co-CEO), Torsten Reil (Co-CEO), and Niklas Köhler (president).
The investment caps off a strong six months for the company. In addition to sealing the deal on the big contract with the German military, it also announced a new AI attack platform, a robotics initiative, a JV with space company OHB alongside other efforts to expand its business in the space domain.
