Helsing, a German defence technology company, is on course for an $18 billion valuation, making the company one of Europe’s most valuable startups. The valuation represents a substantial increase for the company from a year ago when it was sitting at a $14 billion valuation.

Helsing develops AI software to analyse battlefield data, and also manufactures kamikaze drones that explode on targets. Additionally, the company has expanded into autonomous underwater vessels and unmanned aircraft, having partnered up with established European defence contractors.

Analysis

The funding round - so how much money Helsing was seeking to expand business operations - was vastly oversubscribed. This demonstrates strong investor enthusiasm for defence technology following a trend of geopolitical tensions. In particular, Helsing has secured a €269 million contract to supply drones to German armed forces, with the potential for additional orders worth over a billion euros.

This is significant because for decades European defence budgets declined following the Cold War’s end as this money was redirected toward social programmes. The Russia-Ukraine invasion shattered this consensus, making European countries realise that they require credible military deterrence.

What does this mean for the defence and technology sector?

• Defence technology investment is shifting from typical large contractors to innovative startups that are developing AI, drones and autonomous systems

• High valuations reveal opportunity but also warn of a bubble that may burst if battlefield limitations are discovered or geopolitical tensions suddenly ease Sovereignty concerns are driving

• European governments to support domestic defence technology despite superior offerings from US firms