A British startup that builds uncrewed warships just raised $175 million and crossed a $1 billion valuation, with NATO's own investment arm on the cap table.
Kraken Technology Group closed its Series B on July 9, 2026, led by DTCP, pushing the Fareham, Hampshire company past a $1 billion valuation and making it one of Europe's newest defense unicorns. The round drew an unusual mix of money: the NATO Innovation Fund, the UK's National Security Strategic Investment Fund, the British Business Bank and Rheinmetall all wrote checks alongside private investors including Thesiger Capital Group, BOKA Capital, Supernova Invest and Hakluyt Capital. That's state capital and defense-industrial money sitting in the same cap table. All betting together on uncrewed naval warfare.
Founded in 2020 by Mal Crease, a former speedboat racer, Kraken builds carbon-fiber vessels meant to survive rough seas without a crew aboard. Its lineup includes the K3 Scout, an 8.4-meter attritable surface vessel already used in NATO exercises, the K4 Manta, which operates on and below the surface, and the larger K5 Kraken and K7 Sabre vessels built for longer-range missions. According to Sifted, the company demonstrated the K3 Scout during NATO's inaugural Task Force X exercise in the Baltic Sea, exactly the waters where undersea cable sabotage and naval incursions have put allied navies on edge.
The follow-up came fast. Business Insider reported on July 10 that the Royal Navy had airdropped a Kraken K3 Scout four times from an Airbus A400 transport aircraft during a six-day North Sea trial, using a sled-and-parachute system from Capewell. The drop was from 1,300 feet. The boat is 27 feet long, can carry up to 600 kilograms, and is designed to operate for up to 30 days in the field. If you're wondering why that matters, don't overcomplicate it: small uncrewed boats are much more useful if they don't have to start every mission from a port or a nearby warship.
The shipyards matter as much as the boats
What makes Kraken's setup unusual isn't only the technology. It's who builds it. Production of the K3 Scout has started at Rheinmetall's Blohm+Voss shipyard in Hamburg, with initial capacity for roughly 200 vessels a year and room to scale toward 1,000. Kraken also builds through Anduril Industries in the United States, focused on the K5 Kraken and K7 Sabre, and through Davie Shipbuilding in Québec, starting with the K3 Scout. Three shipyards. Three NATO members. One company coordinating all of it.
That's the real story here, more than the valuation. A single defense-tech startup now has domestic manufacturing lines running through Germany, the US and Canada at once, which means it can build the same vessel inside whichever ally's borders the order requires. For NATO planners worried about supply chains and sovereign production, that's the arrangement they've been asking industry for. Kraken says the new funding goes toward expanding that manufacturing footprint further and increasing payload capacity on its vessels, according to Tech.eu.
The money behind the robot navy
Kraken isn't raising in isolation. Just a week earlier, on July 2, German drone maker Quantum Systems closed a $1.2 billion Series D at an $8 billion valuation, co-led by Blackstone, Airbus and Advent, according to CNBC. Quantum Systems logged more than 19,000 missions in Ukraine in 2025 and generated roughly €300 million in revenue that year. Defense-tech startups have now raised $17.4 billion so far in 2026, well ahead of the $11.2 billion the sector pulled in for all of 2025.
Frankly, the pattern is hard to miss. Venture capital, sovereign money and defense primes are converging on the same bet: the next naval conflict gets fought partly by machines, and whoever manufactures the fleet first wins the contract. Kraken already has business to show for it. The Times reported that the company has delivered more than 200 boats to date, holds contracts with the UK Ministry of Defence and NATO, and has had mine-hunting vessels selected for Royal Navy deployment in the Strait of Hormuz.
None of this happens in a vacuum. Baltic and Black Sea tensions have escalated over the past two years, with repeated incidents involving damaged undersea cables and pipelines that Western officials have linked to Russian shadow-fleet activity. Uncrewed vessels like Kraken's are cheaper to lose than a frigate and don't put a sailor's life on the line, which is precisely why NATO's innovation arm wanted a stake rather than just a procurement contract.
The Anduril tie-in is the part to watch next. If Kraken's US production line scales the way its Hamburg line has, it signals genuine cross-Atlantic consolidation in defense manufacturing, not just a licensing deal. Rheinmetall, Anduril and Davie are building the same hulls under one brand. That's a template other defense-tech firms will want to copy. Whether it holds together under three governments' export rules is the question worth watching over the next year.
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