With 450 million euros in equity, the financing round for the Munich-based defence AI company Helsing is remarkable. It is the largest known start-up capital injection in Germany this year. The fresh money for Helsing is to be used for product development and research. In line with the NATO Summit in Washington, the aim is to „secure European sovereignty“, including the protection of NATO's eastern flank– for example, through more effective drones. Helsing has long been in business with Ukraine. Now, in addition to offices in London and Paris, a branch in Estonia and new customers from Eastern Europe have been added. The company presents itself as pan-European. The whole thing illustrates how threatening the war in Ukraine is.

The list of investors makes it clear that these are purely from the private sector. With General Catalyst at the helm and venture capitalists such as Elad Gil, Accel and Lightspeed, the „crème de la crème“ of the Silicon Valley venture capital scene is represented. State entities such as the new Nato Innovation Fund, are completely absent. There is simply no need for state funding. AI in the military sector has become a major investment case for venture capitalists.

Helsing is just one of many new defence start-ups that are attracting a growing amount of venture capital following Russia's invasion of Ukraine. Defence budgets in Europe have increased, and the Baltic States are sounding the alarm about Russia's GPS jammers. European governments prefer to award defence contracts to local companies. This plays into Helsing's hands in competition with US rivals such as Anduril, Shield AI and Palantir. The customer list is impressive: Helsing is to modernise the electronics on the Eurofighter together with the Swedish company Saab, and sees itself as responsible for the „AI infrastructure for the Future Combat Air System“ - i.e. the new European fighter aircraft.

ESG concerns, which until recently deterred many investors from making military investments, hardly play a role any more. The „peace clause“, which prohibits research for war, still applies at universities. Probably not for much longer. One of the first German investors to put venture capital into the booming war economy is reservist Uwe Horstmann and his fund Project A Ventures. The German drone manufacturer Quantum Systems and the military robotics company Arx have also received millions. Others will follow.