Defense AI startup Helsing has raised €450 million ($487 million) in a Series C funding round led by General Catalyst. The company now plans to expand into European countries that border Russia. The announcement comes as NATO holds its annual summit in Washington, D.C., where Russia's invasion of Ukraine is high on the agenda.
As part of the plan, Helsing will set up a new company in Estonia and spend €70 million on defense projects in the Baltic states over the next three years. The Germany-based company also has offices in Munich, London and Paris, and the new funding will be used to develop AI capabilities and expand its 300-person employee base.
Helsing develops AI software that processes information from defense systems, enhances the weapons capabilities of drones and fighter jets, and improves decision-making on the battlefield.
“Ukraine has used technology to defend against a full-scale Russian invasion, and I think that's been a big boost for us to be able to help there, to deploy technology and to execute on the mission that we set out three and a half years ago, which is to use AI to defend democracy,” Hellsing co-CEO Gundobert Scherf said in an interview with TechCrunch.
“We are a company founded on European values and defending European interests and democracy. That's exactly what's happening right now in Ukraine,” he said of his expansion into Estonia. “Of course, the same is happening in the East, from Finland to the Baltic states to Poland. Estonia is also clearly a technology leader and the prime minister believes strongly in defending European democracy, so Estonia was a natural place to start.”
Estonian Prime Minister Kaja Kallas said in a statement that Helsing's arrival was a “very welcome” move for the country and that “deeds are needed, not just words.”
“Russia is increasing its defense budget to 7 percent of GDP and it's clear that its goals are much broader than just Ukraine,” co-CEO Torsten Reil added. “We feel an urgency and responsibility to create a capability gap to create a deterrent and, if necessary, be able to defend Europe and NATO's eastern flank.”
Asked where Helsing gets the bulk of its AI computing, the company's co-CEO avoided answering specifics. Reil replied: “We use our own computing, of course. We use edge devices, so we always need local computing as well. A few weeks ago we also announced Project Centaur, which is creating AI for air combat based on reinforcement learning. This requires a lot of computing, so we're spending a lot of money right now on training and drilling our agents. Ultimately, they will be very capable in air combat. That's where we use scaled-up computing.”
However, Lyle said that while the company has some computing power, it also uses third parties, whom he could not name for “security reasons.”
Helsing said in a statement that it has signed contracts with Airbus SE and the German and Ukrainian defense ministries, including the German Eurofighter electronic warfare upgrade (with strategic investor and committed partner Saab AB), 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 funding could theoretically value the company at around 4.95 billion euros ($5.4 billion), sources told Bloomberg, though the company declined to comment on valuation.
The startup is tapping into an increasingly popular field for startups as defense technology surges up the agenda for Western investors concerned about Russia's war posture and the potential threat from China. Silicon Valley has invested roughly $35 billion in defense tech startups in 2023, and more than $9 billion so far this year, according to a report released by PitchBook last week.
At the same time, defense budgets in Western countries are increasing, creating opportunities for founders and investors in the sector.
But while Anduril Industries may be the U.S. equivalent of Helsing, few other European defense startups have been able to reach Helsing's scale, in part because European government defense spending still lags behind that of the United States.
The new funding brings Hellsing's total funding to 769 million euros to date from investors including Spotify founder Prima Materia (a fund set up by Spotify founder Daniel Ek) and Swedish defense supplier Saab AB. The latest round also saw participation from Accel, Lightspeed Venture Partners, Plural, GreenOaks Capital Management and Silicon Valley investor Elad Gil.
“We are confident that Hellsing is on a path to becoming a global category leader, and with the battlefield unfolding in Europe for the first time in decades, we believe the role of companies like Hellsing is more important than ever,” Jeannette zu Furstenberg, General Catalyst's managing director and head of Europe, said in a statement.