(Bloomberg) -- Drone maker Tekever has raised €70 million ($74 million) in funding, which the company says it will use to expand into new markets and develop bigger, faster unmanned aerial systems.
The round was led by Scottish investment company Baillie Gifford & Co. – a backer of Airbnb Inc., Spotify Technology SA and SpaceX – and the NATO Innovation Fund, a venture capital fund connected to the North Atlantic Treaty Organization that invests in defense and security startups.
Tekever, founded in Portugal, designs and builds drones for aerial surveillance that can serve as the communication and navigation hub for swarms of smaller drones. It has worked with the UK’s Home Office to search for small-boat migrant smugglers in the English Channel and with Ukrainian forces for long-range surveillance.
Tekever is part of a new generation of European technology companies seeking to disrupt traditional defense players, as wars in Ukraine and Gaza have attracted funding to the sector. Dual-use drones have been a key growth area, changing the way wars are fought from the skies while also finding applications in the commercial sector.
Tekever has about 800 employees across offices in Portugal, the UK and France. It plans to use the funds to expand its European footprint, including opening a second manufacturing facility in the UK and setting up shop in the US, Chief Executive Officer Ricardo Mendes told Bloomberg News in an interview.
Mendes said that Tekever’s growth is part of a movement toward more tech sovereignty in Europe, a key priority in former European Central Bank President Mario Draghi’s long-awaited report on the region’s competitiveness.
“We have the war in Ukraine on our borders and we are lagging behind in terms of technological growth,” Mendes said.
Tekever has been profitable for a “number of years” and bootstrapped until its previous funding round of €20 million in 2022, Mendes said. He declined to disclose the company’s valuation.
The firm has been working on building its largest-ever drone, the ARX, which can take off with a maximum weight of 600 kilograms – three times more than its next biggest model. That means it can fly faster for much longer and carry swarms of smaller drones with specialized sensors that can be released mid-flight to get a closer look at targets – a combination that Mendes describes as the “holy grail of surveillance.”
This gives Tekever the opportunity to develop an “ecosystem” that other small drone makers can plug into, Mendes added.
NATO Innovation Fund partner Patrick Schneider-Sikorsky said his team took a “deep dive” on the drone market and was drawn to Tekever’s approach to mid-sized, dual-use drones, which provide an alternative to enormous defense contractors that may only sell to governments.
“Tekever is far more versatile, with civilian and defense applications,” Schneider-Sikorsky said, adding that the company is “fully European.” This is critical for customers who “really prioritize technological independence, security and sovereignty,” he added.
The UK’s National Security Strategic Investment Fund and Silicon Valley investment firm Crescent Cove Advisors also participated in the round.
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