Torsten Reil
Appearances
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
When we started Helsing in March 2021, we actually put one of our slides that we thought there were going to be two galvanizing events. One of them was going to be an invasion of Ukraine by Russia, the other one an invasion of Taiwan by China. There is a big wave coming towards us. It is autonomy and software in defense, and it's unstoppable.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
I think the watershed moment was the annexation of Crimea in 2014 by Putin, and as importantly, the reaction or lack of reaction by European and Western governments in general. And we obviously acknowledged it and took note, but we didn't really understand the threat. And the danger, even back then, that that created was that you essentially allowed someone with territorial ambitions to do more.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And it felt like the clock was ticking until that was going to happen. And so when we started Helsing in March 2021, which now feels like a very different time, we actually put in one of our slides that we thought there were going to be two galvanizing events. One of them was going to be an invasion of Ukraine by Russia, the other one an invasion of Taiwan by China.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
So we got the Russia-Ukraine invasion right. What we got wrong was the timing, because we thought it was going to happen in 2025. But in the event, it happened 11 months after we put that slide together. Ever since then, we feel like it's, sadly, it is rational to be pessimistic at the moment. And it feels like this hasn't quite fully sunk in across our democratic societies.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
I struggle to believe we don't understand, Torsten. I think we probably intellectually understood it, but we didn't really want to think through the consequences. Because the consequences were that we needed to start thinking about defence again, about conflict, all the suffering that comes with it, and we didn't want to think about it. We thought it might go away.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And actually that happened for many years afterwards as well, and even to some extent now. And I understand it, I understand it emotionally as well, but I think it's intellectually lazy to not take the next step and think about what actually is required to protect our democracies. Before we go into what's required, what happens from here?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
The question is whether we're prepared again to think it through and commit to the next steps, which are an increase in defence spending, even if it is expensive, even if that means making sacrifices elsewhere, because the sacrifice that otherwise we'd have to make is potentially so large, it's the right thing to do. That I'm not sure is happening at the moment.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
I mean, Keir Starmer's actively said we will not have an increase in defence spending. Well, I think most governments are actually committing to an increase over time. So we are at, I think, roughly probably 2% right now on average in NATO. That's quite low historically. It's been, through the Cold War, it's been 3% to 6% or so.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
But if you look at Poland, Poland has gone from, I think, 2.1% or so to 4.6%, 4.7% within just a few years. So it's clearly possible. Whether every country is going to act at that speed remains to be seen. I think there are budget pressures everywhere. We understand them. And you have to convince a lot of people to actually rechannel so much money towards defence. It's not easy. I get that.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
But I think it's going to happen.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Yeah, I think we've already been on that trajectory, I think starting from 2016, where obviously similar arguments were being made. And with the Ukraine conflict, defence spending has gone up, you know, sometimes part of the general budget, sometimes as part of separate budgets, like in Germany, the 100 billion. So that's already happening.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
I think the need for European sovereignty has clearly become even more important. So I think we're just going to go further down on that vector. It might just be that we're going to have to go faster. the need for European sovereignty has become more important. Can you explain that to me?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Again, I mean, it's been clear for many years now that we cannot rely on partners to secure and protect Europe, at least not over a long period of time. I think right now that's still there, but I think over time there just won't be, I think, the capability even of partners, and as it looks, also not the willingness to do so.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And quite frankly, I think as a continent as Europe, which is still rich, we should have that kind of pride. We should want to protect ourselves. We should not need to rely on others. We should be equals in a partnership. And that's what our partners want as well. And so it's natural, I think, that we need to go there anyway.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
We've just been so used to a different kind of situation that we just need to unlearn it now and think about security ourselves. Will Trump pull out of Ukraine? I don't know. I don't think anyone knows. It's clear what he talked about. It's clear that he's made certain statements, but we'll see what's going to happen.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Yeah, I'm not sure whether it's a boom or not. I think we'll see some countries increase their defense budget a little bit. We'll see others, I mentioned Poland, increase it drastically. And particularly the countries that are most exposed to the eastern flank, to the NATO eastern flank, are more likely to increase their defense spending. It's already happening.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
It's happening in Scandinavia as well. Other parts of Europe may or may not increase it as much. That I think we'll have to see. I'm not sure I would call it a boom. I think it's an increase that will go into fixing a lot of things that are broken at the moment. And then some of that increase will go into new equipment spent as well, but only some of it.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And of that, there'll be a proportion that will need to go urgently to what's called new defense technology. But that will only be a part. Who do you determine who you sell to versus who you don't? You mean which countries? Yeah. I mean, it's a bigger topic. But the question is whether you should stop at export laws or whether you should give it more thought.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And what we did from the beginning at Helsing is we made a commitment to ourselves, but also to the outside world that we would take ethics really seriously. There are two reasons for it. One of them is as a company that's based in democratic countries, we believe we have a special responsibility to think about ethics and how our technology is used and who we make it available to.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Secondly, we want to attract, we want to be a broad church, we want to attract all kinds of different people with different political views, backgrounds, etc. And to accommodate those people, you need to give everyone in the company the commitment that we think together carefully about the pros and cons of certain decisions.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Decisions always have to be made eventually by the founders, but the decision process, you can include everyone. And that's what we've done from the beginning. So we have many ethics workshops, which are extremely well attended. We now have to break them up into several subgroups. What ethical elements come up that you did not expect to come up?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
First of all, even the complexity around who do you sell it to is interesting because they're very obvious ones that we'll all agree on. But then there are ones in between which are... Sorry, who do we agree on?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Yeah, for example, that we would agree on. And then there are others where it becomes a bit more complex. One of the main reasons we do these workshops is that we get everyone to contribute to the decision process, but also for everyone to build what we call this ethics muscle. Because for me, everything was kind of, there were red lines, everything was black and white and it was kind of easy.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
The more you dive into a particular topic, the harder actually it becomes to make these calls and the more complex it becomes. And that is something that we didn't just want to decide kind of in a small group of people or some small ethics group. We wanted everyone to contribute to it so that everyone had buy-in and understood the pros and cons.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Not everyone may agree with the decisions that we eventually take, but everyone can see how we arrived at those decisions. What decision did you take that was most unpopular? I don't think decisions have been particularly unpopular yet. We just recently announced that we are building strike drones. We built strike drone software as well.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And that is fraught with all kinds of complexities that you have to think about around the ethics side of it, both in terms of technology usage, how it's used, et cetera. And that is something that everyone contributed to the thinking around this. We managed to shine a light on
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
areas of technology development that i can't go into sadly that actually we probably didn't think about that much before so the other important part is that if you have a lot of i think intelligent engaged people look at the ethics problem around technology usage con ops and the concept of operations you just shine a light on kind of any kind of remaining area and so you just have much better coverage of all the questions that you have to do before we go to this very important news so you don't sell to those three who are the ambiguous like who's the like
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Well, the easiest way to look at clear and not clear is to check out the Economist Democracy Index. That's what we used initially. The Economist Democracy Index. Exactly. So the Economist releases a list every year and it ranks countries according to how democratic they are, with 10, I believe, being the highest one, going down to zero. And so the ones at the top are easy.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
The ones at the bottom are also easy. And then it starts becoming more complex in the middle because you have some countries, even in the EU, where in the past they haven't been
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
kind of ranked that highly but then governments have changed and they've ranked more highly again so it basically becomes a moving target and then there are also considerations around are they parts or are these some of these countries that are maybe in the grain gray zone part of democratic alliances that become important for democracies to survive and protect themselves for example
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
I think these complexities are there with any conflict and eventually it becomes complex and there is no right or wrong. I'm always aware that this sounds like a cop-out and this is what I've always been afraid of is that when you say it's complex, it sounds like a cop-out, but it isn't a cop-out. It is actually complicated and complex.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And you also need to weight certain components in a way that can be arbitrary. And so every conflict, I think, has these kinds of complications, and it's our responsibility to navigate it. Again, we could just lean back and say there's export law that makes it really easy.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
The thing that we have to avoid is the Tesla moment for the defense sector. If we collectively, including the primes, don't understand that and don't adapt, the same thing is going to happen to defense as happened to the car industry. Where are we in three years with Russia-Ukraine? What happens in China and Taiwan? Again, I think it's plausible that there will be...
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
But I think if you want to have people really engaged with these kinds of technologies and capabilities in a company, you need to go further than that. You need to build a view that goes beyond just what is quite static export law.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Well, yeah, I mean, Helsing was founded to support Europe and to be a European company, also to be a European lighthouse company and a company that helps Europe protect itself. So that's always the number one thing. And if kind of people ask, like, what is it you want to, you know, where do you want to be in five years with Helsing or what is it you want to achieve? It's very simple.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
We want to make Europe safer. We want to be able to point at the difference that we've made in terms of the geopolitical security of this continent. That is the goal of the company. Everything else has to follow from that.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Obviously, it needs to be a company that's large enough so that it has leverage, that it can deploy a lot of equipment, that it can work with some of the most complex systems like the Eurofighter that we're working on. But that's all it means to an end. The goal is always to protect Europe.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Yeah, I mean, Helsing is a software company, as a software-first company, always has been and always will be. Almost everyone is a software engineer. That's where we've come from. That's how we hired. And we are in a number of large contracts. For example, we are working with Saab on the Eurofighter electronic warfare upgrade program. That's pure software, our contribution.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And software can make a massive difference. In this particular case, AI can. because we can start to read the intent of shape-shifting anti-aircraft radar systems. And so software plays a huge role, and we always said it creates a 10x multiplier in terms of capabilities. That's still the case, that will always be the case, and we will always do those software programs.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
So software and software contracts work in defense, even though some people say it is impossible, it clearly is possible. However, there are some areas where software needs to have a hardware carrier. With a Eurofighter, we have a combat aircraft as a carrier, and that's great, and we're not building a Eurofighter.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
But with drones, you need to think about drones differently in order for them to have the effect that you want them to have, which is basically precise mass. So you want to be able to have a large number of drones, extremely precise, to provide a deterrent that doesn't exist at the moment. And so for that, you need to have large numbers of drones.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
You need to have the ability to manufacture those drones in a way that isn't the case right now. Most drone companies right now build small numbers of quite exquisite drones. They're quite expensive, sometimes a bit of a boutique business where people really care about the hardware and the carbon and everything else. But that's not what we need. What we need is really scaled up production.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And so when we looked at what's required in terms of capability, we couldn't, certainly on the Western market, we couldn't find anyone who was able to produce these large numbers. And so that's when we started to look at, can we build these kinds of drones ourselves? And can we think about it differently from a software first point of view?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
meaning that we can shift a lot of the complexity from hardware into software. We can simplify the hardware, and we can manufacture it in much larger numbers at lower prices. And that's what we did with the HX2, which we just announced a couple of days ago.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
It is and it isn't. So it is in that there are many areas where you need to have hardware experts. And we've built an amazing team that obviously deals with things like the design, the components, but also the supply chain. And that's different from software. But you can think about hardware as software as well. You can optimize a lot of parts of hardware by shifting complexity into software.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And you can also test hardware in software. And so we spend a lot of time building infrastructure for the entire company around simulation platforms, for example, AI infrastructure platforms, et cetera. And some of that technology is also applicable to hardware. So we've developed our drones extremely fast and we've tested them extremely fast.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And the reason we're getting to that kind of iteration speed, and it is all about iteration, just iterate, iterate, iterate, is because we can move a lot of the testing into software. And only when we get to a certain point, we move it into hardware, we test it in hardware, and then we go back into software again.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
So these two things, if you do it well, which we're trying to do, are extremely interlinked. And the best hardware companies, I think, are software companies and vice versa.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Software can, with the right simulation environment, go really far. But there will be some things that maybe you didn't expect that aren't covered in your simulation. That happens in particular when you're deployed. As our drones are in Ukraine, then the realities of conflict will throw things at you that you just didn't anticipate. And so that's something that you have to test.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
It is an inhibitor, like many other things as well. But for the complaints that we have about procurement and everything else, a lot of these rules are also there for a reason. Are they always applied in the right way and in as timely a way as ideally would be possible? Probably not. But the rules quite often make sense. What's the craziest rule?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
I think there are lots of rules and it's frustrating. But if you enter defense as a company, that is what you've signed up for. And so you'll rarely hear us complain about how slow procurement is, etc. Because people want to do the right thing. The procurement officials also want to do the right thing. And by the way, I think politicians do too.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
It's just that eventually you end up with a system that's grown over a long time where the incentives aren't quite aligned with the realities of society. Well, this is my point.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
I think the system probably incentivizes the latter, but that doesn't mean that there aren't individuals actually across different forces in procurement agencies, but also in politics who really want to innovate. It does exist.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
So there are all kinds of, I think, little things that you could do. But what we are suggesting is that you introduce a mandatory 20% on new defence companies for defence equipment. That is the easiest way of doing it.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
So if you reserve of your defence equipment spend, so not the stuff on maintenance and everything else, but actually defence equipment, if you reserve 20% of that to new defence companies, which you can define, that is a shortcut to actually realigning incentives. What is the current spending on new defence companies?
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There are many. The first thing is that you also have to have relationships with governments, with the right decision makers. You have to have a government relations team that deals with all of that. And in Helsing's case, it's not just one country, it's several. And so we're active in the UK, in France and in Germany, just recently opened an office in Estonia, and there'll be more over time.
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So we have to have those relationships with various governments. You have to then think about how do you deal with lobbying from industry? So not every prime in the defence industry is yet our friend. I think we want to reach out to all of them, but not everyone sees us as friends yet. Who's your friend and who's not your friend? Well, probably Saab is a friend, for example.
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We work very closely with them. They're shareholders in Helsing as well, really close friends. Others, I think it can fluctuate. I don't mean this in jest. I think we all genuinely need to work together. I think we all have bigger fish to fry. And defense primes will always have a role. We don't think that they will disappear. In fact, actually, I think they will grow if we do things right.
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The thing that we have to avoid is the Tesla moment for the defense sector. If there is a big wave coming of new technology, and it's all around autonomy, software, and AI, essentially, again, precise mass. If we collectively, including the primes, don't understand that and don't adapt, the same thing is going to happen to defense as happened to the car industry.
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The new wave was electric software and autonomy.
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Why is that such a challenge? We're going to be faced with a large number of autonomous systems from our adversaries. That's going to be the focus that they're going to take. And by the way, it's quite likely that they won't have the same ethical red lines that we as democratic societies should have.
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So they have, from a functionality point of view, I think they'll have the ability to take shortcuts that we don't want to take. We have to earn the luxury basically to be able to really care about ethics. And that means that we have to have technology leadership overall.
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Yeah, I think so. I mean, they're quite clear for everyone to see. Iran is producing a large number of drones already. They've been using and working on the Shahid, for example, for a long time. They've licensed that design to Russia. Russia is now manufacturing it itself. Software is getting better over time.
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Russia has the Lancet, which is a capable strike drone, quite different from the Shahid, which I think they've developed themselves. And the software for all of these is getting better as well.
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We're going to be faced either through Russia alone or through partners like Iran with adversaries that are committing to precise mass, large number of autonomous systems that we're going to have to counter one way or the other. And you can counter them, But you can't counter them with the current systems that we have.
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You can't just have exquisite systems like tanks or artillery guns that are not particularly well connected, that take a while to take a shot. You need to work basically at the speed of software. You need to interconnect all of these systems. But crucially, you need to have precise mass on your own side as well.
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You need to have the ability, however horrible that sounds, to have thousands and tens of thousands of strike drones to deter. Do governments understand this? I think some governments are starting to understand it. I think governments at large probably haven't understood it. There is a big wave coming towards us, and it is autonomy and software and defence. And it's unstoppable.
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And we're just going to be forced into that race.
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We can already look at Ukraine and look at the trends there. And the trend, even at the beginning, there were some drones that were being used. Remember the TB2s, for example, from Turkey. Over time, that's evolved towards more and more drones. Initially, it was to make up for lack of artillery munitions.
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Now, actually, the drones themselves have such good success that more and more are being built. And I believe Ukraine is building one and a half million FPV drones, the small first-person view drones a year. I think Russia is building roughly the same. So there's already a shift towards mass and reasonably precise mass.
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What hasn't happened yet is that those drones are scalable, but that will happen in terms of their usage. At the moment, you have one operator operating one drone. It's going to happen quite quickly that that's going to change, and you'll be able as a single operator to control multiple drones. And that trend, I think, we'll see playing out as early as next year.
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It's not long now because the algorithms are all coming. We know this because we have those algorithms too. You said there about kind of drones having success. How do you measure success? I think it's the ability to hit the target. It's hitting a target that itself uses electronic warfare, so it tries to jam the signal of the drone.
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These are some of the bigger problems right now that Ukraine is facing and that NATO will be facing in a peer conflict as well or any other country in a peer conflict. So drones themselves, if they're just remote controlled drones, eventually have the problem that they can be jammed. That's GPS jamming, so it doesn't know where it is.
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Or it's comms jamming, which means that the control inputs to the drone or the video feed back from the drone to the operator is jammed and therefore you can't use it. So this is the problem. I mean, there's a jamming station at the frontline every few kilometers right now. So it's almost impossible to get around jamming at the moment.
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Yeah. How do you think about that? It's the same thing with strike drones and tanks and artillery. A tank costs several million pounds, euros. A strike drone is much, much, much cheaper. Depending on how things play out, you need one or maybe two or three strike drones, even with countermeasures to actually overcome a tank. That's basically the danger. Same is true for artillery systems.
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They become very hard to defend. And the problem with mass, especially precise mass, is that you can solve almost every problem with saturation. So even if there were countermeasures, let's say on the tank side. So what do you mean you can solve every problem with saturation? It means that basically instead of sending one, you send five. If they're cheap enough, you can just do that.
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And at some point, you just oversaturate defenses of an expensive system. And it's still very cheap to do it that way. If you just think about the economics of it, you still have a really strong asymmetry. And so it'll become harder and harder unless you find a way to really counteract these systems, which is hard to send expensive tanks and artillery systems into battle.
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When on the other side, there are strike drones that are much, much cheaper. Is the future of war contactless in terms of human contact? Ultimately, yes. I think ultimately, again, you can already see the first signs in Ukraine. Some areas of the battlefield are essentially no-go zones for humans because you have drones buzzing over you all the time.
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I think that gives us a kind of a first indication how conflict is going to evolve. It'll be impossible and I think ethically extremely problematic to send humans into a battlefield that is facing large numbers of autonomous intelligence systems on the other side. What is the point of a battlefield?
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Yeah, I mean, it's usually not done in a way that there's some kind of sequestered field and, you know, you work it out and then whoever wins the conflict. Obviously, it tends to be related to, obviously, physical proximity to areas that matter, you know, whether it's ports, certain routes, obviously, or other important landmarks. That's where battlefields tend to be located.
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Yeah, I think it should be disconcerting to all of us. I think we should think about it and think about the implications. And we should think, and I don't think this is happening enough, I think we should think about how we want this technology to work so that we can still stay safe, but we don't have to compromise on our ethical standards.
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Are we seeing a change in public perception around defence spending? I think so. So if I look at polls now, I think for most countries, population agrees that more needs to be spent on defense. I think when it then comes to looking at what is going to be cut, I think people probably will differ. And being very concrete will make, I think, that kind of view a little bit harder.
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I think overall, populations get it. Whether politicians currently have the courage to actually implement it is a different matter. I think in some countries, probably that's going to happen. We talked about Poland earlier. In others, it's taking longer.
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Again, 20% to new defence. It sounds self-serving, but it's absolutely required. If we just keep buying the same kind of equipment that we've bought before, if we don't network it, if we don't give it AI, if we don't produce precision mass, we won't be able to deter and we won't be able to defend ourselves in a conflict.
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They probably do take too long. I think they're incentivized in different ways. The US is different to other countries. Every country is different and the various primes are different as well. In general, they're not incentivized to spend a lot of their own money on R&D. It's probably less than 5% or so. For a company like Helsing, it's almost all of it. I mean, we pre-finance almost everything.
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That's why we raised quite a bit of money because we need to be able to spend on developments before we actually, because first of all, we have to prove that it works and we can't wait for governments to eventually get it and then fund it. And then in eight years, we have a system. We need a system in eight months, basically, or let's make it a year or two years.
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So one, we have 20% in new defence. What else? I think, again, procurement needs to be reformed. Everyone knows that. The reason we don't talk about it that much is because it will take a long time to do it.
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It was a long journey. Natural Motion started as a spin-out out of university, out of Oxford, and we were trying to create physically simulated creatures controlled by neural networks, which was a crazy idea at the time. This was the time, I think, of the Pentium processor or something.
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It needs to be obviously faster, probably less constrained, and the incentives need to be aligned more again towards speed, which are not right now, which makes it harder for the individuals there to do what's right for that particular society.
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First of all, I think you simplify the processes, but you also make sure that you actually set deadlines that are quite tight in terms of when do you actually produce something. And then you try to work with companies that want to work very hard and fast, and you incentivize other companies that maybe have a different way of working to do the same.
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Primes and hardware need to work together with software to be really effective for future conflicts.
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I think it will be similar. There will be primes and then there'll be suppliers.
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A very small number, extremely small number.
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So I think what happened is that the VCs that really get defense, and there are a number, have already kind of made their bets on defense companies. There is now kind of a second or third wave of VCs that go into defense and fund technology teams, which is fine in a way. But my question to those VCs would be like, what is the exit route for those companies? Who's going to buy them? You or Andrew?
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Yeah, but we can't buy all of those companies. And also the question is whether we would buy them at VC valuations. I mean, the exit opportunities for companies are either an IPO. For that, you need to be a prime. You need to be multi-domain.
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You have to have all of the foundation of having built software infrastructure, everything around security, physical security, cybersecurity, government relations, export law, compliance, and everything else. That all has to happen. And then you have a shot. I thought building a customer success team. It is. Defense is so complex.
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Like having built a games company, which I thought was pretty hard, defense is just on a different level. Impossible, I think, if you don't have a founder team that already has experience in some of the areas.
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I think for some of the more fragmented tail, maybe not to zero, but I think they're going to go down. Where is the biggest opportunity to deploy dollars in defense today? I mean, I'm biased, but I think it is around those companies that have got to scale, that have programs of record, and that are basically active in a conflict.
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It's hard to do computationally, but it worked quite well, and we ended up using it and licensing it for visual effects in big Hollywood movies like Lord of the Rings, Harry Potter, Spider-Man, then for big video games like GTA IV, GTA V. That worked quite well, but it only worked, I would say, okay in terms of revenues.
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The difference between a company that, first of all, maybe R&D contracts and has a program of record, that is already a big difference because getting over that hump of getting a program of record is huge.
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It's an official program by a government that has a certain size, rather than, I mentioned the Eurofighter electronic warfare upgrade, that was officially awarded, companies pitched for it, and eventually consortia pitched for it, and eventually consortia won it, which is SAP and us in the end. Those happen regularly, and they tend to be quite large. They run over several years.
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By contrast, there are innovation projects, which is quite often almost a parallel track to all of this, where there are smaller pots of money to prove that certain forces or nations can do innovation and defense. The problem is you may kind of get 500K from one of these projects, and you win it and you show to your VC, we've made revenues.
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The jump from there to actually a program of record is huge because all of the apparatus that's required to pitch for these programs, to have, again, the government relationships, some of the lobbying that's required, compliance, again, export law, I mentioned it earlier, that isn't required for these innovation projects.
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So these kind of teams have a feeling of, I've now taken the first step, now the next step is a program of record, not realizing it's a completely different kettle of fish. And again, I had to learn all of this because for me, it was natural
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They need to build the teams around it. And this is where one of the problems lie. There's a scarcity of talent around go-to-market government relations, even compliance and other things, even security, to be honest, in defense. So all of these companies would be competing for a very small pool of people. It's just impossible to turn them all into primes. It's just not going to happen.
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Coming back to the innovation side, you end up with something that looks like product-market fit, and you think it's great technology, you've shown it, and you can do something, maybe take a drone down or something. But I had to learn that that is just a very small part of building a prime. It's like one-eighth maybe or something. It's product-market fit. Then you have to do all the rest.
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And for that, you need to build the infrastructure to build a prime, which Android has done, for example. It's a good example. We've done it too. We're certainly in the process of doing it. And there's still a ways to go. But I think that's what's underappreciated.
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And it's not underappreciated with VCs that know about defense, but with, I think, VCs that are maybe as distant as I was when I was previously in the gaming industry. I think for them, they quite often don't get what it takes to actually build a large company.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
100%. Most founders will say, had I known how hard this is, I would never have tried. Had you known how hard this is, would you have tried? Elting, yes. With Natural Motion, I went through some really tough times.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
There's several reasons. But the main reason now is that three founders, it's easier to build a company, even when you go through really difficult times, because you have each other to rely on. You have each other as a sounding board. It sounds a bit kumbaya, but it's very important.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Well, we've been through hard moments throughout the company, but really difficult times were over the last few weeks when we had to will into existence a hardware platform, having come into it, not knowing much about it, having to do it in record time, having to think about supply chains and everything else around it. I mean, that's difficult.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
As a founder, you want to get to a hockey stick movement eventually, and that wasn't the case with the technology business. It was growing, but it was growing reasonably slowly. I think one of the things that we did do well was that we recognized that growth wasn't as strong as we wanted to, and we took a big risk and pivoted the company to doing games ourselves.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And you do it while there's lots of noise in the market and all kinds of other things, and you still have to build a company. And it's time consuming. There are lots of setbacks. And it is much easier to do it if you have several shoulders rather than just one to get through all of this stuff. And there'll be more setbacks happening.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Like with every startup, you just don't know what's going to happen. And you know what it's like with a startup. That's what I experienced at Natural Motion. You're already on the floor, you've already been punched in the face several times, and then another one comes, and then another one comes, which you didn't expect.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Those are the worst, is when you're kind of already, fuck, I'm done, and it's relentless. The only thing I would say is that with Natural Motion, we got out of it eventually. Even out of, we had some situations that were very hard to get out of, we still managed to do it.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
One was when we did our integration into GTA 4 with our technology Euphoria, which was an animation runtime engine. We had already optimized the hell out of it. And we had great optimization people for gaming consoles. But GTA 4 was an amazing game and really pushed the consoles to its limits.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And I felt the technology was great, but there was a point where we got a call from Rockstar saying we don't have the performance budget for your engine anymore. So you either run another 10 times faster or we can't use it. And I remember putting the phone down and thinking, we are fucked. And I was sure we were fucked because we'd already optimized everything.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
This was one of those moments where a number of our engineers eventually went to Edinburgh to work directly with a team there until they somehow managed to get that performance gain. And the engine stayed in there and it was the beginning of Natural Motion proper because it was such an important game and it made everyone proud.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
It's also taught me about how exceptional engineers can make crazy things happen. And I was convinced this wasn't going to work out and they made it happen. To this day, I have so much respect for great software engineers. The best software engineers, they make all of us look good. I spoke to Shaq before the show.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Yeah, so I think people complain about all kinds of things about Europe and general startup environments. I don't think that there is a lack of capital in Europe. Certainly not seed series A, sometimes even series B. You could even argue there's too much.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
What's missing is, to some extent, operational knowledge, because we haven't had as many startups that became big as the US, specifically Silicon Valley has had. But I think more important is ambition. It's ambition specifically on the side of a founder, ambition combined with aggressiveness. And that aggression, that lack of aggression, that lack of ambition holds almost everyone back.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And it's still acceptable to build companies and sell them at a value of 100 million. And I understand why, because it's life-changing for everyone. But it's actually not what Europe needs. We need much bigger companies that actually create sovereignty around some of the key areas in ways that just currently don't exist.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
So you know how people say, focus, focus, focus. We did focus, but only up to a point. At one point, we said, this isn't working the way we want it to, so let's pivot to actually making games ourselves. And we were very naive about how easy it was going to be. We watched Rockstar work, and we were big fans of Rockstar games.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And for that, you need to have founders that have that ambition, first-time founders, or you need founders that are second-time or third-time founders who've already learned a lot. And go back and do it one more time, because quite often you're actually much faster the second time around for reasonably obvious reasons.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
That doesn't happen as often in Europe as it does in the States, from what I can tell. And I always wonder why that is. And sometimes maybe it's because Europe is a really nice place to retire in. Lots of things that you can do with a house in Italy or whatever and not work. But that is not good. We need all of those people back to start a second or third company. How do we change that?
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
The founder community needs to talk about it more. It's a mindset thing. I personally think we all have a contribution to make and a contribution to make as a society, as founders, I think we have a responsibility to actually contribute. Some of that contribution is to help Europe become sovereign, and particularly around key technologies.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
So I think we are falling behind, but that trend isn't new. That already started a few years ago. And part of the reason we wanted to build Helsing was to show that you can build a company in Europe fast to scale in deep tech and just provide a shortcut. Actually, this is doable. And we wanted to show that it's doable, including the fundraising.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
So I think Europe is falling behind, but it doesn't have to be that way. So the things that we have in Europe, and particular talent, we have incredibly good talent, including on the engineering side. We hire almost exclusively from Europe at the moment and the talent is amazing. The talent pool is amazing. People's attitudes are amazing. There's none of this nine to five mentality.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
People really want to make a difference and they work hard and they work intensely wherever that's required. So I think that's a myth.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
It plays an important role, I think, later on. The ability for European investors to provide growth capital, that's lower than it is in the US. But I don't think that's a problem. In fact, in many ways, I think that's probably a feature, not a bug, because I think exposure to US culture, but also investors, is extremely useful. I was lucky to have it.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Natural Motion Benchmark is one of our investors, with Mitch Lasky as our partner. Part of the reason why we eventually took off was also Mitch and the way he thought about how big this company could be, how I should think about portfolio, not think too small. That was extremely helpful. And so I think that injection of US mentality to European companies at the right point is extremely helpful.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And the cap table, true for Helsing as well, it's still Europe dominated. We did our seed round entirely from European investors. Then Daniel and Prima Materia came in. Again, European. So later on, we took American money, but the company is still a European company.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And we thought, well, we should give it a go as well and ended up making games for iPhone, which worked out very well. We got a lot of support from Apple, ended up creating CSR Racing, which was one of the largest iPhone games at the time.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
I think it's pretty clear that the current narrative is a caricature of Europe. There are some elements of truth in it, but they've been extremely exaggerated, particularly over the last six to 12 months, I think, if you go on X. But when you look at where Europe is today, and I try and be positive.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
is a trend right now. Even three and a half years ago when we started the company, that trend was already there. The question with all of these situations is, what can we do to change it? What are you doing to change it? We felt we had agency by looking at, for example, the problem of European sovereignty and specifically around defense.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And we felt, as founders, you have the privilege of having a massive lever, which is, if you can build a successful company in this space, you can actually make a difference. I'm pretty sick of people just commenting. I mean, you know, there's a whole LinkedIn economy built around just complaining, same is true on X, and just commenting. And those comments, they're worth nothing.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
None of the commentary is worth anything. The only thing that matters is if people actually, you know, do something. That is, start a company, build a company, go into politics, start a new party, whatever it is. But the current attitude of just complaining drives me crazy. All right, okay. Point taken.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Yeah, it's interesting. I also think that people over-index on the environment and about having the right regulatory settings and tax and everything else around it. I actually think none of the stuff really matters that much. I think what really matters is founder quality and founder ambition. For a country to be successful, they should attract the most aggressive founders.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
and at that point the company did take off and this kind of approach to risk taking and going all in stayed with me and i think stayed with with helsing now we we are big believers of focus i'm just doing very few things and when things don't work we try to adapt very quickly if that's what works that you've taken with you to housing there are things that naturally don't work and you want to discard what didn't work that you're like no leaving that behind
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
And everything else is a lot less important.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Certainly companies in energy. Energy sovereignty is a huge issue. Some of that may be in conventional technologies. Some of it may be in future technologies like fusion. We need sovereignty ideally around semiconductors. It's going to be very hard to achieve unless there are big changes in technology and various other areas. Obviously, defense is another one and a few others.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
I'm not sure whether we'll be able to create those companies kind of in the next two or three years to a point where they provide sufficient sovereignty, but I'm very sure we can do it over the next five to ten years.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
It is very hard to predict. We just don't know how things are going to pan out over the next few months and a couple of years. But I think we do have to take the threat to the NATO Eastern flag seriously. I think we have to take it much more seriously than we are doing it right now in the UK and in Germany and other countries.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
I think Scandinavian countries take it a lot more seriously as do the Baltics. They take it extremely seriously and I think we should listen to them. I think the threat is extremely plausible in the next few years.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
What happens in China and Taiwan? Again, I think it's plausible that there will be a conflict. I don't think it's 10 years away if it happens. It's probably quite a lot sooner than that. But it depends on how the next, again, few months and years are going to pan out. Again, I think there is a danger, and it's obviously a clearly stated goal of China to reunite, as they put it.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
As people have stated, there was no new conflict under Trump's last administration. And so if you go by that, then it would reduce it. But there are other players obviously involved as well. We don't know what kind of capabilities are being developed in North Korea, how someone feels on a particular day.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
The danger that we have, and I think something that is hard to control, is accidental escalation. For example, at the beginning of the Ukraine war, I think there was a danger of escalation, potentially even nuclear escalation. I think that eventually settled. The situation became more readable for everyone involved. Why was there the potential for nuclear escalation?
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Because we were in a new conflict that was moving extremely fast. We were in uncharted territory in terms of Western support for Ukraine, in terms of what weapons should or should not be used, what would be the reaction on the other side. It was hard to predict, and everyone was kind of feeling their way into the situation.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
I think those are situations that are fast moving and also where there's limited information where things can escalate quickly accidentally, even though neither party wants it. That is very hard to predict. These are very nonlinear events when they happen. And so that's why it's hard to predict whether a conflict is going to happen under a particular administration or not.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
We are not sufficiently alerted to the danger of conflict. We've lived in conflict for forever, basically, and then had a period of time where there wasn't one. And I'm worried that we don't take it seriously because we don't want to think about it. And by the way, I don't want to think about it either. It's not nice to think about conflict, but we're not taking it seriously.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
I think money can give you security. To me, that's by far the most important thing. So not having to worry about money makes a big difference in terms of how I think you lead your life in general, but also what risks you take with, let's say, your next company. In order to build a successful company, you have to take risks. Being safe on the money side makes it easier.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
I think one of the things that I didn't quite appreciate was how important hiring is. And I know everyone says that team is the most important thing and hiring should be your priority, but to really do it, to really do everything you can to get the very best people requires a different mindset and actually requires a lot of time in your calendar as well.
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It's not the only thing that you require, but it does contribute to it.
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Yeah, I was just gonna, self-made espresso. We just bought a new espresso machine. A long walk every day makes me happy. Can't put a price on that.
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Sounds great.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
Most people believe that the environment in terms of taxation, regulation, et cetera, has a big impact on whether you can build successful startups in the country. I don't think it does. It's minor compared to attracting the right founders.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
So I think the discussions that people have around how can we make a particular country a better place for entrepreneurs who are already there, I just don't think it makes a difference. What's the single hardest element of being CEO of Helsing?
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
It's the fact that the company needs to shed its skin every 12 to 18 months because it's progressing at such a pace that you just have to think about the org structure again repeatedly. You have to think about whether your processes are the right ones, whether you're talking to the right people. What did you not see in org structure change that you wish you had seen?
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
The biggest unlock for us was to have these quarterly found offsites where we basically reflect and think about what's working and what isn't working and how do we change it. Never did that previously and stuff just gets warmer and warmer until it's too hot.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
I actually, I'm not sure I agree with even with a statement. I think it's perfectly, there's this trope that, you know, any decision is better than no decision. And I've never believed that. I think that sometimes you have to make a lot of decisions as a founder all the time. Well, I think no decision is a decision. So this is the thing.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
If you make a conscious decision not to decide on something because you don't have the information right now that you're required to make it, I think it's totally fine. And I think people should make much more use of that rather than randomly going, I'm going to go for this one. It's just one of the many things that LinkedIn screwed up. There's so many pieces of wisdom on LinkedIn that are wrong.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
It's just like all this work smart, not hard stuff, being a servant leader. Why is work smart, not hard bullshit? Because you need to do both, clearly. You're always out-competed by someone who works smart and hard if you're a work smart, not hard person.
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20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing
You need to lead a company and you should not be afraid to say that. If you're the founder of a company, we made the decision for Helsing as well that we are a founder-led company. And we are all here to basically serve the company, to make the company successful. That's what we do. And the founders provide the vision and the direction. And if you like it, great.
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If you don't like it, you don't have to work there. What have you changed your mind on in the last 12 months? I used to think that you needed to make sure that there was always a degree of process when teams work together on something, including something new. I have now learned that it's possible with exceptional people.
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Just let them get on with the job without any stand-ups, any predictions on deadlines. Nothing. You just let them get on with the job in a fast-changing environment that we had to deal with, for example, over the last few months. It is probably the most efficient way of actually making progress rather than being structured about it.
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With Natural Motion, we had a lot of great people, but we also eventually got, I think, into a rhythm of maybe hiring people that were just there to add headcount, to get certain things done. to accelerate a project, and the reality was that almost never happened. In fact, what happened was that if you added more people, complexity went up, the company slowed down, it became much harder to manage.
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And then eventually you have to move to structure, obviously, but I probably wouldn't have thought that two years ago. See of any other company for a day, which company would you choose? Probably ByteDance, and I would shut down TikTok immediately. It's crack cocaine for basically our societies.
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But if it is very compelling, which yours is, it becomes something that people will consume too much. Same with food. Same with food. I think food can be dangerous too, but I think TikTok is a lot more dangerous than hamburgers. Large parts of society are wasting so much of their time on something that has been highly tuned.
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I'm saying this as someone who used to make games, and we know what dopamine loops look like. TikTok loop is the best, and you cannot get out of it. Why is it the best? Because it has just the right combination of timing, the flick, the content that immediately comes up. It's perfectly tuned. And obviously they have all the metrics to know what content to show you. It is super addictive.
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It's incredibly dangerous. It also obviously becomes a potential tool for manipulation, political manipulation, whether that's happening or not. But it is extremely powerful if you wanted to use it. And then thirdly, it has the same problem as all social media. The content that works the best is the content that's the most extreme.
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And so we have a problem of basically radicalizing political views where just almost by definition, radical content will just work better. Do you believe Twitter is better under Elon Musk? It's very different. How would you say it's different? There are different people on there now. I think other people have left. Maybe you get a broader spectrum of views. It's hard to tell.
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I think the jury is out on that. But it does feel different.
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If you care about the platform that much, then maybe it's the right thing to do if you have the cash available.
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I think we wish we had known that the Ukraine war was going to happen that quickly.
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We would have focused all of our efforts on specific systems to deal with the problems in hand, which are now the ones that I talked about earlier. It's electronic warfare resistance, GPS independence, being resilient to comms jamming. And we were working on those systems, but not just. We were working on other systems, too.
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And we were building a technology foundation that we're now using, obviously, in the company. And it's good that we have it. But had we known that this conflict was imminent, I think we would have shifted priorities. And I think we could have done more right at the beginning. In the end, I think we were able to contribute, but we needed to spool up all of these systems and a lot of knowledge.
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Well, one question I've asked myself the other day, which I don't get asked that often, is how does a founder group work together that's equal? How do you make it work? Because as a founder, almost By definition, you all have to be ambitious. Everyone is different. Everyone will always have a bit of an ego as well. How do you make it work that actually it works together?
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And it worked well for us naturally, but it's quite interesting to think about what are the reasons that it works. What are they? The way I boil it down is respect. It's mutual respect. You know, chemistry and everything else is important as well.
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We had to fix it a couple of times with quite large changes, including rifts, just to get the company to work again. And when we started Helsing, we made a commitment from the beginning that that wouldn't happen to us and that we would focus on hiring and really getting the really exceptional talent from the very beginning. And it transformed, I think, the company.
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But if you truly respect the quality of your co-founders and what they contribute and the job that they do and that they're, you know, 10 out of 10 people, then everyone finds their role. And the roles are shifting sometimes too, right? Like, it's not like, you know, to your point of specialization earlier, it's not like, you know, one person has this role, the other one person has that role.
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We have our different emphases, but we tend to chip in and be involved in all kinds of things, including obviously in the management of the company and the scaling. We all do that together.
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I mean, Helsing is now a company that isn't even that large, but we try to just hire people that are exceptional. And we do everything we can to get those people into the company. We hustle like crazy, whether it's on LinkedIn, whether it's through network. I mean, we won't give up until we get the person that we want. How big is Helsing now?
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Actually, I think there are a lot of exceptional people. 350 people isn't that many. It is possible that at 3,500 and maybe at 10,000, you start to have to make compromises. But I'm not sure how large a company has to grow in terms of headcount. In our experience, the top performers do the work of many people.
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They give the company a light-footedness that otherwise wouldn't be there and the speed that otherwise wouldn't be there. How quickly do you know when someone is exceptional?
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quite often within 30 minutes of an interview that's what i usually try to achieve what are the clearest signs i think it's just a feeling the thing i always look forward is is effortlessness you know not trying too hard just being so kind of on top of the detail of everything that kind of the effortlessness shines through that's the main thing i look for i look for unwavering imbalance
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It's interesting. I never ask questions in interviews like that. I don't have a set of questions. I just try to get into the flow. Really? Yeah. And you don't find there's commonalities in the questions that you ask? No. And I find them quite often too staged. And people, I always think people can tell when a question is staged. And so they're not themselves.
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It's easier for me to just go with the flow and kind of see where it goes.
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Yeah, this is about talent density. We do a founder offsite every three months and we make kind of decisions about how we want to run the company. And one of the decisions that we made was that we really do everything to go for talent density.
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And that means really taking hiring seriously, but also taking performance management seriously and making sure that only people that are Helsing people are at Helsing. And that means very often that we try to reduce the number of people overall. We found that the most performing teams are really small in the company.
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you can achieve a lot, particularly around software, with three to four exceptional people. And so we'd rather have a team of four exceptional people than eight good people. It makes everything easier. It's also cheaper, by the way. Even though you pay above market rate, it's cheaper to do it that way.
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First of all, we don't have a large number of small teams. We have, I would say, a handful that work on particular projects. And then sometimes you rally around something and it can become a little bit bigger. That's happened over the last few months as we were working on particular projects. But what we try to do is identify areas that we know needs to exist. We put a small team on it.
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We try to allow people to self-select as well, obviously, so that you have a team that communicates well, that is highly performant, and then they work on the task. And they may actually move off it eventually, and another team takes over. But that's worked really well for us.
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First of all, I think you need to want to performance manage. Performance management is exhausting. You have to have difficult conversations with people. Sometimes they work out and they become better. Sometimes you decide to part ways. First of all, you have to have the mindset that this is necessary for a company. Do you need to do one-on-ones? No, I don't do any one-on-ones work for people.
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I think that I'm used to them that have structured them properly and that work with people who need guidance in their development. The people I work with are usually senior and don't need that much guidance. If I need a one-to-one with them every week, I think something's probably going wrong. I also think that there is a tendency for one-on-ones to clog up the calendar. You have a lot of them.
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You tend to repeat a lot of things. I used to do them religiously, by the way. I just stopped doing them. It hasn't had a negative impact.
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Yeah, so this is something I noticed when I was mainly angel investing in startups is that eventually you get a certain number of people who are not a good fit for the company and they clog up the system, the company. They make everything harder. They create pockets of unhappiness because they feel maybe neglected or not understood or they don't fit into the culture.
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And you kind of tolerate it quite often as a founder. You tolerate it up to a point where you think, this doesn't feel like my company anymore. Like, what happened? That happened to me at Natural Motion, by the way, at some point. And it's really painful for a founder.
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But the reality is that if you want to counteract that, you have to make performance management one of the main things that you do from the beginning. You have to commit to it early on. And that means that you have to do the performance management. But probably as importantly, you have to also do what we call performance management calibration with all the leaders.
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So what we do at Helsing is that every quarter we get one cohort, so one quarter of the leaders together, and they go through all the performance ratings that they gave their people and their teams.
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And then the leadership team listens to it and gives feedback, not necessarily on the person, but actually to the way they rate the performance and help them calibrate it against what good looks like at Helsing, either because they've been too harsh or vice versa, because they've been too lenient.
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And we do this religiously and it creates a culture of, I think, a well-calibrated performance system. And you need that because otherwise you end up with a lot of unfairness and also with not enough scrutiny, to be honest. When you put someone on a performance improvement plan, it does not work from there.
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I've seen actually quite a lot of people turn around, including at my previous company as well, on a performance management plan. So it's not a foregone conclusion.
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Helsing Speed is something that I nicked from Zynga. Zynga had Zynga Speed. And Helsing Speed is basically... Incredibly creative. Very creative. And we, as the founders, felt very early on that speed was one of the most important things. When we started, I mean, a couple of things. When we started, we wanted to be fast because we needed to be fast. We had to catch up.
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I mean, it felt already, we started the company in 2021, that something was brewing, the geopolitical kind of tectonic plates were shifting, and we felt that we had no time to lose. The reason we raised quite a bit of money from the beginning was because we wanted to make sure that we could be fast, and speed became one of the main things for us.
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So everyone's aware of blitzscaling, the book, but you can summarize it quite quickly. There are sometimes situations when capital is available where it's okay to be inefficient so that you can be effective, basically. and very fast. And we embraced it from the beginning. We tried to get recruitment up and running really quickly, which was crucial for performance culture.
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You need to basically always have pressure on the pipeline of good people coming in in order to be able to manage other people out and so that you end up with a pool of people that are amazing. And so we wanted to shortcut that and found a third party that I wouldn't say overstaffed, but staffed very well so that we could get people in. Did a whole bunch of other things just to be fast.
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Knowing that eventually we needed to settle at a different kind of level and not be inefficient, but be efficient and effective at the same time.
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So I think you need to make a commitment early on that it is usually a temporary period. We wanted to do it for the first six to 12 months. So with recruitment, for example, we used a great third party and then eventually we moved into in-house. How much did you raise for your first round?
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So the seed was 8.5 million euros, but then we were lucky to have Daniel Eck and Prima Materia invest 100 million euros four months later or so.
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Well, Daniel came into the seat round. He was an investor in our seat round, the eight and a half million. And within two or three months, I think he developed so much conviction that he asked, like, I would like to lead your series A, how much money do you need? And I said, ideally, 100 million euros. And he gave us the money through Pure Materia, who've been amazing to work with.
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It allowed us to do the speed thing that I just mentioned, but a couple of other things as well. It allowed us to really focus on top talent very early on. And the second thing that it allowed us to do is to not go for innovation, projects in defense, for incubators and little grants here and there. But because we were quite well-funded, we could go for programs of record.
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So the official large programs, which were hard to get and very risky, but we were well-funded enough that we could just take the risk. And that worked out very well.
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I'm not sure about that. It does make it easier. I would say Helsing is a company that you can only co-found. You need to have multiple founders.