When Helsing raised a $223 million Series B round, the tech world saw it as continued confirmation that defense was undeniably back on the investment agenda.
Further confirmation comes today, in news shared exclusively with TechCrunch, in the form of a $5.5 million seed round for the British defense technology company Labrys Technologies, led by Germany’s Project A Ventures. MD One Ventures, Marque VC, Offset Ventures and Expeditions Fund also participated. The funds will be used to expand the development and R&D teams, as well as build the commercial sales team.
Labrys is perhaps best described as Slack-meets-location-meets-payments for both military and humanitarian scenarios. While this is a bit of a mouthful, when you look at the problems the product aims to solve, it starts to make more sense.
What is commonly used in fast-moving situations like a humanitarian crisis is WhatsApp. And — declaring some interest in the matter — I have personal experience of it. From 2015 onwards, when I founded the non-profit organization Techfugees, we found that both refugees and aid workers almost always used WhatsApp to coordinate a response. It was simple, worked on bad networks, was fast and could reveal location. However, its limitations are very obvious. How do you know you are dealing with a legitimate humanitarian? What if they don’t reveal their location? How can you get them resources or money? These are important problems to solve.
As co-founder and CEO August Lersten told me in an interview: “WhatsApp is very problematic when it comes to managing large groups worldwide because communications are end-to-end encrypted. Sometimes it can be very difficult to validate and confirm who you are actually talking to on the other end of the line. And you can’t fit all these different conversations into what we describe as a network coordination tree. If I want to talk to 133 people in Indonesia, I don’t necessarily want to have 133 separate individual communications.”
So a Labrys customer gets an on-screen dashboard where a user — like Slack or Microsoft Teams — can send messages to entire groups or individuals and know their live location. And you can pay them (after fashion).
Labrys Technologies Mobile platform. Image Credits: Labrys Technologies
The startup’s veteran-owned platform essentially “scratched an itch” that the founders uncovered with their own work “in the field.” Lersten is a former Royal Marine commando who led teams across Africa, the Middle East and Asia. Luke Wattam (co-founder and COO) has worked in the UK MoD, FCDO and UK allies.
The Labrys platform, Axiom C2 and Axiom Communicator, enables KYC/E verification, encrypted communications, task management and where individual users can be traced. Finally, it also folds into digital payments through Crypto stablecoins. In other words, you can know who you’re dealing with and know where they are, and there’s a way to pay them. This is especially important when dealing with humanitarian disasters.
As Lersten told me: “I see my people through a geospatial interface. Having that interface is a differentiator from things like WhatsApp and Slack and other communication channels. The second element is communicating with those dots, wherever they are, say, in Afghanistan. And then I want to pay my workforce. I can pay them in USD stablecoins through the same interface.”
Labrys claims the platform has already proven its worth in the field.
It was used in Afghanistan, where it helped evacuate (the company claims) 5,000 persecuted Afghan minorities, as well as being used by Ukraine’s state emergency services during the Kakhovka Dam breach.
Mykola Taranenko, commander of the Kherson Regional Rapid Response Team with the Ukrainian Red Cross (and a Labrys customer) told TechCrunch via email: “As a commander, I always have to see where my team is when on a mission – especially in an environment high-risk countries such as Ukraine. With the help of Axiom, I can securely track my team’s location and status… manage donations… quickly turn digital payments into real impact… buy gear locally [and] donors can see where their money went.”
The environment in which Labrys operates is a rare one, with many overlapping political and military solutions. For example, Everbridge is an enterprise software solution that provides users—often military and NGOs—with an understanding of global flashpoints. But unlike Labrys, it doesn’t have the ability to connect with people “on the ground” as it were. Another, TAK, is known as the ‘Blue Force’ tracking system. In the meantime, Preliminary Datawhich has raised $146 million, has a software platform for humanitarian organizations and provides detailed information about assets on the ground.
This latest funding is one of the largest seed rounds for a defense tech startup in Europe to date and is emblematic of how defense is no longer off limits to investors, as we saw at TechCrunch Disrupt this year.
In addition, “dual-use” products that coordinate either civilian or military groups are a growing market. As of 2022, the global Command and Control Systems market was is appreciated at $22 billion and is expected to reach $28 billion in 2028.
Meanwhile, Improbable, EclecticIQ, Living Optics and Preligens are all European companies that have raised tens of millions, and often more, in funding in the last year or so.
The news mirrors trends from last year, when VC-backed firms poured $7 billion into U.S. aerospace and defense companies
