Drone manufacturer Quantum Systems aims to become a defence prime through acquisitions and new markets

The portfolio of drone manufacturer Quantum Systems is set to extend well beyond reconnaissance drones in future: the German company aims to grow into one of Europe’s leading defence companies. Florian Seibel, co-founder and co-CEO, is relying on acquisitions and new markets to get there.

On the sidelines of a product demonstration at a Bundeswehr (German Armed Forces) training area, he spoke about orders from Ukraine for counter-drone defence, the P19 aircraft, which can be operated both manned and unmanned, and possible acquisitions.

On the way to becoming a defence prime

Florian Seibel states his goal plainly: “We are working to become one of the defence primes in Europe.” This means rising into the ranks of the major defence suppliers that, as prime contractors, are responsible for large-scale programmes.

To that end, the company, which currently employs 2,000 people, is to broaden its technology base and take on more parts of the value chain itself. Quantum Systems develops and produces unmanned systems for air, land and water, complemented by software that networks and controls the various platforms. Seibel is also considering space and strike as fields for further expansion.

He does not intend to fully displace established manufacturers and their products. “We need them too. We still need tanks and we still need fighter jets, but we also need, to a large extent, unmanned systems.” Quantum Systems wants to win a larger share of this market for itself – and is calling for government procurement spending to shift accordingly.

Drone manufacturer bets on acquisitions

Acquisitions play a central role in the expansion into a more broadly based defence supplier. At the start of the year, the company already took over the German motor manufacturer Hacker Motor. The range of targets extends from propeller manufacturers to software companies.

For Seibel, it is naturally a matter of weighing acquisition against in-house development: “With how much money can I skip how much development work by buying in?” Acquisitions are therefore primarily meant to save time and make capabilities available that Quantum Systems would otherwise have to build up itself.

However, high price expectations are making possible deals more difficult. “The market is very hot at the moment,” says Seibel, who describes the expectations of potential takeover candidates regarding their own company value as “limitless”. Nevertheless, he holds out the prospect of further acquisitions in the coming months.

Critical components are also part of the expansion. For batteries, Seibel points to reliable manufacturing in Europe, whereas the company remains dependent on others for chips, raw materials and basic chemicals. Above all, he sees the supply of semiconductors as a task that Quantum Systems cannot master with its own resources: “The chip issue is something that personally worries me. It should worry other people in the government too. I won’t be able to solve it on my own.”

New markets: Japan, Taiwan and the Gulf region

Quantum Systems already has subsidiaries in the USA, Australia, Spain, the United Kingdom and the Baltic states, in addition to its activities in Ukraine. Seibel sees Japan as the next step in the expansion: there, the company has founded a subsidiary and is setting up an office. The background is that, at the beginning of this year, Japan’s procurement agency ATLA selected the company for a proof-of-concept programme for countering unmanned systems.

Taiwan is also among the markets Quantum Systems is working on. “We are active there through our American subsidiary,” says Seibel.

In the Middle East, he sees a particular need for additional air defence to protect critical infrastructure. “We are of course talking to all the relevant players in the Gulf, who will also have to defend their infrastructure against attacks from the air in future.” Seibel names neither specific customers nor contracts for these markets.

Counter-drone order from Ukraine

In Ukraine, the current priority for Quantum Systems is to supply reconnaissance and combat drones quickly. Only recently, the German-Ukrainian joint venture Quantum Frontline Industries (QFI) received a follow-on order that includes, among other things, several tens of thousands of drones of the Linza and Zoom types.

“We have also received an order for several tens of thousands of units of Counter-UxS systems with which Ukraine can master the Geran-5 drones,” Seibel reveals. He declined to go into detail on how they work.

A clue, however, is provided by a speed record attempt with a battery-electric drone that Quantum Systems undertook in October as part of the demonstration at the German training area. The Apex Recordhunter aircraft reached 777 km/h. It was not enough for an officially confirmed world record, however, because the successful flight in the opposite direction was missing.

What was learned from this “Formula 1 interceptor drone” is intended, among other things, to help increase the performance of the company’s own Skyron interceptor drone. It currently reaches up to 400 km/h; in future, 200 km/h more is to be possible. Against a jet-powered Geran-5 flying at around 550 km/h, it would then certainly be a serious opponent. Porsche, Liebherr and EOS contributed technology and components for the world record attempt.

Seibel does not, however, expect this to result in a lasting advantage: “Russia develops something, Ukraine counters it and then the cat-and-mouse game starts all over again.”

Pulse P19 as a carrier, manned and unmanned

Quantum Systems is breaking new ground with the Pulse P19 aircraft, which is currently in development. Visually, it resembles a propeller aircraft such as the Pilatus PC-7 – with the small but significant difference that it can optionally be operated unmanned. “Our approach is to fly manned first, and then unmanned as well,” Seibel explains. Because of aviation regulations, he says, it is easier to have the aircraft take off with a pilot at first and to introduce the unmanned mode step by step – especially when different airspaces are crossed.

It is conceivable, for example, that the P19 could carry up to 36 interceptor drones. As a flying carrier, it is intended to cover larger areas and fend off massed drone attacks – ideally immediately after they cross the border. According to Seibel, ground-based solutions run into practical limits: “I can’t put a battery of air defence systems every two kilometres.” The flying carrier is intended to reduce the number of interception assets required while allowing larger areas to be monitored quickly.

The system, which can be armed, weighs around 4.5 tonnes; its first flight is expected in mid-2027.

Financing through venture capital

Quantum Systems is financed through venture capital from well-known funds. Only this summer, a financing round of just over one billion euros was closed, in which Airbus, among others, took part with an investment. Seibel describes an IPO as an “option”.

Seibel sums up how the model differs from the classic, state-funded development contract: “The federal government doesn’t pay for what we do. It pays for our products.” The development risk thus initially lies with the company itself. In his view, this creates an incentive for speed and low costs. However, this can only work if development is followed by orders. “But then, of course, we depend on the federal government nevertheless coming to us at some point as an anchor customer.”