A German drone startup is about to land a giant check. The lead investors are an aerospace giant and a private equity heavyweight, and the valuation has more than doubled in less than a year.
Airbus and Blackstone are in talks to lead a roughly €600 million ($703 million) funding round in Quantum Systems, a Peter Thiel-backed defense tech company that builds electric drones. The round could value the company at up to €7 billion.
Quantum Systems makes electric vertical take-off and landing drones - the kind that can lift off without a runway and carry sensors for both military and commercial use. Airbus brings an aerospace name and a defense supply chain, while Blackstone brings the capital.
Balderton Capital, the UK venture firm that already backs Quantum Systems, is also in talks to join. An industry partner, a private equity heavyweight, and an existing venture firm all in one round means this deal is wired in deep.
The terms aren't final, and details can still change before the round closes.
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Europe is in the middle of a defense spending surge, with governments rebuilding stockpiles, ordering new systems, and writing checks to startups that can move faster than legacy defense contractors.
German drone makers have been front and center. Quantum Systems was founded in 2015 and raised about €340 million across two rounds last year, with a Balderton-led Series C extension in November lifting its valuation past €3 billion.
This new deal more than doubles that valuation in under a year. Pulling in Airbus as a corporate backer and Blackstone as a major financial backer signals the company is moving from venture darling to strategic asset.
A jump from €3 billion to €7 billion in less than 12 months only happens when both order books and political will are pointing the same way. For investors tracking defense tech, that's a strong signal about where the next wave of capital is flowing.
The risk is that this is the peak. If European defense budgets get pared back or the Middle East war winds down faster than expected, the runway for these valuations gets shorter.
For now, the money keeps coming.
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