Marc Wietfeld has found himself at the intersection of two “abnormal” groups: being the founder of a VC-backed startup, and being a former army officer.
“VC is its own world with its own rules and its own language and vocabulary; defence is too,” Wietfeld, the cofounder and CEO of German unmanned robotics startup ARX Robotics, tells Sifted. “It’s pretty similar in the way [that] it is different from being normal.”
Despite trying to build a startup in an industry which has historically struggled to attract VC money until more recently — and that still struggles to attract lots of young talent — he says he’s got his eyes set on becoming the next big Airbus or Thales.
What does ARX Robotics do?
Wietfeld began working on the robotics project, dubbed Gereon, that would become ARX Robotics back in 2021 while in the German armed forces. He officially incorporated the company in 2022 and was joined by German army officer turned tech executive Stefan Röbel and finance lead Maximilian Wied as cofounders.
The startup builds unmanned ground vehicles to do everything from supplying and rescuing troops on the front lines to deceiving the enemy with imitation gunshot noises, lasers, and other distractions in training.
Wietfeld, like other defence founders, decries the defence procurement process in Europe as outdated: “Having a project to procure a new tank with a development and implementation phase of, in total, 15 years, means that the system which will hit the front line or be handed over to the soldiers is outdated the moment they receive it.”
ARX focuses on adaptability and modularity, says Wietfeld, using software-enabled hardware and AI with off-the-shelf components to make it cheaper and interchangeable.
“This is how we scale up our systems, from, for example, 50kg robots to 400-500kg robots,” he says, noting they can also implement their systems into existing hardware. “We do not stop at our own robotic systems; we also enable legacy systems of the armed forces with our solution.”
ARX fine-tunes existing AI models for their systems and different use cases for their customers, Wietfeld adds.
This June, the startup announced a €9m seed round, from investors including Project A, the NATO Innovation Fund (NIF) and Discovery Ventures (Chris O’Connor from the NIF and Uwe Horstmann from Project A sit on ARX’s board).
The startup is already in talks to raise its Series A, the cofounder tells Sifted — with M&A in mind.
Fundraising, revenues and M&A on the horizon
Wietfeld says that ARX achieved some of its seed round goals faster than it expected, prompting the company to go back to fundraise ahead of schedule to grow.
He tells Sifted it’s currently in talks to raise its Series A, but that the size of the round will be determined by different M&A opportunities and whether it can raise the round in Europe or opt for a US investor. He says it’s likely that existing investors Project A and the NIF will participate in the next round, although ARX is looking for a new lead backer.
ARX now has “double digits in millions” of dollars in revenues, he says, without specifying further. The startup has more than 10 government contracts, and its robots have been deployed in Ukraine for roughly a year, says Wietfeld.
It’s also secured a couple of civilian projects — deploying ARX robots at airports to help with autonomous baggage transport as well as testing providing 24/7 runway surveillance and security patrols with the Frankfurt and Munich airports, Wietfeld says.
Still, ARX is a “defence first” startup, and most of its projects are currently on that side of the business, Wietfeld adds.
The ‘next defence prime in Europe’?
When asked what his ultimate goal for the company is — be it to IPO or become a unicorn — Wietfeld, like most founders, isn’t shy about his ambitions: “We are on the way to become the next defence prime in Europe,” he says, referring to the set of large companies with established government contracts like Lockheed Martin, Airbus, or Thales.
Like other defence founders, Wietfeld acknowledges that it’s a tough market for startups, and he bemoans the many requirements that each European government has. That’s why he feels it’s necessary to build a “modular, adaptive product, because otherwise you will start from zero in your EU expansion to fulfil the different needs of Lithuania, Estonia, Poland, Hungary.”
One requirement they won’t fulfil, at least directly: equipping the robots with weapons. But Wietfeld says that while they won’t do it themselves, their customers might. Just like an army could equip a Mercedes Benz “G wagon” for battle, “they can do it also with one of our robots,” says Wietfeld.
He doesn’t have moral qualms about it, saying he trusts the governments to do the right thing with ARX’s products.
ARX isn’t alone in putting unmanned ground systems on the battlefield and Wietfeld acknowledges that there’s competition, particularly in software-enabled hardware. Some of the defence primes “are our closest partners in one project or market and our biggest competitors in another,” he says, although he believes ARX has an edge with speed and a user-centric focus.
ARX also recently partnered up with fellow Munich defence tech Quantum Systems, which is developing AI-powered unmanned drones, for an alliance dubbed “UXS Alliance” to pool expertise in unmanned systems to improve security in Europe and NATO, the companies announced last month.
Talent challenges in defence
Along with a new fundraise, Wietfeld says ARX is planning to beef up its ranks and go on a hiring spree in the next year. He says it started 2024 with around six employees; the company now has 25. Next year, he plans to expand that number to 50-60.
Despite the current buzz around defence tech, it’s not necessarily easy to get talent to work for your startup: insiders have previously told Sifted of the struggles defence startups face hiring the right people.
Although ARX is near universities like the Technical University of Munich, he says it’s hard to woo fresh graduates to a startup “when you could also go to BMW or to Siemens. This is something the graduates are looking for their first years,” he says. Therefore “the best applicants are those that just had their four, five years in the bigger primes, and are just so bored and are looking for a real contribution to something.”
“We are looking for highly talented people in software and AI, for example, but with the mindset to join the mission instead of just having a job,” adds Wietfeld.
Read the orginal article: https://sifted.eu/articles/arx-robotics-cofounder-funding/
