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Two start-ups supported by tech visionaries Daniel Ek and Peter Thiel have secured contracts totaling as much as €4.3 billion to provide kamikaze drones for Germany’s military. This marks Germany’s significant entry into unmanned weaponry.
Munich-based Helsing has been awarded an initial contract worth €269 million to supply drones to the Bundeswehr, the German armed forces, according to procurement documents reviewed by the FT.
This contract includes an option to purchase more HX-2 drones, with potential future contract value reaching €1.46 billion, backed by Spotify’s Swedish founder Ek.
Berlin-based Stark, supported by US entrepreneur Thiel, has a similar contract initially valued at €269 million, which could expand to €2.86 billion. The reason for the larger potential value of the Stark contract, which is for its Virtus drone, remains unclear.
The exact number of drones to be delivered by each company has been withheld from public records. The news about the contracts was first reported by Der Spiegel.
This contract award comes despite some setbacks for Stark. The company failed to meet target performance during two tests conducted with the UK and German armies—an issue the company attributed to the learning curve involved in testing new technologies.
Helsing has also faced scrutiny regarding the performance of its drones in Ukraine. A recent report by Politico mentioned that the company successfully hit its target only five times out of 14 during deployments in the Donbas region, citing an internal report from the German defense ministry.
Despite these challenges, Helsing expressed pride in their combat performance, achieving hits on a Russian tank, a logistics truck, and two howitzers, even amid electronic warfare challenges. The company added that the HX-2 has received approval for use in front-line situations by the Ukrainian army.
Carsten Breuer, the head of the German armed forces, noted during a recent visit to trials that he was pleased with the drone performance.
Germany is advancing its military procurement to equip its leading new brigade in Lithuania with the latest technology to counter potential threats from Russia.
Both drone contracts include an “innovation clause,” ensuring that the companies will provide the most current technology to the Bundeswehr.
This reflects the urgency among procurement officials to keep pace with the swift advancements in drone technology, particularly evident in the ongoing conflict in Ukraine.
The contracts pose a setback for the German arms manufacturer Rheinmetall, which was anticipated to secure a €300 million deal but missed out due to delays in developing its own armed drone, the FV-014, also known as Raider.
However, Rheinmetall could still be considered for a contract later this year, contingent on favorable test performances of its drones. The company is expected to demonstrate its technology to the Bundeswehr in the upcoming weeks.
The contracts with Stark and Helsing must be approved by members of the Bundestag, who hold the authority to ratify or reject significant government spending on armaments, with decisions anticipated in the coming weeks.
The German defence procurement agency and defence ministry did not immediately respond to requests for comment.
Key Takeaways
- Two start-ups are set to supply kamikaze drones to Germany’s military, totaling up to €4.3 billion.
- Helsing and Stark have secured initial contracts worth €269 million each, with potential future contract values significantly higher.
- The contracts include an innovation clause to ensure cutting-edge technology is provided.
- Concerns were raised about the performance of both companies’ drones during recent tests.
- The contracts are part of Germany’s urgent procurement strategy to enhance military capabilities.
FAQ
What are kamikaze drones?
Kamikaze drones, also known as loitering munitions, are unmanned aerial vehicles designed to carry an explosive payload that can be used against targets by crashing into them.
Why did Germany choose start-ups over established companies?
The decision reflects a desire to embrace innovative technologies and the challenges posed by rapid advancements in drone capabilities.
What are the next steps for these contracts?
The contracts must be approved by the Bundestag, and members are expected to make a decision in the coming weeks.
