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European investors are backing two of the region’s fastest-growing technology start-ups developing low-cost air defence systems to help plug one of Europe’s biggest military capability gaps.
Fundraising by Frankenburg Technologies and Tytan Technologies, announced on the fourth anniversary of Russia’s full-scale invasion of Ukraine, comes as Europe’s defence start-ups seek to scale up production of critical capabilities.
The latest financing was “about the broader air defence space”, said Balázs Nagy, co-founder and co-chief executive of Tytan whose AI-powered interceptor drones have been deployed in Ukraine.
Air defence has been a particular focus as a proliferation of drones on the front line exposes the limits of expensive legacy air defence systems that were designed for different threats. European governments have stepped up military spending but Nato has warned that the alliance needs a drastic increase in its air and missile defence capabilities to ward off Russian aggression.
Munich-based Tytan has raised €30mn, led by the Nato Innovation Fund and European investor Amira, alongside previous investors including OTB Ventures and Lakestar. The deal values Tytan, which was founded in 2023, at more than €100mn, according to people familiar with the fundraising.
The company will use the money to increase its manufacturing capacity and expand its product portfolio. It aims to produce 3,000 of its interceptors a month by the end of this year.
“What we are developing is from Europe to Europe,” said Nagy, adding that the message from the financing was that “Europe is capable [of financing] new air defence companies”.
Estonia’s Frankenburg has also raised €30mn to build affordable missile systems in a financing round led by tech investment firm Plural and including Estonia’s SmartCap. The start-up declined to comment on its valuation. It was valued at just under €150mn after last year’s seed round, according to data firm PitchBook.
Frankenburg, founded in 2024, also plans to use the new capital to expand output. The company, which is led by chief executive Kusti Salm, former permanent secretary of Estonia’s defence ministry, said one of its priorities is to set up two EU-based “mass production sites” to make more than 100 missiles per day per site.
The new funding will also be used to secure components and to establish dedicated rocket motor and warhead production facilities within the EU.
The companies that “will win the procurements and have an impact on defence are the ones that don’t just design products but design manufacturable products”, said Sten Tamkivi, partner at Plural which is also one of the leading backers of tech unicorn Helsing. Defence, he added, must be “cheap, fast and count in millions of units available”.
Although Europe has established players that build missiles, Tamkivi said these were “very focused on producing extremely high-end, extremely precise, extremely expensive equipment”.
Frankenburg, said Salm, brought “affordability and scale to missiles”. Supply chains will be kept short and commercially available components will be used.
The company, he added, had deliberately taken a look at everything that “we use in the supply chain [and made sure it also exists] somewhere else — this will be the gateway to mass manufacturing”.