European defense technology startups have stepped up commercial negotiations with Middle Eastern governments since the Iran war, company executives told CNBC. Another CEO said there was a “surge” in interest from Gulf states as they scrambled to strengthen their defenses against drone and missile attacks.
Since the joint US-Israeli military operation began in late February, Iran has targeted neighboring countries, with more than 3,000 drones and missiles fired toward the United Arab Emirates, Saudi Arabia, Bahrain and Kuwait, according to data compiled by the think tank Center for Strategic and International Studies.
European startups that develop defense technology, particularly drones and anti-missile aircraft, told CNBC they are increasingly approaching Gulf states for dialogue and supplying their militaries. Some companies are ramping up hiring in the region to meet demand for their systems.
commercial conversation
Earlier this month, the UK government convened a conference of defense companies and met with ambassadors and defense attachés from Saudi Arabia, Kuwait, Bahrain, Qatar, the UAE, Iraq and Jordan.
The government said in a statement that discussions focused on “new defense equipment and technology that UK-based companies could rapidly supply to allies to counter Iranian drone and missile attacks.”
The meeting was attended by Estonia-based startup Frankenberg Technologies, which develops missiles to intercept drones, UK-based drone and missile interceptor company Cambridge Aerospace, and UForce, a joint Ukrainian-UK startup that develops autonomous systems.
At Frankenburg, commercial conversations with Gulf countries have accelerated since the outbreak of the Iran war, CEO Kusti Salm told CNBC.
Salm said the company is currently in talks with a number of governments in the Middle East about technology procurement, but declined to disclose details.
Salm told CNBC that potential orders from Gulf countries number in the thousands of missiles, adding that Frankenberg is working with these customers to meet demand with “expedited delivery schedules.”
Live test firing of Frankenburg Mark I interceptor missile. Credit: Frankenburg.
Cambridge Aerospace declined to comment on commercial negotiations or financing plans in the Middle East when contacted by CNBC, but the company announced missile and two drone interceptor products in September.
The company describes one as a low-cost, highly scalable interceptor for cruise missiles and large unmanned aerial vehicles, and the other as an “interceptor for faster, higher-value targets.”
Earlier this month, the Financial Times reported that the company was in talks to raise new funding at a valuation of more than $1 billion.
Valarian, a U.K.-based startup that builds digital infrastructure for sensitive use cases such as defense, had no defense contracts with Gulf states before the Iran war, but has seen an increase in commercial negotiations with Gulf states since the conflict began, CEO Max Buchan told CNBC.
Interest in inbound
CEO Oleg Roginsky told CNBC that there has been a “surge” in Gulf interest in UForce’s defense technology since the outbreak of the Iran war. Uforce develops several defense technologies, including anti-unmanned aircraft systems (UAS), maritime and attack drones, and battlefield software.
“There’s been a lot of inbound interest,” he says. “Gulf states are coming to us to explore ways to conduct large-scale unmanned operations,” Roginsky added, including interception, demining, strikes, and future convoy and maritime escort and patrol operations.
He told CNBC that Euforce is providing defense technology to Ukraine’s operations in the Black Sea, adding that the lessons of that war “are directly applicable to what’s happening in Iran, both operationally, tactically and strategically.”
“We are considering a maritime denial by mines and missiles on the Iranian side, very similar to how Russia initially blocked exports of Ukrainian grain.”
UForce, which raised $50 million earlier this month at a valuation of more than $1 billion, is currently looking to hire a team permanently based in the Middle East due to demand from the Iran war. The company, which currently has a Ukrainian delegation in the region, plans to hire five to 10 employees in the coming weeks, Roginsky told CNBC.
Frankenburg is also considering building a team based in the Middle East. The startup had no employees in the area before the war, but is now looking to hire “significantly,” CEO Salm told CNBC. Frankenburg has focused on the Middle East since its founding in 2024, but the Iran war has accelerated hiring plans, he said.
European defense technology startups have raised record amounts in recent years as global geopolitical tensions rise. The sector will raise $1.8 billion in 2025, nearly triple the previous annual high, and has already raised $854 million by 2026, according to deal aggregation platform Dealroom.
The UK and Germany have emerged as key hubs for this new wave of defense companies, while France and Ukraine are also increasingly incubating start-ups with deep pockets.
The governments of the UAE, Saudi Arabia, Qatar and Kuwait have been contacted for comment. Bahrain’s government declined to comment.
– CNBC’s Emma Graham also contributed to this report.
