Hello Anne,

In case you missed it, last week saw an unusual announcement: Swarmer, a less than three-year-old Ukrainian drone software company, filed for an IPO on the Nasdaq. Swarmer is now based in Texas, but is backed by Ukrainian venture firm D3 and has a presence across Poland, Estonia and Ukraine. 

It bucks the typical trend of companies filing for an IPO; it’s neither incredibly well-funded, nor generating hefty revenues. 

According to its S-1 filing, Swarmer made only about $300k in revenue for 2025, and has consistently burned cash in the past two years (although the company says it has an estimated $33m of expected revenue in the pipeline, 60% of which it anticipates to recognise this year). 

Despite its tiny revenue, Swarmer is interesting for a couple of reasons: it was founded in war-torn Ukraine in 2023, and says that since 2024 its tech has been deployed in 100k active combat missions. It would be the first Ukrainian defence tech to go public. 

Also notable: Erik Prince, who founded the infamous US security firm Blackwater, which was involved in a 2007 massacre during the Iraq war, is Swarmer’s non-executive chairman — and wrote in the filing that Swarmer is nearing a “significant” new product launch. 

The company, which has raised about $18m to date in private funding, according to PitchBook, has multiple better-capitalised competitors. US- and Germany-based Auterion, for one, raised $130m in September alone for its drone swarming software. Swarmer’s S-1 also name checks German decacorn Helsing as a competitor.

I’m curious why Swarmer is choosing to go public now, and whether its IPO bid will actually take off. One defence industry insider told me they were “super surprised as well” and “didn’t see that coming”. D3 and Swarmer declined to comment. 

Matt Kennedy, a senior IPO strategist at US-based Renaissance Capital, tells me that because of the size, Swarmer will probably only be attractive to the likes of retail investors or wealth managers. “Companies in similar industries tend to go public in batches, partly due to sector tailwinds and partly because bankers and investors have an easier time pricing when there are multiple recent data points,” he says. “Swarmer is going public in the context of a pickup in defence IPOs, both in the US and abroad.”

Let me know your take. 

Elsewhere today:

• Opportunities are emerging for startups as AI hits the “memory wall” 
• Fractile cofounder left the company due to concerns over ties to China

– Anne Sraders, senior reporter

From demo magic to real revenue

Great demos win early customers. Sustainable revenue takes a plan and usually a few hard lessons. Join Dawn Capital, Granola and Stripe on February 18 for this Sifted Talks where AI experts and founders share how they move beyond early excitement to build pricing, sales motions and business models that actually scale.

🪖 British defence prime BAE Systems is expanding its tech investing activities, launching a new incubator and looking into backing defence VC funds.

🍟 Sifted revealed that the cofounder of UK chips startup Fractile left the company due to concerns over his links to China, according to sources familiar with the situation.

🗣️ AI voice unicorn ElevenLabs raised $500m in Series D funding at an $11bn valuation, led by Sequoia Capital.

🤝 Deeptech fund Kembara announced a first close of €750m to invest in scaleups across Europe. 

👀 After a $665m exit to AMD in 2024, Silo AI’s founder Peter Sarlin unveiled a new quantum startup dubbed Qutwo.

🏛️ A data centre developer that pledged £18bn of investment after taking a central role in the UK’s AI strategy has seen its assets frozen following a legal battle between shareholders.

Hitting the ‘memory wall’

Most semiconductor experts have long been aware of the “memory wall”: the bottleneck that arises as chips outpace the capabilities of memory components, which store the data needed for computations in most modern electronic devices.

But with the advent of ever-more capable AI tools in the past few years, the memory wall has become a pressing issue. Memory is critical to building AI models, and providers like OpenAI need such extraordinary amounts of these components that they are effectively fuelling a global memory shortage. It’s causing price hikes that are spilling into consumer electronics like phones and laptops — and the crisis is expected to last well into 2027.

Suddenly, the memory wall has become a hot topic. Ramping up production can only solve part of the problem; in the age of AI, it’s become evident a more efficient approach to memory is necessary. 

Investors seem to have clocked the opportunity.

“When we talk to VCs there is a realisation that memory is extremely important. It’s no longer perceived as this common, boring piece of hardware anyone can have,” says Adnan Mehonic, the cofounder of UK-based startup Intrinsic Semiconductors, which launched in 2017 to build memory technology that can store and fetch data more efficiently. “AI is a big driver of that [...] It’s a big opportunity.”

I look into the trend here.

– Daphné Leprince-Ringuet, senior reporter

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🤑 The VCs in the running to manage the EU’s €5bn deeptech-focused Scaleup Europe Fund. 

🍟 The next sector that could be ripe for M&A? Chips, says JPMorgan’s co-head of EMEA tech investment banking.

📉 Tech stocks have suffered a smackdown after a dizzying week of AI developments, writes Sifted founder John Thornhill — but what does it mean for European startups? 

🌊 Legal AI startups are defending their edge after Anthropic released new tools to automate legal work, sparking a sell-off at publicly-listed software companies.

🤔 Last week, German startup RobCo — one of Europe’s buzziest robotics companies — raised $100m at a reported $500m valuation. Sifted asked industry insiders why it’s not valued more highly. 

💰 Salaries are up ‘astronomically’ as defence tech startups battle defence primes and each other for a limited talent pool.

🤑 Faculty cofounder talks Accenture takeover: 'We could have been a multi-billion dollar company.'

👀 German philosophy, FDEs and no job titles: How Palantir’s culture is spreading through European tech. 

Orasio, a French startup developing AI software to analyse video feeds for security and defence applications, has appointed four senior advisers: former Interpol secretary general Jürgen Stock; Jens Henrik Højbjerg, the former national commissioner of the Danish police; Jacek Siewiera, who previously led the Polish national security bureau; and ex-MEP Arnaud Danjean.

Fleur Hoey, who previously led recruitment efforts at Skyscanner and Wayve, has joined Helsing as talent acquisition partner for AI and software.

Quantum Systems got a new growth manager: Isabella Rorsted, former brand manager at music company BMG, has joined the German dronemaker. 

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London-based Lawhive, an AI-based marketplace for legal services, raised $60m in Series B funding. Mitch Rales led the round and was joined by investors including TQ Ventures, GV, Balderton Capital and Jigsaw.

Luxembourg-based R3 Robotics raised €20m in funding co-led by HG Ventures and Suma Capital, with participation from Oetker Collection, the European Innovation Council Fund (EIC Fund) and existing shareholders BonVenture, FlixFounders and EIT Urban Mobility. The round also included €6m in European grants.