May 2026: Helsing's $18B, SAP's AI Bet & the Orbit Question

Foreign. Your podcast and YouTube blog covering the German startup scene with news, interviews and live events. Hello and welcome. This Is startup raid IO.

I'm Chris Farnbach. Joining you from New York City. With me is Joe from Frankfurt. I'm mine.

Hey Joe, good to be here. Good to have you. Chris. One more time.

One more time. Yes. We'll talk about this a bit later. Before we start though, just a bit of housekeeping.

Our news cut today runs from April 22nd to May 18th, 2026. Production date is today May 18th and our episode is going to go live on May 28th. This is also now we have at my last episode as co host of the news. We will say more about that at the end but first there's a lot to cover.

Yes indeed, Chris. And the thesis of the month right Itself, I would say. Yeah. So yeah, I mean we've talked about it in the past couple of months already, but what we really see is that the Dach ecosystem, so once again Dach meaning Deutschland, Austria, Switzerland or GSA in English is the abbreviat that the Dach ecosystem is no longer just catching up.

It is producing itself frontier outcomes. It is making great progress. We see companies like Helsing which has just raised $1.2 billion at an $18 billion valuation, making it actually Germany's most valuable startup.

And I think that's really interesting to again seeing how much the military industry is actually influencing startup culture by now. Then we have S.A.P.

s committing over 1 billion euros to acquire an 18 month old AI lab. And as we record this, ISA Aerospace once again going to military Aerial Industries has launch window open right now for its second orbital attempt. Yeah, last time we also covered this in news but the launch attempt didn't work out. The let's go to the macro numbers.

Germany has deployed $3.67 billion across 166 rounds through May, up almost 12% year on year. German acquisitions in 2026 have hit 142, up from a little bit over 100 through April. The defense budget is at 83 billion euros, projected to reach 162 almost double by 2029.

Capital is moving and it's moving very fast, especially considering German government. Yeah, and I mean since it's always fun to be wrong with predictions, let's just put like three on record. Number one, Helsing we just talked about it is going to reach 25 billion within 12 months as A P's prior lab. Number two, that deal is going to trigger at least two more half billion euro corporate AI acquisitions without 18 months in the region.

And number three, at least two more DACH companies will choose Frankfurt over London for their IPO by the end of 2027. I think it's all doable. Why not? Yeah, let's get to it.

Let's get to it. Okay, we've already teased it a bit. Let's talk a bit more about Helsing, which is now Germany's most valuable startup. The lead signal is Helsing.

It's a Munich based company founded in 2021, now raising $1.2 billion meaning they have an $18 billion valuation this time around. The round is led by Dragonier Investment Group and co led by Lightspeed, which is an existing investor of the company. It was oversubscribed multiple times.

Housing remains roughly 80% European owned. So yeah, as I said before, there's a lot of like changing in the markets or it's. This company definitely is part of larger trends here that we can see. I vividly remember like a few years ago 1.

2 billion valuation would have made headline numbers across all of Europe and now there's a startup racing. Yeah, and now you have 1.2. Yeah, now it's the.

It's was raised. Yeah, yeah. I mean, I mean you looked at the valuation of Helsing anyway, right? So yeah, tell me about the trajectory.

Yeah, let us put the trajectory a little bit in context. In September 2024, 5.5 billion. June 2025, 12 billion with Daniel Ek of Spotify back in the round.

We actually wrote about this back then in May 2026, 8 billion. That's what they're tripling in under two years. And this is a company that makes kamikaze drones and battlefield AI software. Yeah, very desperately looking for kamikaze joke here, but I don't know one.

So. Yeah, and also, yeah, we hear it in the news quite often how much more of a role drones are playing in warfare. Their flagship product is called the HX2 drone. It's 12 kg, it has 100 kg kilometer range.

It's AI guided as they say. It operates in GPS denied environments. The Bundeswehr framework that they have. The framework contract is worth up to 1.

46 billion euros. And also Dragon and Lightspeed on their cap table really signals that US growth equity is now more and more committed to European sovereign defense companies. Yes, 18 billion makes Helsing actually Germany's most valuable startup. Taking the crown from Cylinder, this is the largest single dach round in 2026 again meaning Germany, Austria, Switzerland, and likely the largest defense tech round so far.

We have been saying for three, for three episodes indeed that defense procurement is creating venture at scale outcomes. And that's actually proof. Yeah, and there's a, there's also like a deeper structural point to this. So as I said, Helsing Will did all this while remaining majority European owned.

So we see here that it is a sovereign defense company having sovereign ownership. And so the fact that they attracted US growth capital here without surrendering control to some entity in the US might be a model for other European defense startups or at least model that they will try to replicate. The company, Prior Labs, was founded fewer than 15 months ago. Before the acquisition, the company built the Tabular foundation model tfms.

The TAP PFM model series was published in Nature. And the team includes researchers from Google, Apple, Amazon, Microsoft and Jane street, founded by Frank Hutte, Noah Holman and Suraj, Gambia. Sorry for butchering the last name. Yeah.

And now on May 4, SAP announced that it will acquire the company based in Fryborg and it will commit over 1 billion euros over four years to build what SAP is calling a globally leading frontier AI lab in Europe. So yeah, as you said, the, as you hinted at with the details of the deal, the structure here is pretty significant. Prior Labs continues as an independent entity still having offices in Freiburg, Berlin and New York. SAP is not going to absorb the team into the existing R and D of SAP, but building a new frontier AI lab around structured and tabular data, which is the type of Data that runs SAP's enterprise customer base.

SAP always having been one of the secret superheroes and probably, yeah, like the biggest IT success story in Germany for decades now. And interestingly, an 18 month old startup commanding a billion plus investment commitment, that's an extraord that's actually extraordinary by any standard. And it signals something broader. European corporate acquirers are now willing to pay frontier prices for sovereign AI capabilities.

SAP is making its biggest AI bet and it's making it actually in Germany. Yeah, and what we are looking at now is the question whether this will trigger a wave. So I mean it's not hard to predict as if SAP is spending a billion euros on AI sovereignty, that maybe other companies like Siemens, like Bosch, like BMW, are also wondering whether they should do the same. And yeah, so there might be more big large corporate AI acquisitions within the next couple of months or one or two years.

Moving on, as we record this, the launch window for ESA Aerospace's second orbital attempt is literally open. So because it's May 18, the launch window is May 18 to May 24 from Andoya Spaceport space port in Norway. Their Spectrum rocket is carrying five cube sets and one experiment via the ESA Boost program, the European Space Agency and headed for a sun synchronous orbit. The back story.

Yeah, sorry. Space, space is always good. Yeah, the backstory matters here. The first flight in March 2025 failed roughly 30 seconds after liftoff.

March 22 and here and here we really have to say it's a very interesting thing about space we really like. If you look at it from the outside you would always think oh my God, what a. What a failure. But actually in space these like tiny, tiny incremental improvements and having a 30 second lift off, then having like a 2 minute 30 second lift off, this is what they consider a success.

This is why there are so many tries. Yeah, typical startup approach, right? Incremental, incremental improvements. Yeah.

A March 2026 attempt was corrupt twice. One because of a boat in the danger zone and one because of a pressure tank leak. We talked about it. I think.

Esa is seeking 250 million euros at a 2 billion euro valuation. Total raised exceeds 654 million. And if spectrum reaches orbit it will also validate European commercial space flight or yeah, like the. In general the.

The standing of European Europe as an alternative to the US and it almost certainly closes the 250 million euro round of the company. If it fails again, the becomes how much longer their investors will wait for until the like this, like very capital intensive deep tech will generate some revenue. And ESA is not the only space signal. Atmospace Cargo based in lichtenau, Germany raised 24.

7 million euros in a series A led by by Nord and Expansion venture capital. They are building Phoenix to orbital vehicle with an inflatable atmospheric decelerator recovery operations is in the AZ source. And since we're also always giving some German geography classes here for free. This is the state, the city of Liechtenau in what I think should be Bavaria.

And the asshores are islands. Not in Germany, they're actually in the Atlantic Ocean. When we are already at geography. Yeah.

Oh, actually it's in Baden Wurtenberg, so in the southwest, because there is also a Lichtenau only 10km away from where I grew up. But this is Hessian Lichten now this is the Baden Wurtenberg in Lichtenau. Okay, very interesting. Well anyway, this is what we see here though is this is now the third consecutive episode in which we talk about multiple Dach region space Signals.

Last month we talked about ESA and Pavespace, now we're talking about ESA and Atmos. We are seeing more and more that Europe is building an end to end space logistics chain. We have like launches with ESA in orbit, transfer with Pavespace and now return with Atmos. And yeah, we're just seeing that there's a whole ecosystem that is really maturing just beyond those companies that just have a very single like a very specific offering.

Also launching Atmos works for government and defense customers to do use pattern continues space and defense converging on the same cap table. Yeah, true. And again like very interesting over the years how we see companies on the startup scene moving away from IT stuff from apps towards really this like heavy real life uses of like defense or space. And yeah being two industries that are even connected very much.

Moving on, Bitpanda Vienna based 7 million plus users no longer positioning itself as crypto only but rather as a broad investment platform with a B2B rebrand to now called Bitpanda Enterprise. We have Goldman Sachs, Citi and Deutsche bank advising Bitpanda on Frankfurt IPO and on not only an IPO there but an IPO at a $5 billion plus valuation. The timing is actually strategic. The MICA markets and crypto assets compliance deadline is June 30th.

If Bitpanda files before that, it becomes the first major beaker compliant crypto IPO in Europe. They choose Frankfurt over London explicitly citing liquidity concerns. Sounds familiar. Yeah, yeah, well I would say it does because last month we had 1 comma 5 the environmental tech startup shelving its NASDAQ listing so signaling also that New York probably is not the place for them.

And this month we see that bitpunda picks Frankfurt over London. So yeah, we also see here that things are shifting and we see that the IPO geography and landscape is a bit different and that yeah, New York probably still might be everybody's dream but there are viable paths in other trading places as well says the person in New York City. And then there's quantum IQM quantum computers finished German secured 50 million from Plaquerock. They're preparing for SPAC merger with Raaq at a 1.

8 billion pre money valuation operations across Munich and Finland. BlackRock entering European quantum computing. That's also an interesting signal. Yeah, it is a Signal also because BlackRock does not like speculate just at this big scale.

So if they are in European quantum quantum then blackrock here is seeing some kind of procurement pathway. The spec route is unconventional for European quantum company but the Pre money valuation here suggests really serious conviction from the backers. Moving on, spread AI the company in Berlin having had a $30 million Series B IQT. The US intelligence communities venture arm think CIA is on the cap table alongside Salesforce, DTCP Growth and HV Capital.

They are creating an engineering intelligence platform for product life cycle data. They have a dual use AI infrastructure being recognized by both defense and enterprise bias. So also an interesting company here. Yeah, collecting money.

30 million is USB is some some serious signal. So spread AI. Yes, we should add that this segment is the lightning round where Chris started and PrimoGen in Leipzig 4.1 million years seed for the biotech XO Life in Munich 4 million for digital health AI Con X AI in Munich 5 million years Series A for construction AI Reptum in Salzburg, Austria seven figure round for industrial additive manufacturing and the Munich and prodadacht Deep tech pipeline keeps producing.

Yeah, I was just going to say we only have two lightning bolts, but it's not because you mentioned several others. Several other companies here. Yeah. So yeah, once again we think Helsing has a big.

Has a big future ahead. We think SAP might start some kind of trend showing how established companies might buy AI companies or companies in the AI field more and more. And yeah, we think Frankfurt also has a bright future ahead as a tech listing stock exchange. The connecting thread across all three episodes we've done this year is the same Dask.

Startups with sovereign customers think defense, physical products think also space and procurement contracts are winning this cycle. The capital flows, the budget line. It always has. Yes.

And yeah, this is it for the startup news, more or less. But before we close, I have a little personal note. I mean we were hinting at it last episode and at the beginning of this one. This is for now, my last episode as co host of of the news.

I started with. No, sorry, Joe started startup radio in 24. I joined for the first time in May 2015, meaning 11 years, which is a bit crazy. So like if, if someone would have had a child when I was on this podcast for the first time, this child probably might now move on from elementary school to middle school or something and get into the difficult years.

Yes, exactly. So yeah, we have covered hundreds of rounds. Some unicorns in the beginning now dozens in the last shows. And we watched the ecosystem in Germany, Austria and Switzerland grow from like a little footnote in European, let alone worldwide winter worldwide venture capital.

Very hard thing to say in with a German accent to something that now is really commanding global attention. It has always been fun here in our podcast corner. And yeah, I don't know what to say. Well Chris, I could say it has been a privilege.

Yeah, yeah, privilege. And honor has been all mine. I will leave the show in your good hands. Knowledge, knowledgeable hands.

So you will continue the news for now as a solo host. The form format is going to stay the same. Our standards will stay the same, the thesis is going to stay the same and I think I might keep on listening and have a little side note every once in a while and maybe I will show up. And yeah, as we said, this is not because of some behind the scenes bickering.

This has to do with me taking over a new job and having to focus on duties over there. And you'll stay on as advisor behind the scenes for the schedule going forward. Our next news episode covers the the remaining period through late June and goes live on July 2. We move to bi weekly publication for July and August and in September we return with a summer wrap up, likely two pieces including our H1 2026 review.

Yeah. So yeah, everybody take this as a hint being the right cadence for for your for the upcoming months because summer usually is a bit quieter in European ventures and so use the bi weekly format to just go deeply on fewer signals. And as always, this is when the best analysis happens, when you're not overly frantic. Chris, last word is yours.

Okay, I will use the last words for something about our topics. I would say Europe does not meet permission to build frontier companies. It just needs to stop asking. Chris, my friend in Far Far Away New York, thank you for spending more than a decade with me covering the German Dach and European startup scene.

We'll miss you very much and hope you come back. At least behind the scenes you'll stay with StartupRate IO for some time to come. Goodbye Goodbye.