🧠 Food for thought

Implications, context, and why it matters.

Future contracts drive the valuation

• Helsing’s US$18 billion valuation does not rest on current sales. Sacra, a research firm that analyzes private technology companies, estimates revenue at about US$10.4 million in 2023 1.
• Investors are betting on government orders signed since then. They include an initial 269 million euros (US$316 million) German deal for HX-2 loitering munitions, a type of drone built to wait over a target area before striking. The wider option could reach 1.5 billion euros (US$1.72 billion), though the Bundestag budget committee capped allocations at 1 billion euros (US$1.18 billion) per producer and extra purchases need more parliamentary approval 1.
• Helsing is aiming for software-like margins of 40-50%. Traditional defense contractors usually make 5-10%, which helps explain a venture capital-style valuation 1.

Helsing is testing a new defense model in Europe

• European governments are buying more AI tools from startups such as Helsing. That does not mean they are broadly funding those companies directly or stepping away from groups such as Rheinmetall, a German defense company, which can still partner with Helsing or compete with it 1.
• Helsing is buying an aircraft maker and an underwater drone company. The goal is to pair its own AI with hardware it controls, similar to US rival Anduril, a defense technology startup known for building autonomous military systems 1.
• The plan carries risk. Critics have cited drone launch problems and faulty AI in the HX-2, which raises doubts about whether Helsing can become a dependable large-scale maker of military hardware 2.