Defense AI startup Helsing has raised €450 million ($487 million) in a Series C financing round led by General Catalyst. It now plans to expand its presence in European nations bordering Russia. The announcement came as NATO held its annual summit in Washington, D.C., where the Russian invasion of Ukraine is high on the agenda.
As per the above plan, Helsing has created a new entity in Estonia and plans to spend €70 million on Baltic defense projects over the next three years. The Germany-HQ company also has offices in Munich, London and Paris, and said the new cash injection would be spent developing its AI capability and expanding from its 300-employee base.
Helsing creates AI software to process information from defense systems, boost weapons capabilities in drones and jet fighters, and improve battlefield decisions.
Gundbert Scherf, Helsing’s co-chief executive officer, said in an interview with TechCrunch that “Ukraine has used technology for its defense against the full-scale Russian invasion, and I think us being able to help there and deploy our technology and execute the mission we had set out three and a half years ago, to use AI to protect our democracies, has been a big driver for us.”
“We’re a company founded on European values and defending European interests and democracies, and right that now is happening in Ukraine,” he said, speaking about the move into Estonia. “But of course, it’s also happening on our eastern flank, all the way from Finland, through the Baltics, down to Poland … Estonia is a country that’s obviously also a leader in technology and the prime minister there has a high conviction in protecting European democracies. So it was a natural starting point.”
In a statement, Kaja Kallas, Estonia’s prime minister, said that Helsing’s entrance was “very welcome” in her country and that “we need actions, not just words.”
“Russia has increased its defense budget to 7% of GDP, to a level where it’s pretty clear that the goal is probably not just Ukraine, but wider,” co-CEO Torsten Reil added. “We feel a sense of urgency and responsibility to create a capability gap in order to be able to deter and, if necessary, defend Europe and the NATO eastern flank.”
Asked where Helsing gets the bulk of its AI compute from, the company co-CEOs demurred on the details. Reil said: “We use our own compute obviously. We’re on ‘Edge’ devices, and there’s always local compute required as well. We also announced a few weeks ago Project Centaur, which is based on reinforcement learning to create an AI for air combat. That requires a lot of compute. So we spend a lot of money right now on training and training agents. Eventually, we’ll have extremely high capabilities in air combat. And there we use scaled-up compute.”
However, Reil said that while they have some compute capability, the company also uses third parties, but he said these cannot be named for “security reasons.”
To date, Helsing has won deals with Airbus SE and defense ministries in Germany and Ukraine, including the German Eurofighter Electronic Warfare upgrade (with strategic investor and committed partner Saab AB), the AI infrastructure for the Future Combat Air System (FCAS, with consortium HIS) and a number of classified contracts in the maritime and land domains, the company said in a statement.
The latest funding round would theoretically value the company in the region of €4.95 billion ($5.4 billion) according to a source who spoke to Bloomberg, but the company has declined to comment on matters of valuation.
The startup is plowing an increasingly popular furrow for startups as defense tech rockets up the agenda of Western investors both concerned at the war footing of Russia and the possible threat from China. Silicon Valley put almost $35 billion into defense tech startups in 2023, and over $9 billion so far this year, according to a report released last week by PitchBook.
At the same time, Western defense budgets are going up, creating an opportunity for founders and investors in the space.
However, while a U.S. equivalent to Helsing might be Anduril Industries Inc., few other European defense startups have managed to get to Helsing’s scale, in part because European government defense spending still lags behind that of the U.S.
The new funding means that to date Helsing has raised €769 million in total from investors including from Prima Materia (the fund set up by Spotify founder Daniel Ek) and Swedish defense supplier Saab AB. Joining the latest round were Accel, Lightspeed Venture Partners, Plural, Greenoaks Capital Management and Elad Gil, a Silicon Valley investor.
In a statement, Jeannette zu Fürstenberg, managing director and head of Europe for General Catalyst, said: “I have deep conviction that Helsing is on the path to becoming a global category leader. As we witness battlefronts on European soil for the first time in decades, we believe the role of companies like Helsing has never been more critical.”
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