Helsing secured €450 million in Series C funding to expand operations near Russia and bolster Baltic defense projects over three years. This investment, led by General Catalyst, follows a $1.8 billion round that values the Munich-based startup at $18 billion. While the capital influx suggests momentum, the concentration of funds around a few names like Helsing and Quantum Systems, which raised $1.2 billion in its Series D, leaves many early-stage ventures struggling.
Concentration and drone dominance
The European defense tech sector raised $10.5 billion this year, which is four times the $2.6 billion raised throughout 2025. However, most of this money flows to specific categories and proven players. Drones and autonomous systems captured $4.7 billion, representing 74% of total funding, while ground robotics received only $77.6 million. I find the 60x gap between these two categories within the same sector striking.
| Feature | HX-2 Strike Drone Specifications |
|---|---|
| Propulsion | Electric |
| Range | Up to 100 km |
| Weight | 12 kg |
| Speed | 220 km/h |
| Design | X-wing precision munition |
Helsing produces the HX-2, an electrically propelled x-wing strike drone designed for mass production and swarm capabilities. The system uses on-board AI to provide electronic warfare resistance and can operate without GPS or a continuous data link. The company aims to produce tens of thousands of these units annually to provide a counter invasion shield. Although the company claims the HX-2 provides autonomy through software, it maintains human control over all critical decisions.
Scaling deep tech and capital gaps
The European Investment Fund committed €50 million to Join Capital Fund III via the InvestEU Defence Equity Facility to attract private capital into dual-use technologies. Join Capital plans to invest in 25 early-stage startups, including companies like Kreios Space and Quantum Optics Jena. This move attempts to bridge the gap where the US outpaces Europe 10-to-1 in venture funding for defense startups.
Investment trends show a shift toward hybrid models, such as the fund announced by Mykhailo Fedorov in August 2026 that combines capital with company building. GALLOS Technologies also raised $50 million in August to combine venture investment with company building. Despite these successes, seed round investment fell from $50 million to $36 million, showing a 20% decline. Can European scale-ups overcome the valley of death without more consistent late-stage capital? You should watch how Helsing manages its $18 billion valuation, which represents 32 times its projected 2026 revenue of €441 million. This multiple significantly exceeds the 8.5 times revenue multiple seen with Germany’s Quantum Systems.
