Building military drones has become a business for many startups in Ukraine

Building military drones has become a business for many startups in Ukraine

September 2021. Las Vegas. Among the drones presented at the UAV Expo, the international trade fair on commercial aircraft, there is an autonomous-driving aircraft that causes a particular sensation. His name is Hammerhead. “A name given in honor of the hammerhead shark. It looks like him,” said Vitaliy Kolesnichenko, creator of the drone and founder of Airlogix.

A startup based in Kiev, but until then doing business mainly in the United States. Especially in Texas, where he sold his planes to fertilize land. Hammerhead (hammer head) aroused everyone's attention. For aesthetics, flight capabilities, durability and possible applications, especially related to artificial intelligence. All characteristics that a few months later would upset the fate of the company. of its founder. Dragged into the upheaval of destinies that has been the war between Russia and Ukraine for a year and a half now.

Airlogix is ​​one of the symbolic companies of the second phase of the war. The one that started from March onwards. When Kiev first announced that it would finance hundreds of millions of dollars for the development, construction and deployment of drones.

Kiev celebrates the Drone Army. The statistics of military actions

On June 8, 2023, a tweet recounts the escalation of what is happening on the battlefield. The author is Mykhailo FedorovDeputy Prime Minister of Ukraine and Minister of Digital Innovation:

“Set a new record by the Army of drones in the Zaporizhzhia area. One drone, three destroyed Russian tanks, two armored personnel carriers and an ammunition dump. Our bomber drones are working hard. Please continue to support the Ukrainian Drone Army”.

The tweet is accompanied by a video. A drone drops bombs. With millimeter precision. About Russian tanks (and presumably soldiers).

The escalation of the drone war is celebrated from Kiev. Reports from the front tell us that it is the weapon that is changing the tide of this phase of the war. And it is also thanks to companies like Airlogix, Kray, Kvertus, Uadcom, Abris. Drone manufacturers. Who have abandoned civilian purposes to rethink themselves in the war economy that has characterized Ukraine since February 2022. A difficult choice. Because sooner or later the war will end and they will have to rethink themselves again. Perhaps. But which tells of a strong link between innovation and the military purposes of the new technologies developed.

The rise of drones as weapons during the Russia-Ukraine war

Drones are formidable weapons in battle. They are remote controlled, can carry a good number of missiles, are difficult to detect and can hit their targets with extreme accuracy. Also thanks to the use of artificial intelligence. Plus they're cheap. About $5,000 is the average price of a drone used to wage war. An often invisible weapon. Ethically questionable. And lethal.

Not everyone agrees with the mix of technologies and military purposes. And institutional investors tend to steer clear of these companies. Because it is true that today, in times of war, orders arrive. But companies that produce military technologies often have to submit to government logic. In terms of production. Of development. Sometimes costs. Which venture capitalists don't like.

Investor doubts. But drones are perfect (albeit debatable) weapons

"Military technology is something investors try to avoid. It's usually very tied to the government and can be subject to various restrictions," Ivan Petrenko, head of the Ukrainian Catholic University's venture capital fund Angel One, explained to Sifted. "We've received inquiries from a few manufacturers, but none that would catch our attention."

"As a venture capital fund we are not allowed to invest in weapons and munitions. For this reason, we focus on dual-use technology in defense scenarios," said Tobias Enke of German VC Project A, who has not invested in no Ukrainian drone startup – but who recently published a blog post asking whether VCs should be more interested in defense tech.





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