German AI defence startup Helsing has raised €450m in Series C funding led by General Catalyst. The round values the company at €4.95bn, Bloomberg reported. Other investors participating are Elad Gil, Accel, Saab, Lightspeed, Plural and Greenoaks.
A source tells Sifted that US-headquartered General Catalyst pre-empted the investment into the Munich-based defence tech company, which launched just three years ago. It raised a €209m Series B funding round led by General Catalyst in September last year, following a €103m Series A fundraise led by Daniel Ek and Shakil Khan’s investment firm Prima Materia in November 2021. The round is subject to government approval.
Helsing hasn’t just wooed investors, it’s also quickly secured support from the German government, winning a programme of record contract — a pre-approved and budgeted bucket of money for a certain defence capability — less than three years after its inception.
Helsing develops AI software for use on the battlefield, and says it has been active in Ukraine since 2022.
The company — which employs more than 250 people — will use the new funds to invest in R&D and bolster its work in the Baltics, as Russia’s war in Ukraine goes on.
“European security is at a crossroads,” and “speed is of the essence. This new funding round allows us to further up the tempo and invest in large-scale R&D and capabilities across all domains,” Helsing’s three founders, Niklas Köhler, Torsten Reil and Gundbert Scherf, said in a statement.
Defence is du jour
In recent years more VCs have turned their attention to investing in defence tech in the wake of Russia’s war on Ukraine. Many VCs are still figuring out the parameters of what they’re able to invest in — like so-called dual use tech, which has both commercial and military applications. Some LPs are hesitant to back funds investing in the sector, but it’s becoming less taboo.
“You still see people in the ecosystem who are taking a value stance and saying that they will continue to not invest in defence technology, but we are seeing a growing number of players in the ecosystem willing to take a stance on that,” Chris O’Connor, partner at the €1bn NATO Innovation Fund, recently told Sifted. The “discussions right now are far more sophisticated and nuanced than they were even a year ago.”
State and institutional backers like the European Investment Bank (EIB) are making moves to guide more money into the defence space, with the EIB recently broadening the criteria for defence companies to qualify for financing by no longer requiring them to make more than 50% of their revenues from commercial applications. David Dana, head of VC investments at the European Investment Fund (EIF), recently told Sifted that the fund expects to get “twice the amount” of defence tech fund pitches by the end of 2024.
Read the orginal article: https://sifted.eu/articles/ai-defence-helsing-450-million-fundraise-news/
