Drone start-up Stark wins more funding from Peter Thiel-backed firm
US billionaire’s fund participated in €500mn funding round despite previous criticism of company’s links with financier
A venture capital firm founded by US billionaire Peter Thiel was a leading investor in a newly closed €500mn funding round by German drone start-up Stark, despite previous criticism of the company over its links with the financier.
Thiel’s Founders Fund was one of the backers in the new funding round, announced on Tuesday. The fund played a significant role in the fundraising, according to people familiar with the deal, while California-headquartered Sequoia Capital was also a substantial investor. The new funding round values Stark at €3.2bn.
Both Sequoia and Founders Fund, co-founded by Thiel, have previously invested in Stark, which this year struck a deal to supply its “kamikaze” attack drones to the German armed forces.
Stark told members of the German Bundestag on Monday, in a letter seen by the FT, that “Peter Thiel himself” continued to hold “significantly less than 10 per cent of Stark’s shares”.
The company said that his stake had been “further significantly reduced as a result of this round”, adding that he held no special rights, no supervisory board role, no special voting rights and no access to security-critical technical information or intellectual property.
Stark told the FT that Thiel’s overall shareholding in the company — including all direct and indirect investments — would decrease as a result of the funding round.
The drone-maker said in a statement that it was “a European company, incorporated and headquartered in Europe, with a fully European supervisory board. All its leadership, operations and decision-making are based in Europe.”
It added: “Peter Thiel through his investment holds a single-digit stake. He is not a member of the supervisory board and holds no special rights.
“No individual shareholder has access to sensitive information . . . which [is] strictly subject to applicable legal and regulatory requirements.”
Berlin-based Stark’s decision to take more funding from one of Thiel’s funds comes after the start-up faced a political backlash this year about the role of the libertarian billionaire, who has close links to US President Donald Trump.
German defence minister Boris Pistorius previously said that he had concerns over Thiel’s involvement, saying in February that “we simply need to clarify what influence Mr Thiel actually has”.
Sebastian Schäfer, a Green lawmaker who has previously criticised Thiel’s links to Stark, said that he was alarmed by Founders Fund’s role in the latest round.
“What I hear from companies like Stark is that it’s still very difficult to find money in Europe. But there are alternatives. We see other companies that don’t need his money to scale up and be successful.”
Stark makes armed drones designed to blow up a target on impact and in February was one of three companies awarded a deal — worth roughly €300mn each — to supply the lethal weapons to Germany’s armed forces. The company last year opened a factory in the UK town of Swindon.
Stark, which announced the fundraising round and notified lawmakers after they were approached by the FT for comment, has become one of the most high-profile players in Europe’s defence tech industry at a time when the continent’s governments are increasing spending on their militaries.
Other well-known groups such as Germany’s Helsing and Quantum Systems are also discussing large fundraisings including increased valuations.
Those deals are being negotiated against a backdrop of falling share prices for listed defence groups, as venture capitalists bet that a new generation of defence technology companies will grow quickly and secure future contracts.
US investors have been among the most eager backers of defence technology groups. Founders Fund is also a key investor in the $61bn defence tech start-up Anduril Industries.
Other investors who took part in the latest Stark fundraising round included the Nato Innovation Fund, Project A and Döpfner Capital, a VC firm headed by the son of Axel Springer chief executive Mathias Döpfner.
Uwe Horstmann, founder and chief executive of Stark, said: “This financing is a €500mn commitment to Europe’s defence industrial base — funding the engineers, factories and technologies that Europe needs now.”
Founders Fund declined to comment.