In the escalating drone warfare landscape, the race to develop and deploy counter-drone technologies is intensifying, with startups at the forefront of innovation. Frankenburg, a startup specializing in low-cost, AI-based anti-drone missile systems, is emerging as a key player in this rapidly evolving sector. Resilience Media has learned that Frankenburg has raised capital approaching $50 million at a valuation of around $400 million, signaling a significant milestone for the company and underscoring broader trends in defence technology.
The funding round, which sources say is closed and will be announced soon, brings in a slate of new investors. Current backers include London’s Blossom Capital, Shellona Ltd, Estonian private equity firm MM Group, and Kuldar Vaarsi, the CEO of Milrem Robotics. The investment not only highlights Frankenburg’s growth but also reflects the increasing focus on counter-drone technology as drones become more sophisticated and prevalent in conflict zones.
Frankenburg was founded in early 2024 by prominent Baltic technology founders and investors, initially aimed at providing fast-to-produce, cheaper anti-drone missile systems to aid Ukraine. However, the company’s mission has expanded as drones have become more advanced and swarm-based tactics have become commonplace. The growing threat of drone incursions has prompted more countries to seek updated defence technologies, driving attention to companies like Frankenburg.
The round of funding represents a substantial step for Frankenburg, which has previously disclosed less than $5 million in seed funding, according to PitchBook data. The company has used its initial funding to expand its geographical footprint, establish a UK headquarters in December 2024, and develop and test its systems. In January, Frankenburg announced a partnership with Babcock, a UK prime, to develop a maritime counter-drone system to protect ships, ports, and offshore assets.
Frankenburg boasts an impressive network of advisors and investors, including Taavi Madiberk, the CEO and founder of Skeleton Technologies, Martin Herem, a retired Estonian military commander, and Kuldar Vaarsi, who serves as both a strategic investor and board member. Kusti Salm, the CEO of Frankenburg, brings a wealth of experience, having previously served as the permanent secretary in Estonia’s Ministry of Defence and currently holding a directorship at the NATO Innovation Fund.
The funding climate for defence startups remains robust, with record amounts of money being channeled into the sector. This surge in investment is driven by geopolitical threats, evolving weapon technologies, and a shift in military mindset towards accessing startups for innovation. Salm highlighted this trend during an interview at the Resilience Conference, noting the unprecedented availability of private money for developing defence technology and weapons.
While the enthusiasm for defence tech startups is palpable, some investors express concerns about the performance and commercial traction of certain companies. “We hear their product is not really performing that well and their commercial traction and revenues are not that great,” grumbled one investor. However, others remain optimistic about the potential of companies like Frankenburg to make significant strides in counter-drone technology.
As the drone race continues to heat up, Frankenburg’s latest funding round and strategic partnerships position the company as a key player in the defence technology sector. The investment underscores the growing importance of counter-drone solutions and sets the stage for further innovation and collaboration in the years ahead.