🤖 Factory Before Code

Helsing 🇩🇪 runs a 1,700 square metre factory in Plymouth. Before pouring concrete, the Munich firm had already locked down its dual-use classification, export licences and end-user protocols. Not out of virtue. Without that paperwork, no defence ministry signs, no fund follows, no drone crosses a border legally. This sequencing, compliance first and product second, is exactly what most European defence tech founders ignore.

Most build the product first. The investor opens due diligence, finds an algorithm co-developed with a university under no clear IP agreement, a grant clause limiting commercial use, a procurement contract drafted without export controls in mind, and walks. Six months gone. Often permanently.

European defence startups raised €2.3bn in 2025, more than double the year before, with specialist funds tripling in three years. That inflow doesn’t make investors generous, only pickier. Tekever 🇵🇹, whose drones fly maritime surveillance for several NATO members, built its certification architecture into the spec from day one. Blindspot Technologies 🇨🇿 sells DDoS protection for critical infrastructure, NIS2-aligned from the start. They ship while the Eurodrone programme, launched in 2015 for €7.1bn across four states, still hasn’t flown. Paris has just pulled out. Its air force chief had named the thing himself: « yesterday’s drone, available tomorrow. »

Helsing’s €600m Series D leans on Lightspeed, Accel, General Catalyst. Daniel Ek 🇸🇪 chairs the board, Saab is on the cap table, but the headline cheques are American. European money shows up at seed and Series A, then thins out at industrial scale: more than 60% of rounds above €200m are US-led. Sovereignty stops at the cap table, and nobody on this continent has solved that. The supposed European defence moment is being financed largely from Sand Hill Road.

Brussels launched AGILE in late March: €115m for defence startups, four-month award cycles. Trivial against the 16% of the US defence budget that goes to R&D, versus 4% on this side. The regulatory mesh weighs heavier than any subsidy. Cyber Resilience Act from 2027, NIS2, AI Act covering civilian dual-use derivatives. What Silicon Valley reads as bureaucracy is the access filter to European defence procurement. The obvious counter is that a US fund can simply hire a Brussels lawyer. True enough. It can’t reproduce ten years of regulator relationships in a board pack. Compliance by design, the one thing those ten years actually built, is the one asset Menlo Park can’t pack into its luggage.