Drone start-up Helsing set for $18bn valuation as investors pile into defence
German company backed by Spotify’s Daniel Ek set to raise $1.2bn in latest funding round
Helsing, the German defence technology group backed by tech billionaire Daniel Ek, is set to raise new funding at a valuation of about $18bn, cementing its status as one of Europe’s most valuable start-ups.
The $1.2bn fundraising is being led by US firm Dragoneer Investment Group, with existing backer Lightspeed Venture Partners acting as co-lead, according to people familiar with the matter. The plans are at an advanced stage but the timing has not yet been finalised, they added.
Helsing’s funding round is the latest indication of investors’ enthusiasm for the defence sector. Private investment has surged on the promise of higher military spending by Europe’s governments following Russia’s full-scale invasion of Ukraine in 2022. The conflict and the proliferation of drones have also spurred changes in battlefield technology.
The valuation marks a substantial increase from less than a year ago, when Helsing raised €600mn in a deal led by Spotify founder Ek’s investment company Prima Materia at a €12bn ($14bn) valuation.
The money pouring into drone developers has prompted some established defence industry players, such as Rheinmetall chief executive Armin Papperger, to warn of a “bubble” in the sector.
But others say that European governments continue to invest too much in “legacy” technology such as conventional tanks and fighter jets, arguing that there should be more investment in unmanned systems and other innovative technologies.
The latest Helsing fundraising was oversubscribed multiple times, said the people familiar with the matter, highlighting investor interest in a new generation of defence start-ups focused on integrating AI into weapons systems.
Europe boasts several defence tech unicorns — start-ups valued at more than $1bn — including drone makers Quantum Systems and Tekever.
Helsing’s competitors include US-based Anduril Industries, founded by billionaire war drone maker Palmer Luckey, which has held talks with investors about a new funding round at a valuation of more than $60bn. In Europe, it vies with companies such as Quantum Systems and Stark, which is backed by US tech billionaire Peter Thiel.
Founded in 2021, Munich-based Helsing originally focused on producing AI software to analyse battlefield data and improve military decision-making.
It has expanded into producing its own kamikaze drones — single-use machines designed to fly into a target and blow it up — and autonomous underwater vessels.
It has also struck partnership deals with some of Europe’s established defence contractors including Sweden’s Saab. It is also working on an unmanned aircraft designed to fly alongside crewed fighter jets.
Helsing has at times faced questions about its products. Its first kamikaze drone, a model called the HF-1 made in collaboration with a Ukrainian partner, drew criticism in Ukraine over its performance and price.
Its successor model, the HX-2, has been approved for frontline use by Ukraine’s military, according to Helsing, which said it had been successfully hitting Russian targets.
The company was recently praised for its work in Ukraine by Oleksandr Kamyshin, an adviser to President Volodymyr Zelenskyy on strategic industries, including defence.
Helsing has also been selected to supply drones to the German armed forces in a deal worth an initial €269mn, with an option of providing more HX-2 drones with a total value of up to €1.46bn in the future.
While Helsing’s new funding round is led by US investment firms, the group remains nearly 80 per cent owned by Europeans, one of the people familiar with the fundraising process said.
The group has previously been backed by investors including Accel, Plural, General Catalyst, Greenoaks, Saab, and BDT & MSD Partners.
Helsing declined to comment. Dragoneer and Lightspeed did not respond to requests for comment.