Louise Boucher: “Interception Will Define the Next Decade of Defense”

The wars in Ukraine and between Israel and Iran have made one thing clear: saturation works — and the economics of defense are being rewritten.

On some nights, more than 600 drones have been fired toward Kyiv. Each wave forces Ukraine to spend orders of magnitude more than its aggressor to defend itself. The same pattern played out in Israel: each round of Iranian drones and missiles cost Israel tens of millions to $200 million per day to intercept. A month-long war with Iran could cost around $12 billion. In the first week alone, Israel spent roughly $5 billion, or about $725 million per day.

The reason is simple. Most of Iran’s projectiles cost only tens of thousands of dollars, especially the Shahed family, while Israeli interceptors cost 10 to 100 times more per shot. That asymmetry — between cheap offense and expensive defense — is now shaping procurement policy across the West.

Solving this equation has become an urgent need. Russian drones have been spotted flying systematically over airports, power plants, and military bases from Poland all the way to Belgium. For the first time, European governments are realizing that they must protect not just capitals but thousands of dispersed critical sites — from energy infrastructure to data centers. This calls for more modular, smaller systems that can be deployed at scale. 2026 is expected to be a tipping point. Russian Shahed production is ramping aggressively: current output is ~2,700 Shaheds per month, about five times the rate recorded in 2024 — a scale that will materially change attrition and air-defence dynamics.

The EU’s plan for a “drone wall” along its eastern border is only the start. The UK, Germany, and France have already announced interception contracts in the €100–400 million range. Interception is set to become the backbone of European defense spending.

Drone-Based Interception

Drone-on-drone interception has moved from theory to practice. The logic is simple: use drones to kill drones — fast, cheap, and autonomous. I find the secretive Swift Beat particularly interesting. Founded and self-financed by Eric Schmidt, the team has quietly tested, iterated, and successfully shot down drones — Shaheds included — in Ukraine. In July 2025, the company signed an agreement with Ukraine to co-produce hundreds of thousands of AI-powered interceptors, and is starting to export capabilities in Poland as well. It remains little-known, but may be the most mature defense project operating in Europe today.

Contestants for “neo-prime” status have also entered the race. Helsing, Harmattan, Destinus, and Stark have all raised significant rounds this year to industrialize interception systems, leveraging deep relationships with ministries of defense and experience from other drone programs — reconnaissance, strike, and surveillance — to double down on interception.

Other teams take a specialist path: Tytan for instance focuses solely on autonomous interception, reasoning that the technical challenge is too deep to pursue alongside broader drone missions. The team has moved fast thanks to a strong dedication to test & iterate in Ukraine.

Missile-Based Interception

Missile interception remains indispensable, but the doctrine is changing. Instead of a few exquisite systems, the goal is to field many attritable ones — missiles cheap enough to be fired in volume without bankrupting the defender. Cambridge Aerospace (UK) has raised large rounds this year to build a European Iron Dome, combining drone and missile interceptors in a single network.

Tiberius (US/UK) has pioneered the push for expendable missiles, developing AI-driven, open-architecture weapons that can be produced and updated at software speed.

Frankenburg, based in Estonia, has a major advantage: proximity to open test zones. The company can test new missiles every week, while most Western firms wait months for range access — a bottleneck that slows iteration more than design itself.

Egide, still in stealth, is developing an electric-based propulsion system that enables faster testing under lighter legislation and promises much cheaper builds.

Even the primes are starting to adapt. Thales is ramping up production of a new anti-drone missile reportedly costing just one-fifth of legacy tactical interceptors.

Directed Energy

The third frontier is energy-based interception: lasers and microwaves that disable drones at the speed of light. A high-energy pulse or beam can down multiple targets at once, with almost no marginal cost.

Here, the primes dominate for heavy equipment. Thales’ RapidDestroyer reportedly destroyed over 100 drones during UK trials, at $0.13 per shot. But new challengers are starting to make a dent: Epirus’ Leonidas neutralized 49 drones in a single pulse during demonstrations. Aurelius Systems in the US and Einhorn Defense in Europe are developing laser-based systems for more precise engagements.

There are still some challenges: energy — you need a powerful pulse; dependence on weather conditions; and mobility, since these systems rely on large parabolic antennas.
The energy demand is so vast that, if microwave weapons are unlocked at scale, they could open a new category of military technology — one that ties energy generation directly to defense capability. Nuclear micro-reactors suddenly start to make sense.

Overall, it won’t be a single product or company that reaps all the rewards. Interception will rely on a toolkit of complementary systems, each suited to specific missions — battlefield, critical infrastructure, mobile operations.

But the need is now so urgent in Europe that the first company able to demonstrate repeatable, at-scale interception is likely to capture a large share of the first national contracts.

Fundraising

• Valthos (US) raised $30 M from Founders Fund and Lux Capital to build biosecurity software that detects emerging biological threats and updates countermeasures in real time.
• Tycho AI (US) raised $10 M from FirstMark to advance autonomous-flight software for UAVs.
• 1001 AI (UAE) raised a $9 M Seed from General Catalyst and Lux Capital to build AI infrastructure optimizing operations in aviation, logistics, and construction across the Middle East.
• Vermeer (Ukraine) raised a $10 M Series A with Draper Associates for its vision-navigation and autonomy software.

Defense tech continues to mature, with more consolidation and critical milestones hit:

• Firefly Aerospace (US), a 10-year-old launch and spacecraft company based in Cedar Park, TX, agreed to acquire SciTec, a defense analytics firm focused on missile-warning and space-domain awareness, for $855 M in cash and stock — roughly a 9× revenue multiple.
• Govini (US), often described as a Palantir competitor, reached $100 M in revenue and raised $150 M from Bain Capital.

Author: Louise Boucher, Defense VC and Member of the European Defense Investor Network.

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