Lakestar, which manages more than $6bn, states that the fund was oversubscribed, without revealing its initial target or the identities of all its investors. It describes it as the largest European institutional fund of its kind, raised exclusively from private capital.
The investors announced include institutions, strategic players and major industrial family offices. The British defence group BAE Systems has confirmed its participation. In June, the company announced a total commitment of €50m to defence-related venture capital initiatives, including €25m earmarked for funds managed by Lakestar and Expeditions. The breakdown between the two funds has not been specified.
From drones to space technology
Resilience I is to fund technologies with potential applications in both the civilian and military sectors. Lakestar cites advanced autonomous systems, defence software utilising artificial intelligence, domestic drone production, missile technologies, space infrastructure and maritime platforms.
The portfolio built up by Lakestar since 2017 includes, amongst others, Helsing, a European specialist in military software based on artificial intelligence; the launch vehicle manufacturer Isar Aerospace; ARX Robotics; Auterion; Cambridge Aerospace; Frankenburg Technologies; Kela; Kraken Technology; Tekever; and Tytan Technologies.
In total, Lakestar lists around twenty investments in this sector, in addition to several companies that are still being kept confidential. These companies are reported to have collectively raised more than $5bn, generated several billion dollars in revenue and employ more than 5,000 people. These figures have been provided by the fund manager and have not been independently verified.
“Freedom does not come for free. European sovereignty and capabilities in critical technologies are a key concern for us all,” says Klaus Hommels, founder and chairman of Lakestar.
“Europe and its Western allies need sovereign technology capital in the defence and dual-use technology sectors,” the investor continues. He says he began backing companies in the sector nearly ten years ago, before defence became a widely accepted focus for European venture capital.
A council combining defence, diplomacy and technology
Lakestar has also set up an advisory board comprising two former European military chiefs, former US Secretary of State Mike Pompeo and British tech entrepreneur Martha Lane Fox.
General Sir Nicholas Carter led the British armed forces, whilst General Volker Wieker was the most senior military official in the Bundeswehr. According to Lakestar, their presence is intended to help participants navigate the decision-making and procurement procedures of governments and armed forces.
“For those building the infrastructure of Western security, there is no better group of partners for understanding the institutions that will determine the winners,” says Klaus Hommels.
The inclusion of BAE Systems among the investors should also provide start-ups with access to industrial expertise and defence markets. When announcing his investment, Klaus Hommels said that Europe was “at a pivotal moment in redefining its security and technological sovereignty”.
