CIA-linked investor helped German drone maker crack US market

German defence startup Quantum Systems gained an early foothold in the US with the help of In-Q-Tel (IQT), a venture capital firm linked to US intelligence agencies, highlighting the continued influence of American capital and networks over Europe’s emerging defence industry.

Quantum Systems co-CEO Sven Kruck told Reuters that US investors, including IQT, helped the company establish contacts in Washington and secure work with the CIA and FBI.

“It made it easier to get started in the U.S. with clients CIA and FBI,” Kruck said. “There were routes that opened up. That's how we found the way to the USA. We were stronger in the U.S. early on, where the German customer was much weaker.”

The company, which supplies reconnaissance, attack and interceptor drones to countries including Ukraine and Germany, is now valued at around $8 billion. Kruck said its initial contracts with US intelligence agencies generated modest revenue but helped build credibility.

IQT was established by US intelligence officials to identify and invest in technologies relevant to national security. Although its investments are typically small, often below $3 million, its value also lies in connecting startups with US defence customers.

“Europe's deep-tech ecosystem is a critical source of mission-relevant innovation,” said Jennifer Nelson, IQT’s executive vice president for international affairs. “Germany is a particularly important innovation partner and strategic ally,” she added, calling it a “cornerstone of Europe's defence ecosystem”.

The firm has invested in companies including Palantir Technologies and Anduril and is expanding its presence in Europe as governments increase defence spending.

European lawmakers have raised concerns that such investments could give Washington strategic influence over critical technologies.

“In-Q-Tel is not a purely financial investor but has a mandate to secure access to the best technologies for the U.S. intelligence services,” said Marie-Agnes Strack-Zimmermann, chair of the European Parliament’s security and defence committee.

Kruck acknowledged the importance of investor networks, saying, “Every investor ... has a network behind it and, logically, you try to use this.”

However, he added that IQT had not sent him a “proactive email” in the past two years.

By Vafa Guliyeva