The race for European rearmament is no longer being played out in the meeting rooms of venture capital funds. The German startup Stark, specializing in attack drones, has just raised 500 million euros at a valuation of 3.2 billion euros. Investors include Founders Fund, the fund co-founded by Peter Thiel, Sequoia Capital, the NATO Innovation Fund, Project A and Döpfner Capital.
This operation comes a few months after Stark obtained a major contract with the Bundeswehr for the supply of attack drones for the German armed forces. It also intervenes in a sensitive political context. Faced with questions from several German elected officials regarding the influence of Peter Thiel, the company took the initiative of sending a letter to the Bundestag to clarify that the American entrepreneur held less than 10% of the capital, had no seat on the supervisory board and did not benefit from any particular rights.
But to reduce this operation to a controversy surrounding Peter Thiel would be to miss the real issue. Stark’s raising illustrates a much deeper transformation: the emergence in Europe of a new generation of defense industrialists financed according to Silicon Valley methods.
The drone as a new European strategic product
The invasion of Ukraine shook up Western military doctrines. Drones, long considered complementary systems, have become central equipment on the battlefield.
The Ukrainian experience has demonstrated that a drone costing a few tens of thousands of euros could neutralize equipment worth several million. It also showed that beyond technical performance, the ability to produce quickly and massively became a determining strategic factor.
It is in this context that Stark established itself, with its loitering munition type attack drones, capable of identifying a target then destroying it upon impact. Last February, the company was among the companies selected by Germany to supply this type of equipment to the Bundeswehr as part of a program estimated at around 300 million euros.
This contract profoundly changed the trajectory of the company, which was until then perceived as just another technology startup. Since then, Stark has become a credible military supplier in the eyes of international investors.
The fundraising announced this week should now allow the company to accelerate its industrial capacities, strengthen its engineering teams and support the ramp-up of its production capacities. The company already has an industrial presence in the United Kingdom and intends to meet rapidly growing European demand.
The real parallel: Anduril rather than Helsing
The comparison with Helsing often seems natural, both companies are German, benefit from high valuations and embody the new wave of European technological defense.
However, their models differ profoundly. Helsing mainly builds software, artificial intelligence systems and data fusion platforms for the armed forces. Stark develops physical weapons systems and associated industrial capabilities.
The most relevant parallel actually lies on the other side of the Atlantic; for several years, Anduril has been redefining the American defense landscape. The company founded by Palmer Luckey has built its growth on an integrated approach combining software, autonomy, artificial intelligence, sensors and physical systems. It is not positioning itself as a simple technological supplier but as a new defense industrialist.
Stark seems to be following a comparable trajectory, the rapprochement is all the more striking as Founders Fund is among the major investors in both companies. In both cases, Peter Thiel’s fund supports companies that seek to compete with incumbent manufacturers by developing faster innovation cycles and technological architectures natively designed around software.
A broader question thus arises: are American investors seeking to reproduce in Europe the transformation that they have already initiated in the American defense industry?
The return of the military-industrial complex, venture capital version
For decades, large European defense groups have followed a relatively stable model, relying on public orders, bank financing, bond issues or stock markets. Industrial cycles were measured in decades and military programs sometimes spanned several technological generations.
Companies like Stark, Helsing, Shield AI or Anduril are today financed by venture capital funds. They raise several hundred million euros even before having reached the industrial maturity of their traditional counterparts.
This development also marks the appearance of a new military-industrial complex, which is no longer structured around traditional financial markets, but around the growth logic of venture capital.
Investors no longer only finance technologies, but the creation of future industrial prime contractors capable of capturing a significant share of Western military budgets.
The phenomenon goes far beyond Europe. In the United States, Founders Fund, Andreessen Horowitz, General Catalyst and Lux Capital have gradually transformed defense into a strategic investment category in its own right. The military industry is thus becoming one of the new areas of expression for global venture capital.
Why Europe continues to depend on American capital
The controversy surrounding Peter Thiel masks a more structural reality, because if Stark welcomes Founders Fund to its capital, it is also because European alternatives remain limited.
Europe today has a rapidly expanding ecosystem of defense startups, currently boosted by considerable military needs and sharply increasing public budgets. On the other hand, it still lacks investors capable of supporting financing rounds of several hundred million euros on their own.
The United States has long had market depth that allows funds like Founders Fund or Andreessen Horowitz to quickly deploy several hundred million dollars on a player deemed strategic.
In Europe, this type of capacity remains rarer, and this is where the paradox must question us: European governments finance the rearmament of the continent, European armies are the customers, defense tech startups are European, yet a significant part of the creation of financial value continues to benefit American investors.
Some German politicians were offended by this control. However, the question goes beyond the personality of Peter Thiel and concerns Europe’s capacity to finance itself the companies it considers strategic.
A sovereignty still dependent
The debate could quickly take on another dimension. In recent years, the United States has demonstrated its ability to use export controls as an industrial and geopolitical policy instrument. Advanced semiconductors, chip manufacturing equipment or certain technologies linked to artificial intelligence offer several examples.
Defense could be concerned, because even when a company remains legally European, the presence of American investors, American components or technologies subject to certain regulations can create indirect forms of dependence.
For now, this question remains largely theoretical in Stark’s case. It could nevertheless become central as Europe seeks to define what strategic autonomy really means in the industrial domain, another question that arises for European and EU member politicians.
