Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Spotify founder Daniel Ek is leading a €600mn investment in Helsing, valuing the German defence tech group at €12bn and making it one of Europe’s most valuable start-ups.
The deal comes as the Munich-based start-up is expanding from its origins in artificial intelligence software to produce its own drones, aircraft and submarines.
Helsing is benefiting from a surge of investment in defence groups, as a highly charged geopolitical environment spurs nations all over the world to increase military spending and the war in Ukraine triggers a rethink of battlefield technology.
Prima Materia, the investment company founded by Ek and early Spotify investor Shakil Khan in 2020, made the first significant investment into Helsing in 2021, months before Russia’s full-scale invasion of Ukraine.
Now Prima Materia is “doubling down”, Ek told the FT. It is leading the start-up’s latest investment alongside existing backers including Swedish defence group Saab and venture capitalists Lightspeed Ventures, Accel, Plural and General Catalyst.
The deal brings its total capital raised to €1.37bn.
“The world is being tested in more ways than ever before. That has sped up the timeline” for Helsing’s financing, Ek said, pointing in particular to the conflict between Russia and Ukraine, where drones and other AI-powered systems have been deployed at scale for the first time.
“There’s an enormous realisation that it’s really now AI, mass and autonomy that is driving the new battlefield,” said Ek. “We can’t understate the implications of that for this conflict [in Ukraine] or really any conflict going forward.”
Four-year-old Helsing’s valuation has more than doubled since it raised €450mn less than a year ago. The latest investment, which is made through a combination of traditional equity and other financing, values the company at around €12bn, according to people familiar with the matter.
The figure ranks Helsing among the five most valuable private tech companies in Europe. The company declined to comment on its valuation.
The deal comes after California-based start-up Anduril recently raised $2.5bn at a $30.5bn valuation. European drone makers Quantum Systems and Tekever were both valued at more than €1bn last month.
Helsing has sold thousands of strike drones, produced in its own facility in southern Germany, to Ukraine. It has also secured contracts the UK, Germany and Sweden.
The company recently completed successful test flights of its autonomous air combat system, which piloted a Saab fighter jet, and unveiled plans for a fleet of unmanned surveillance submarines.
“We’re now at an inflection point . . . where we are going from a software company to an all-domain, AI software and hardware company,” said Ek, who also chairs Helsing.
Helsing was founded in 2021 by Torsten Reil, a video games entrepreneur, Gundbert Scherf, a former German defence ministry official, and Niklas Köhler, an AI researcher. The trio has vowed not to sell the company and instead plans to go public in the future.
Helsing has struck partnerships with Saab to incorporate its AI software into the Swedish defence group’s systems, as well as with Paris-based Mistral to build out its platform’s decision-making capabilities. However, a partnership with German military giant Rheinmetall, announced in 2022, fizzled last year.
Ek’s initial investment into Helsing triggered a backlash against Spotify, the digital music service he co-founded in 2006 and still runs as chief executive. But he said he was not worried about the potential threat of another boycott.
“I’m sure people will criticise it and that’s OK,” Ek said. “Personally, I’m not concerned about it. I focus more on doing what I think is right and I am 100 per cent convinced that this is the right thing for Europe.”
Additional reporting by Sylvia Pfeifer in Paris
