HELSING became one of Europe’s most valuable startups by building artificial intelligence software for drones and jet fighters. Now it’s making weapons of its own.
The company, most recently valued at €5 billion ($5.27 billion), has developed an attack drone, called HX-2, that can carry ammunition and navigate without the need for a pilot’s instructions or GPS. Ultimately, Helsing imagines that escalating military tension will drive demand for thousands of these unmanned aircraft in Ukraine and along Europe’s border with Russia.
Torsten Reil, Helsing’s co-chief executive officer, said in an interview that connecting these drones via software to other weapons, tanks and artillery systems “has the capability to create a deterrence level that currently just isn’t feasible.” The company has not yet signed any contracts for its new strike drone.
Helsing’s venture into building strike drones, which hasn’t previously been reported, makes it one of the most well-capitalized startups to enter a market mostly filled with scores of small manufacturers. The move comes when Europe’s governments are bracing for the US to pull support from Ukraine in its war.
Helsing is pitching its new drone to Ukraine and other North Atlantic Treaty Organization allies, Reil said. “We don’t have a lot of time,” he said.
Last week, Ukraine President Volodymyr Zelenskiy suggested he was open to a cease-fire with Russia in return for NATO membership.
The startup aims to produce tens of thousands of HX-2 drones a year, selling them at cheaper rates than comparable unmanned strike vehicles already on the market. Reil declined to share specific production targets or prices, but said the devices would be made without Chinese components. Helsing started working on drone production in late 2023 and will produce more hardware devices later on, he added.
Reil, a video games entrepreneur, co-founded Helsing in 2021 with Niklas Köhler and Gundbert Scherf, a former commissioner in the German defense ministry. Since then, the startup has raised €770 million ($813 million) from investors, including the fund of Spotify founder Daniel Ek. Helsing has offices in Munich, Paris and London, and opened a base in Estonia this summer as part of an effort to better defend NATO’s eastern flank.
The startup has been cagey about details of its technology and sales and declined a request for a demonstration of its drones. It signed deals with Airbus SE and Saab AB, including a contract to upgrade the Eurofighter, developing an AI system for analyzing radar data to improve the jet fighter’s reconnaissance and protection capabilities, according to Helsing.
Ukraine Deployment
In June, Germany announced plans to provide Ukraine with more military supplies, including attack drones, worth around €500 million. As part of this deal, Germany will pay for 4,000 plywood strike drones that use Helsing’s software, starting in December.
Helsing said its hardware manufacturing partner for those drones is based in Ukraine but declined to name the firm, citing security concerns. The weapons, called HF-1, were certified by the Ukrainian government as resistant to GPS jamming, the company added.
A spokesperson for Germany’s defense ministry confirmed that government is financing the delivery. “These drones have been extensively tested and certified for use by Ukraine in advance,” the spokesperson wrote in an email, without specifying the testing process or contract details for “reasons of military security.” Representatives from the Ukrainian military did not respond to a request for comment.
Cheap drones strapped with bombs are everywhere in Ukraine, changing the face and economics of the war. A major difficulty in Ukraine is Russian electromagnetic jamming, which disrupts GPS signals and communications between drones and remote pilots.
Helsing says it has solved this problem with a system that uses computer vision and AI to map terrain without the need for GPS coordinates. The company plans to equip both the HF-1 and HX-2 models with new software called Altra.
Altra can merge data feeds from multiple drones to scan a larger area and detect targets, giving operators “more time to make decisions, but then also be more precise,” the company’s co-CEO Scherf said. “And yes, if needed, more lethal.”
The company stressed that the HX-2 drones, which are designed to fly up to 100 kilometers, will retain “full human control and oversight.”
Drone Swarms
Other companies have proposed workarounds for GPS jamming, including Auterion, a drone software provider. Some defense startups are developing hordes of unmanned drones that can lock onto targets and attack without human guidance. One such startup, Germany’s Stark, has received funding from Sequoia Capital, Bloomberg News reported.
Franz-Stefan Gady, an associate fellow at the International Institute for Strategic Studies, said these “swarm drones” still require many soldiers to operate and are difficult to coordinate, despite the bold visions of tech startups. He said he sees them as an “auxiliary tool” for Ukraine.
For Helsing to reach its desired goal with the HX-2, it likely needs Ukraine’s allies in Europe to spend more on defense. A recent Bloomberg Intelligence report estimated that NATO members in Europe need to spend an additional $340 billion next year to bolster capacity against Russia.
Scherf said that traction with governments outside of Ukraine has been slowed by red tape, but “we think this is accelerating” with HX-2. –BLOOMBERG