Last week saw world leaders, VCs and startups come together at Kultuurikatel, a creative and event centre in the heart of the Estonian capital Tallinn, for three days of panels, pitches and parties at Latitude59.
Darlings of Estonian tech seen wandering the conference halls included Kaarel Kotkas, CEO of ID verification platform Veriff, and Markus Villig, the billionaire entrepreneur behind mobility giant Bolt.
Luminaries from Starship Technologies — which makes the coolbox-sized robots that whizz about Tallinn delivering groceries — were there too, as were Estonian tech OGs Taavet Hinrikus and Sten Tamkivi, the Wise and Teleport founders who later set up VC firm Plural.
Away from the conference halls, attendees let loose at a host of side events. Local investor Karma VC hosted a bunch of us for burgers, cocktails and chitchat. One guest cheerfully distributed a couple of cigars in see-through ziplock bags.
Latitude59 is not, officially, a defence tech conference. But those in the local ecosystem tell me security is “part of the air we breathe” in Tallinn, given its proximity — barely 100 miles west — of the Russian border.
Panels covered the rollout of sandboxes for defence applications, the balance between national security and innovation, as well as a debate over if — or when — the “defence tech bubble” might burst.
There was also a lot of chat about speeding up procurement to get new military applications into the hands of the armed forces.
There are three things making that hard, Kadi Silde, the director of European engagement at German defence tech Helsing, said on stage: first is that a lot of armed forces aren’t used to working with young companies operating at technology readiness level 6 (TRL6), where products are at the prototyping stage and not yet demonstrated to work at scale in the field.
Second: most startups fail. Agencies have to ask: “If I order this product will this company be alive in a year,” Silde told the crowd. Third: can you deliver your tech at scale? “I think that’s the biggest problem,” she said.
A lack of funding also remains an issue. “Everyone says that defence is hot right now but we’re still not seeing enough investment,” Patrick Schneider-Sikorsky, a partner at the NATO Innovation Fund (NIF), said on the same panel. “One bottleneck is the regulatory environment that allows private investors to invest in defence […] we need better education of the procurement processes. It’s not like selling a software product to an enterprise client.”
Taavi Rõivas, the former prime minister of Estonia who now chairs Auve Tech — a Tallinn-based company developing autonomous shuttles for last-mile public transport — says restricting funds to dual-use companies “or having a soft mandate and not being able to invest directly into defence” has been part of that problem.
“This is changing though, and because it’s changing there is a lot of interest in seeing that defence is actually where a lot of innovation happens,” he tells me as we sit side by side in one of his company’s eight-seater vehicles.
Throughout conversations, business leaders espoused the importance of distinguishing between companies riding the hype and those truly capable of bolstering Europe’s defences.
“We see early-stage companies which don’t have a fully functioning product yet but they have a good team and have raised from a well known VC […] sometimes we think those valuations are a bit rich,” Schneider-Sikorsky said on stage. “The more important thing is that capabilities are funded, delivered and procured rather than worrying whether something is 20-30% more expensive […] nitpicking on valuation is the wrong focus.”
There also seemed to be a sense from chats around the conference that if you’re an Estonian company working on tech that wasn’t designed for, but could have, a military application, you might find the government knocking on your door.
Rõivas said that isn’t the plan for Auve Tech though. “I’m a firm believer of the use of technology in the military but having said that, our vehicle is not a tank […] in theory we could use it in the military as well, but the best use for our shuttle is not on the battlefield but in military bases that are crazy big.”
The conference was closed out on Friday by the final of a pitching competition; a couple of companies among the six on stage were working on military tech.
There was something uneasy about seeing pitches for companies working on tech for employee engagement and wearable biosensors for women’s health bookending a pitch for a company working on ‘battle tested’ night-vision capabilities for drones. All pitched with the same vim.
Every company needs money. But on stage they’re being measured by the same metrics — how well someone pitches, the size of the company’s target market, traction, team etc — which can numb people to the desired outcomes of a company. At one point at the conference I also heard a defence founder on a panel talk about the targets of their tech as “opponents” — which feels like gamifying war.
The women’s healthtech that pitched says it wants to make tracking ovulation ‘easy, convenient and precise’; the employee engagement company offers an app to let workers pick the benefits they want and ‘a self-driving gamified recognition program’ for staff; the drone tech company offers a product that is ‘sent for rigorous battle testing and evaluation’ and says ‘cost efficiency and affordability taken into account at every design step’ — tech to make it cheaper to kill people.
Defence tech is caught up in the hype cycle, and Latitude59 was a timely reminder why treating tech built to kill like any other startup presents a big ethical grey area. There are investors in the space with domain-experience who get the tech. But hype cycles also bring with them dumb money, and inevitably investors chasing a buck rather than fully understanding what they’re investing in.
Read the orginal article: https://sifted.eu/articles/latitude59-defence-tech/
