BERLIN: Stark Defence, a startup making kamikaze drones, has raised €500mil (US$570mil) in a fundraising round led by Sequoia Capital and Peter Thiel’s Founders Fund as private capital pours into European military technology.
The financing gives Stark a valuation of €3.2bil, the Berlin-based company said in a statement on Tuesday.
Previously, the two-year-old company had raised a total of €140mil.
Participants in the round include the North Atlantic Treaty Organisation Innovation Fund, Döpfner Capital, Air Street Capital, 201 Ventures and Project A, where Stark co-founder and chief executive officer Uwe Horstmann works as a founding partner.
Venture capital funds have invested billions of dollars in European defence companies since the war in Ukraine started more than four years ago, betting that increased military spending on the continent will flow to newcomers making drones, specialised software and other battlefield tech.
While much of the money is earmarked for more established arms producers, Stark is among a handful of startups that have won sizeable contracts.
“In less than two years, they have gone from an idea to delivering systems across multiple domains, winning major programmes and building industrial capacity across Europe,” Luciana Lixandru, partner at Sequoia Capital, said in the statement. “Few companies execute at this speed.”
Formed in 2024, the company makes loitering munitions, or missiles that launch without a specific target and can hover over a battle zone before striking.
Stark competes with Helsing, another German startup, as well as a growing number of US firms active in Europe, such as Anduril Industries Inc.
Germany approved three contracts this year for as much as €1bil each to buy strike drones from Stark, Helsing and Rheinmetall AG for its military brigade stationed in Lithuania.
Stark said it will use more than 80% of the funding to expand its manufacturing and research.
The startup opened a production facility in southwest England and said it now operates in Germany, Ukraine, Sweden and Greece.
The respected British daily newspaper Financial Times reported some elements of the funding round previously.
Sequoia, a Silicon Valley investment firm known for early bets on companies including Apple Inc and Google, had put money into Stark in two prior rounds.
The venture capital investor has made a few recent defence deals, but hasn’t gone after the sector as aggressively as competitors, such as General Catalyst and Andreessen Horowitz.
Founders Fund has invested extensively in defence, including in Anduril.
Thiel, the fund’s co-founder, previously invested in Stark through his other fund Thiel Capital.
The controversial billionaire’s ownership stake has been a political issue in Germany.
Earlier this year, the Defence Ministry told lawmakers in a confidential briefing that Thiel Capital owned less than 10% of Stark.
A Stark representative pointed out that Thiel’s overall shareholding, including his stake through Founders Fund, had decreased after the new round. — Bloomberg
