The South Korean defense giant has an order backlog of about $69 billion at the end of 2024, according to media reports. South Korea is also accelerating investment in advanced weapons systems and expanding defense ties, particularly with Europe. With the signing of a new EU-South Korea security and defense partnership in 2024 and increased exports of vehicles and artillery, the country has become Europe’s second-largest arms supplier to NATO members.
But despite its huge industrial footprint, there are surprisingly few startups competing with or competing against incumbents. The country’s defense technology startup scene is still in its infancy, revealing a significant gap between South Korea’s manufacturing strengths and early-stage innovation.
Bone AI, a startup based in Seoul and Palo Alto, California, launched earlier this year with ambitious plans to build a fully integrated AI platform that connects software, hardware, and manufacturing.
The company develops next-generation autonomous aerial (UAV), ground (UGV), and marine (USV) vehicles for defense and government customers, with a primary focus on B2G contracts. While the goal is to eventually operate all three types of systems, Bourne is starting with airborne drones with a defense focus. It is designed to streamline missions such as logistics support, wildfire detection, and anti-drone defense.
Founded by DK Lee (also co-founder of MarqVision), the company has raised $12 in a seed round led by Third Prime with participation from Kolon Group, a Korean strategic investor with expertise in advanced materials development and manufacturing. In an exclusive interview with TechCrunch, Lee said Kolon is the ideal strategic partner for Bone, which operates across AI, robotics, and next-generation manufacturing.
The startup is already profitable, Lee noted, having signed a seven-figure B2G deal and raised $3 million in its first year of operation. Additionally, Bourne was selected as the winner of a South Korean government-backed end-to-end logistics program to deploy UAVs and UGVs leveraging autonomous stacks.
When asked how a less than one-year-old company is already winning contracts and generating revenue, Lee told TechCrunch that Born acquired a Korean drone company called D-Makers and its intellectual property (IP) just six months after it launched. He added that Born originally focused on AI models for robotics, but is now merging its existing AI division with a newly acquired company, and further acquisitions are planned.
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Lee told TechCrunch that he personally invested more than 10% of the round, or about $1.5 million. “This was important to me because I wanted to show both my investors and my team that I am fully invested in this mission, both financially and emotionally,” he said.
Bone is Lee’s second business. My experience co-founding MarqVision gave me first-hand insight into building and scaling AI products around the world, but it also convinced me that the next frontier for AI is not just digital. It’s physical.
“After I left MarqVision, I basically started from scratch, attending robotics conferences like IEEE ICRA, cold emailing Google RT-1/RT-2 engineers, and even walking up to tenstorrent CEO Jim Keller at a cafe just to introduce myself and grab coffee later,” Lee said.
Bone AI should not be categorized as just a defense technology company, the founder continued. Lee has broader ambitions, building the company as a “physical AI” company that brings together advanced AI simulation, autonomous algorithms, embedded engineering, hardware design, and large-scale manufacturing under one roof.
While preparing his second company, Lee realized that AI and hardware were advancing in silos.
“No one was building the connective tissue, the industrial backbone, that allows intelligent machines to exist at scale. Even Nvidia, today’s most valuable AI company, relies on a vast ecosystem of manufacturing and production partners across Asia and Europe,” he told TechCrunch.
Lee points to South Korea’s track record of building global hardware manufacturing powerhouses such as Hyundai, Samsung, and LG. “This is why more drone and small robot companies should be born here, and South Korea can fully support them,” the CEO said. “At Bone, our mission is to build a physical AI supply chain within Korea and expand that capability to the United States, Europe, and other allies.”
While Anduril has become a household name in the US and is valued at more than $30 billion, Hellsing’s last funding in Europe was around $13 billion. In smaller markets like Israel, companies like Kela Technologies have achieved similar valuations.
We haven’t yet seen the same level of adoption in Asia, Michael Kim, general partner at Third Prime, told TechCrunch. “Born is at the intersection of sovereign AI, multipolarity, and reindustrialization, as economies around the world, not just the United States, focus on reindustrialization,” he said, highlighting both the company’s mission and the problems it aims to solve.
South Korea produces high-quality, cost-competitive hardware across multiple sectors, including heavy industry, shipbuilding, automotive, and semiconductors.
“Many niche hardware players exist but are not funded by Bay Area VCs. Bone has a strong ‘buy-versus-build’ strategy to acquire and integrate these assets, accelerating product maturity and commercial traction,” Kim said.
