The British government wants to modernise its military, sparking a gold-rush mood among young European drone makers. From Quantum Systems in Gilching, to Munich-based Helsing and Arx Robotics, Berlin’s Stark Defence, and Portugal’s Tekever, all have raised multimillion-euro investments from venture capitalists in recent years and are now setting their sights on the UK market.

For makers of unmanned combat systems, the opportunities across the Channel are especially enticing. „The UK is one of the few countries in Europe and NATO that has formally committed to a strategic shift toward unmanned and autonomous systems“, says Vito Tomasi, a former Royal Marines officer who recently became head of Quantum Systems’ new UK subsidiary. The drone startup, founded in 2015, plans to invest up to 50 million euros in Britain over the next five years, establishing service, support, training, and logistics centers modeled on its operations in Ukraine.

Other military-drone startups are also putting significant capital to work. Arx Robotics, which develops ground drones, intends to invest a similar sum in a factory in southwest England, creating 90 jobs. Stark Defence, which has raised about 100 million dollars so far, plans to channel funds into its German production and a new facility in Swindon, Wiltshire.

Some are planning even larger bets: Helsing is budgeting more than 400 million euros for an underwater-drone plant in Plymouth, while Portugal’s Tekever is spending roughly 460 million euros on a surveillance-drone factory in Swindon that promises over 1,000 new jobs. Tekever, like Arx and Stark funded in part by NATO, only reached unicorn status in May. Non-European defense startups such as US-based Anduril have also voiced plans to expand into Britain.

The growing competition does not seems to worry these new defence industry players, thanks to the prospects offered by the British Army’s new „20-40-40“ strategy. Under this plan, the armed forces are to comprise 20% manned platforms (such as tanks), 40% reusable platforms (like drones), and 40% expendables such as missiles or single-use drones.

This strategy is laid out in the UK Ministry of Defence’s „Strategic Defence Review“ published in early June, which repeatedly cites lessons from the war in Ukraine: a nation’s forces are „only as strong as the industry, the innovators and the investors behind them.“ Technological innovation, it says, is „critical to staying ahead of our adversaries“, calling for drones, data and digital warfare to strengthen and secure the military.

Britain also plans to bolster its defence budget. In February the Labour government pledged to raise defense spending to 2.5% of GDP by 2027, with a long-term goal of 3%.

Tomasi calls Britain’s pivot toward autonomous systems „a major pull factor for innovative defence companies like ours“, adding that the UK shows a new openness to working with small and mid-sized defence firms and a willingness to modernise procurement.

Lengthy and complex military procurement processes often trip up new defence firms. Without deep pockets or large compliance teams, these startups can struggle to win government contracts.

On that front, Britain isn’t much different from Germany, Tomasi states. „Procurement decisions here can be extremely drawn-out, especially when large sums are involved“, he says. „Sometimes they take several years, by which time the contractor’s technology is already outdated.“ Even so, Quantum Systems remains optimistic. Both Germany and the UK, Tomasi points out, „want to modernise procurement cycles and match the pace of innovation that defines the world of new defence companies like ours.“

Quantum Systems is no stranger to expansion. Beyond Germany, Ukraine and now the UK, it has operations in the US, Australia and Romania. To fund its international growth, the startup recently raised 160 million dollars, primarily from London-based venture investor Balderton. Tomasi declined to comment on potential IPO plans.