Europe's Future Defence Prime

Welcome to London Tech Weekly. Each week, we’re going to highlight a startup or VC firm in London that’s doing cool shit. And see some of the deals that’s happened right here in London in the past week. If you’re looking for something to do, check out my pick at the end.

Today, we’re talking about defence. And how one British-Greek company is building itself as a defence prime for Europe.

Our freedom is at threat. For the first time since the end of WW2, there’s risk that the major powers in Europe will be at war on our continent.

Something the history of conflict has taught us that those who master technology have the upper-hand. Steam-power accelerated the British Navy all over the world and made Britain the global power. When America split the atom, WW2 swiftly came to an end.

We’re now in an age of artificial intelligence and whoever finds the most applications for it on the battlefield will pull ahead.

The defence industry is controlled by a few. At the end of the Cold War, The West felt it no longer needed to build as many weapons as it did. There was no longer a threat after all. This led to consolidation, causing only a few companies to remain, but these companies now control the contracts and have become sluggish. Defence is ripe for innovation.

In America, there are positive signs. Thrown out of Facebook, Palmer Luckey of Oculus VR co-founded a defence prime named after Tolkien’s most famous sword, Anduril. Naturally, Anduril’s focus is the US and lately they’ve expanded to Australia. But in Europe, their presence isn’t quite as large (apart from in Ukraine and the Baltics).

In Europe, we may soon have an Anduril of our own.

Founded in Athens by Dimitrios Kottas and headquartered in London, Lambda Automata aims to build the “digital backbone for the age of autonomous warfare”. In October 2023, Lambda raised €6m in seed funding led by London-based Air Street Capital.

Detecting and tracking threats across land and coast is LAST (Lambda Autonomous Surveillance Tower). Using video and thermal feeds, it identifies potential threats with AI and plots them on maps. Operators can then send a fleet of camera drones to get closer to the possible danger for a better view of what exactly it is.

LAST is fixed. So Lambda have made a smaller, portable, version - M(an)P(ortable) LAST. You can imagine troops deploying it to gain more insight of the battlefield. And there’s Jericho, a comms device which connects to satellite, 3G and 4G networks and charges drones.

It’s one thing to control drones and another to make them. Lambda recently bought Smart Flying Machines, a manufacturer of them. Doing this is a great vertical integration opportunity that they could integrate into LAST to counter aerial threats. Anduril offer something similar with their Roadrunner product.

When the Houthis were causing trouble in the Red Sea was an expensive problem. A weaponised drone would cost the Houthis ~£16,000. To take it down with a missile? ~£1m. Bringing down this cost is critical to sustaining these defensive missions. Deploying an intelligent sentry post sending counter-drones reduces the operational cost of having a fully-manned ship guarding shipping lanes.

Politicians in Europe have, thankfully, realised the threat on our doorstep.

Whichever party leads our country after the next election, both the Conservatives and Labour have committed to a 2.5% GDP spend on defence. Labour have also committed to reforming procurement policy. But they haven’t said if this means looking towards companies like Lambda.

Germany met its 2% NATO commitment for the first time in over thirty years this year. And it’s suggested this could increase to 3% or 3.5%. With Northern and Eastern Europe readying themselves for the Russian threat, expect greater defence spending across the continent.

As we begin to look reality in the eye and realise we are now in a changed world, our attitude to defence needs to change. The threat is real. And we need more people building to defend our continent. Hopefully, Lambda Automata can be a beacon to inspire others.

What happened last week?

• Spectrum.life, clinically backed digital health solutions, raised €17m.

• Swiipr, a travel paytech company aiming to innovate compensation payments, raised £6m.

• StructureFlow, a LegalTech, raised $6m.

• FintechOS, an end-to-end financial product management platform, raised $60m.

• Viable, a FinTech platform for consumer brands, raised $3.1m.

• Exactly.ai, a generative AI platform for art, raised $4.3m.

Harry’s pick

If somehow you haven’t been to Flat Iron, you should go. One of the biggest reasons for its popularity is that not only is the food good, but it’s well-priced for London. So are the cocktails.

You can go there, have several cocktails, a nice steak and chips and it’ll only cost about £50. And after, you get their complementary (delicious) ice cream.

Flat Iron have restaurants all over London, so there’ll no doubt be one near you.

An election is coming. And from July 5th, the next government will shape policy for the following five years. If you’re a British, Irish or Commonwealth citizen (residing in the UK), you can vote. So don’t forget to register if you haven’t.

When manifesto pledges become clearer, I’ll be writing here about what the next government looks like for our tech sector.

Democracy is beautiful and we should never take for granted what it’s taken to defend our right to vote.