German defense AI company Helsing's large-scale investment enters the final stage… Europe's "defense technology" boom reignites

It is rumored that Helsing GmbH, a German defense technology company, has entered the final stage of a new round of approximately $1.2 billion (about 1.7827 trillion Korean won) investment. If this funding round is successful, the company’s valuation is expected to jump to about $18 billion (about 26.7408 trillion Korean won), making it one of Europe’s most valuable technology startups.

Citing multiple anonymous sources, the Financial Times (FT) reported that the negotiations for this round are being led by the U.S. Dragoneer Investment Group, with existing investor Lightspeed Venture Partners co-leading the round. It is understood that significant progress has been made in the negotiations, but the timing of any formal announcement has not yet been determined.

The valuation has surged significantly in less than a year. Last year, Helsing received an estimated valuation of about $14 billion in a €600 million (about $706 million, about 1.0489 trillion Korean won) funding round led by Prima Materia, an investment firm backed by Spotify founder Daniel Ek.

Defense technology investment surges after the Ukraine war

Market attention on Helsing aligns with the broader investment trend recently sweeping through Europe’s defense technology sector. Since Russia’s invasion of Ukraine in 2022, as governments across Europe have pledged to expand defense spending, funds are rapidly flowing to emerging defense companies that focus on “artificial intelligence” and autonomous systems, rather than traditional weapon systems.

In particular, as drone warfare has become a core variable on the battlefield, companies with drones, autonomous weapon systems, and battlefield data analysis software have drawn substantial attention. Although some voices have raised concerns that the defense technology sector may enter a “bubble” phase, others believe that in the past, too much of the budget was allocated to outdated combat capabilities such as fighter jets or tanks—and that future wars are likely to be reorganized around autonomous weapons.

According to the FT, Helsing’s current funding round has reportedly been oversubscribed by several times. This shows how aggressively investor capital is flowing into next-generation defense startups that apply artificial intelligence to weapon systems.

From drones to submarines and unmanned combat aircraft

Founded in 2021 and headquartered in Munich, Germany, Helsing initially was an AI software company that helps military command decision-making by analyzing battlefield data. Since then, its business has expanded aggressively, developing suicide drones, autonomous submarines, and unmanned combat aircraft that fly in coordination with manned fighter jets.

The company’s growth story has not been smooth. Its first suicide drone, “HF-1,” developed together with Ukrainian partners, was criticized for high costs and performance disputes. After that, Helsing rolled out the improved “HX-2” model. The model has now received approval from Ukraine’s military for operational use, and is reportedly already being used to strike Russian targets.

Oleksandr Kamyshin, who serves as a presidential adviser in Ukraine’s strategic industrial sector, is also considered to be a person who has repeatedly given positive evaluations of Helsing’s technology.

Also wins German government contracts

Helsing is also expanding its presence within Germany. Recently, the company secured a contract to supply autonomous drones to the German armed forces valued at €269 million (about $399.74 million, about 5939 billion Korean won). It is understood that the contract also includes an option clause: if the German armed forces are satisfied with performance, future spending on purchasing HX-2 drones could reach up to €1.46 billion (about $21.55 million, about 3.2023 trillion Korean won).

Europe has already seen defense “unicorn” companies emerge, such as Tekever Ltd. and Quantum-Systems GmbH in the drone sector. In the United States, large defense technology firms such as Anduril Industries Inc., Shield AI Inc., Mach Industries Inc., and Parry Labs LLC are also rapidly growing. Among them, Anduril’s valuation has reached $30.5 billion.

If Helsing’s current funding round ultimately gets completed, it will likely once again confirm the high heat in Europe’s defense AI market. However, whether such a high valuation can continue to match the pace of its actual combat results and the expansion of government contracts will be the key market validation point in the future.

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