Defense & Military
Germany Orders €536 Million Strike Drones from Domestic Startups
Germany commits €536 million to buy strike drones from startups Helsing and Stark Defence, aiming to equip troops with AI-enabled systems by 2027.
This article summarizes reporting by Reuters and additional industry data.
The German government has initiated a significant shift in its defense procurement strategy, moving to acquire strike drones worth approximately €536 million ($638 million) from domestic startups rather than established defense giants. According to reporting by Reuters, the deal involves two German technology companies, Helsing and Stark Defence, and is part of a broader rearmament effort following Russia’s invasion of Ukraine.
This procurement is intended to equip the Bundeswehr’s 45th Tank Brigade, which is currently stationed in Lithuania to bolster NATO’s eastern flank. The decision highlights a growing emphasis on artificial intelligence and software-defined warfare, as the selected systems are designed to operate in environments where GPS signals are jammed, a critical lesson learned from the ongoing conflict in Ukraine.
The initial order is reportedly part of a larger framework agreement that could eventually reach a value of €4.3 billion over seven years. By selecting agile, tech-focused firms, Berlin is signaling a departure from traditional procurement cycles, though the move has generated scrutiny regarding the maturity of the technology involved.
According to the proposal submitted to the Bundestag’s Budget Committee, the initial contract is split between the two companies, with deliveries expected to begin by early 2027. The framework agreement sets high ceilings for future spending, indicating a long-term commitment to these platforms.
Reuters notes that this investment is a direct response to the “Zeitenwende”, Germany’s historic turning point in defense policy. The goal is to rapidly field “loitering munitions,” often called kamikaze drones, that can provide tactical advantages to forward-deployed units.
The selection of Helsing and Stark Defence represents a bet on “sovereign tech” and AI capabilities over traditional hardware manufacturing.
Helsing, a Munich-based defense AI “unicorn” backed by Spotify founder Daniel Ek, will supply the HX-2 strike drone. The system is catapult-launched and features a range of up to 100 kilometers. Its primary differentiator is advanced artificial intelligence that allows terminal guidance without reliance on GPS, making it resilient against electronic warfare.
However, the choice has not been without controversy. Industry reports indicate that Helsing’s drones have faced mixed reviews in operational environments. According to reporting summarized by Bloomberg, some units deployed in Ukraine experienced issues with takeoff and susceptibility to jamming, leading to a pause in certain orders. Helsing has disputed these characterizations, citing successful combat trials. Berlin-based Stark Defence, backed by investors including Peter Thiel and the NATO Innovation Fund, will provide the OWE-V “Virtus.” This system offers Vertical Take-Off and Landing (eVTOL) capabilities, eliminating the need for a catapult and increasing mobility for ground troops.
Like Helsing, Stark Defence has faced scrutiny during the testing phase. Reports from comparative trials in October 2025 suggested the system suffered failures, including crashes and missed targets. In response to these reports, the company has described such incidents as part of a “disciplined experimentation” process typical of rapid agile development.
A notable aspect of this procurement is the exclusion of Rheinmetall, Germany’s largest defense contractor. Reports suggest that Rheinmetall was unable to provide a functioning demonstrator of its competing drone in time for the trials, leading the government to favor the faster-moving startups.
We view this procurement decision as a high-stakes gamble by the German Ministry of Defense. By bypassing a titan like Rheinmetall in favor of venture-backed startups, Berlin is prioritizing software speed and AI integration over traditional industrial reliability. This aligns with the modern battlefield reality where software updates are as critical as ammunition.
However, the reported test failures and operational hiccups in Ukraine introduce significant risk. If these startups cannot scale production or resolve technical glitches by the 2027 delivery target, the 45th Tank Brigade may be left without critical capabilities. This deal serves as a litmus test for whether European defense procurement can successfully adapt to the “Silicon Valley” model of development.
When will the drones be delivered? Why was Rheinmetall excluded? What is the total value of the contract?
Germany Pivots to Startups for €536 Million Strike Drone Order
Details of the Procurement Deal
The Companies and Capabilities
Helsing and the HX-2
Stark Defence and the “Virtus”
Strategic Implications and Industry Impact
AirPro News Analysis
Frequently Asked Questions
The first operational systems are scheduled for delivery to the Bundeswehr by early 2027.
Reports indicate Rheinmetall was excluded from this specific contract because it could not present a working demonstrator of its drone in time for the comparative trials.
The immediate order is valued at €536 million, but the framework agreement allows for spending up to €4.3 billion over seven years.Sources
Photo Credit: Helsing