UK Startup Skycutter Builds Drones for Ukraine Amid Europe's Defence Spending Push

Engineers at the British startup Skycutter design weapons for Ukraine from a small workshop in England's East Midlands. A row of 3D printers produces fuselages for interceptor drones, while workers assemble motors and navigation chips by hand. Partner factories in Ukraine repeat the process hundreds of thousands of times each month.

Swarms of cheap, deadly and often autonomous drones have transformed combat in the war. Troops far from the front line move constantly to dodge aerial attacks, using netted tunnels and fibre optic cables across landscapes to guide drones past radio jamming. Cities face terror from guided missiles that cost less and see wider use than earlier models.

Europe's militaries race to catch up, planning billions in weaponry spending. Pressure mounts from Donald Trump's doubts on the Nato alliance and his calls for members to raise defence budgets.

Trump's stance and war nearby have intensified criticism that Europe depends too much on US weapons makers.

The EU pledged €800 billion for defence over four years. The UK committed more funds, with Keir Starmer facing demands to deliver after Labour's losses in Thursday's elections.

A push for defence sovereignty, the ability to produce and deploy weapons without relying on the US, directs much of the money to local firms. Well-funded startups expand production and promise to outperform traditional manufacturers and Silicon Valley competitors, though many claims remain unproven.

Militaries see no full replacement for infantry or heavy equipment like tanks, artillery and ships. But planned spending targets drones for air, land, sea and underwater use.

Gen Sir Roly Walker, UK chief of the general staff, said last year he wants forces' equipment to split as 20% survivable with crews inside, 40% attritable where losses matter less, and 40% consumable for single use.

One executive at a fast-growing weapons startup said Europe feels it should stand on its own feet. "Sovereignty is about control. If you buy things off the shelf from elsewhere you are always ceding some control."

The UK consults on how much content must be British for a product to count as sovereign. Manufacturers cannot count on parts from potential adversaries like China.

"A lot of supply chain diversification dreams have evaporated," said Kusti Salm, former Estonian defence official and now CEO of anti-drone missile startup Frankenburg. "I think it's natural if Europe wants to sustain its prosperity and freedom."

Ricardo Mendes, CEO of drone maker Tekever, said unmanned aerial vehicles sparked a radical shift in defence technology, with firms betting on future needs instead of long-term contracts upfront.

Mendes co-founded Tekever in Portugal in 2001. It hit a billion-dollar unicorn valuation last year with 1,200 staff, new factories in Swindon's UK drone cluster, Wiltshire, and Cahors in south-west France.

Other European defence tech unicorns are Helsing, backed by Spotify founder Daniel Ek; and German drone makers Quantum Systems and Stark Defence. Stark and Helsing secured German military orders for attack drones. All but Quantum invest in UK factories. British missile firm Cambridge Aerospace, chaired by former defence secretary Grant Shapps, nears billion-dollar status.

US rivals include drone maker Shield AI, autonomous boat firm Saronic Technologies, and anti-drone company Epirus. Palantir and Anduril, named from JRR Tolkien's Lord of the Rings, lead the pack. Both expand in Europe, especially the UK, but face scrutiny over pro-Trump backers.

Palantir has support from billionaire Trump donor Peter Thiel, a critic of liberal democracies who also backed Stark. Stark says Thiel holds no operational role. Palantir CEO Alex Karp praises US dominance. Anduril's Palmer Luckey, 33, hosted a Trump fundraiser and built administration ties.

Cheap sensors and motors enabled startups. Traditional manufacturers missed the drone shift, as mass production cuts profits.

Rheinmetall head Armin Papperger called Ukraine's drones low-tech Legos made by housewives with 3D printers, then backtracked. The remark showed war's new economics. Iran's Shahed drones, used by Russia on Ukrainian cities and fired at neighbors amid US-Israeli strikes, cost about $30,000 (£22,200). Nato systems use missiles costing hundreds of thousands or millions for Patriot interceptors.

Startups target cheap knock-downs. Frankenburg guided missiles cost low five figures in dollars. Skycutter's cheapest ground-to-air interceptors run about $2,000.

Every startup stresses agility over primes amid war's rapid changes.

Skycutter has 15 UK staff and 50 Ukrainian contractors. Founders started with civilian drones for pipeline checks in 2018. Putin's 2022 invasion created demand.

They worked directly with Ukraine front-line units in a cat-and-mouse game against Russian jamming, said one unnamed director after threats to European makers. "Unless you're there and working with units and what the Russians are trying to do, you fall behind."

Mendes said Tekever made over 100 versions of its main product in three Ukraine war years, adding software, sensors and propulsion as ready. "This is constant. You are constantly exposed. The only constant that you have is that it is evolving."

Militaries and governments struggle with the pace. The UK strategic defence review last year urged more drones, but its author last month faulted leaders including Starmer for corrosive complacency.

Starmer cut international aid for weapons, upsetting Labour MPs. A defence plan lags, held by the Treasury. BAE Systems warned last month it would halt next-generation fighter work in June without funds.

The Financial Times reported last week that finalizing the plan and covering a £28 billion gap form part of Starmer's post-election reset.

"The UK has been slower than most" to boost spending, said Kevin Craven, CEO of ADS aerospace and defence lobby. "We are disappointed with the pace."

Skycutter beat rivals in the US military's Drone Dominance program. It warns of UK delay risks: Ukraine videos draw foreign offers, but UK funds stall.

"We were knocking at the door of the MoD," the director said. "Unfortunately, the MoD weren't interested at the time."

"We need to make a strategic decision as a company," the director added. "Do we stay in the UK or leave the UK? The UK ultimately is our home. There's no money at the moment because there's no defence investment plan. We're running out of time."

Doubts persist across Europe on buyer readiness for war-driven tech shifts, though executives see changing views.

"It's a really fast-moving ecosystem and I don't think the procurement is ready to deal with it," said James Acuna, ex-CIA officer and COO at US drone investor Ondas Capital.

Mike Armstrong, UK managing director at Stark, said militaries adapt as years-long timelines fail. "Modern defence depends on sustained, industrial-scale production, rather than one-off procurement decisions. So long-term signals around demand and procurement really matter, because that gives companies like us the confidence to invest and scale at the pace the current security environment requires."