Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
European defence technology start-up Helsing is in talks to raise almost $500mn from Silicon Valley investors including Accel and Lightspeed Venture Partners at a valuation of $4.5bn, tripling its price tag in less than a year, as global conflicts stoke a wave of private investment in military suppliers.
Accel and Lightspeed will be new investors in Helsing, said people familiar with the discussions, and are likely to be joined in the round by General Catalyst, an existing backer.
The deal would make Munich-based Helsing one of Europe’s most valuable artificial intelligence start-ups, in a strong signal of traditional venture capital investors’ growing appetite for defence tech companies. Accel, an early backer of Facebook and Spotify, has not previously invested in a defence tech company.
Helsing and Lightspeed declined to comment. Accel and General Catalyst did not immediately return requests for comment.
Founded in 2021, Helsing specialises in AI-based software for defence. It uses AI to process vast amounts of data generated by sensors and weapons systems to offer real-time battlefield intelligence and help militaries in their decision-making. The company’s software is also being used to develop AI capabilities for drones in Ukraine.
Helsing’s last round, announced in September, raised €209mn at a valuation of about €1.5bn, including the new funds raised. The new round under discussion would value the company at $5bn, which would include the new capital, people familiar with the talks said.
That price tag puts Helsing in the ranks of Europe’s most highly valued private tech companies alongside Paris-based Mistral, an AI start-up that raised €600mn at a valuation of almost €6bn earlier this month.
Venture investors had long been wary of investing in defence tech companies but that is changing rapidly in the US and Europe, as tensions between the US and China and Russia’s war in Ukraine have galvanised an increase in defence spending by nation states.
This year, Nato began investing its new €1bn “innovation fund” in European tech companies. Andrea Traversone, the fund’s managing partner, told the Financial Times earlier this month that Europe was “catching up very fast” to US investment in defence and dual-use technologies.
The war in Ukraine has underlined how modern warfare is shifting from the use of traditional hardware such as tanks, guns and munitions to more software-defined technologies to enable troops to outsmart the enemy.
Helsing has signed partnership deals with some of Europe’s established defence contractors, including Germany’s Rheinmetall and Sweden’s Saab, to integrate AI into existing platforms such as fighter jets. The start-up is also working with Airbus on AI technologies that will be used in manned and unmanned systems.
The company has received financing from Spotify co-founder Daniel Ek’s investment company, Prima Materia, which backed Helsing in 2021 with €100mn at a valuation of just over €400mn.
Helsing is seen by some as Europe’s answer to Anduril, the California-based defence tech start-up, which is set to close a $1.5bn fundraising round next month. Peter Thiel’s Founders Fund and Virginia-based Sands Capital will co-lead that investment, valuing the seven-year-old company at $12.5bn, said two people close to the matter. Anduril declined to comment.
Anduril, which also counts Lightspeed among its backers, makes autonomous weapons and defence systems such as drones, rocket-launchers and submarines and is a growing supplier to the US armed forces. It was co-founded by 31-year-old entrepreneur Palmer Luckey, whose previous start-up, Oculus VR, was bought by Facebook in 2014 for $2bn.
Additional reporting by Cristina Criddle
Read the full article here