Two European air defence startups, Frankenburg Technologies and Tytan Technologies, announced they had raised €30m each four years after Russia’s full-scale invasion of Ukraine.
Tallinn-based Frankenburg, which builds low-cost missile systems to intercept attacks, raised its round led by Estonian VC Plural, alongside Estonian state-backed fund SmartCap. Tytan, based in Munich, raised its Series A co-led by defence investor Armira and the NATO Innovation Fund, along with Lakestar, Visionaries Club, OTB Ventures, Ukrainian investor D3 and 10x Group.
Air defence has become a key concern in Europe amid a massive increase in drone attacks in Ukraine. “In a world where an adversary can deploy tens of thousands of autonomous attack drones, staying safe is not rocket science: defence must be cheap, fast and count in millions of units available,” Sten Tamkivi, a partner at Plural, said in a statement.
Frankenburg says its new funding will be used to set up two new Europe-based mass production sites aimed at producing 100 missiles a day, as well as things like growing its engineering team and expanding hubs in the UK and Germany.
Meanwhile Tytan says its new €30m will be used to scale manufacturing across Germany, Ukraine and other allied markets and further develop its AI-powered interceptor systems including missiles. The company says it has confirmed orders from Ukraine and that it has “secured multiple government contracts” without specifying further.
The new rounds bring Frankenburg’s total funding to €40m and Tytan’s to €46m.
Air defence: the next big thing in VC funding?
European VCs have funnelled hundreds of millions into surveillance and strike drone startups like Germany’s Helsing, Stark and Quantum Systems. But for some investors, the next big thing is air defence systems and interceptors: startups that work on systems to prevent attacks and defend cities or critical infrastructure.
But some VCs say that space is more challenging than strike drones, with many startups still in the R&D phase. They point to problems like complicated integration with other systems, while interceptor drones or systems are harder to build than strike drones — perhaps reasons why the niche hasn’t attracted as much funding.
However several VCs are clearly bullish on the space. Eveline Buchatskiy of D3, which has backed Tytan, told Sifted last October that she expects demand for air defence systems will outpace supply for the foreseeable future.
“Most companies are just coming to market, and once they prove their concepts, then they will get all the big contracts and there's going to be this kind of boom in counter drone systems.”
