German drone maker Quantum Systems secured an early foothold in the United States with decisive help from In-Q-Tel (IQT), a venture capital firm established and backed by U.S. intelligence agencies, including the CIA. The case, reported as an exclusive by Reuters on August 31, 2026, underscores how U.S. capital and intelligence-linked networks continue to shape Europe’s defence technology landscape even as Berlin and Brussels push for greater strategic autonomy.
Quantum’s co‑CEO Sven Kruck told Reuters that IQT’s involvement
“made it easier to get started in the U.S. with clients CIA and FBI,”
opening Washington doors that would otherwise have been harder to access for a foreign defence startup.
In this way, Quantum was able to obtain a reconnaissance contract from US intelligence agencies, a small deal in terms of revenue but vital in terms of gaining credibility in the biggest defence market in the world. In this story, one sees an all-too-common trend in the realm of defence technology, where money is important but networks are more important. Typically, the amount invested by IQT is under $3 million, and while the cheque size is not particularly important, IQT’s worth is more in its networking ability to introduce start-ups to US defence and intelligence customers that can test and adopt their technologies.
Quantum Systems: From German startup to $8 billion defence player
Germany-based Quantum Systems has turned out to be one of the biggest defence startups in Europe, with an estimated valuation of about $8 billion as of August 2026. The firm is involved in selling drones that conduct reconnaissance, attacks, and interception missions to clients like Ukraine and Germany, as it places itself at the forefront of the European effort to rearm itself in the wake of Russia’s assault on Ukraine.
Kruck explained that American investors
“know the administration that rules and make it possible to open up communication,”
while stressing that products still have to be convincing on their own merits. In practice, that combination — credible technology plus U.S. government access — allowed Quantum to gain traction in Washington well before it had deeply penetrated its home market.
“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,”
Kruck said, highlighting how early U.S. contracts helped validate the firm internationally.
To meet U.S. requirements for foreign defence suppliers, Quantum also established local operations.
“That is why we have factories in the USA and staff there,”
Kruck noted, pointing to the structural demands of selling into the American defence ecosystem. Those requirements reinforce Washington’s leverage: even when technology is developed in Europe, U.S. rules on exports and technology transfer mean that American authorities can effectively vet or block sales to third countries.
In-Q-Tel’s model: Small cheques, outsized influence
In-Q-Tel was created by intelligence agencies of the United States to fill in the vacuum that exists between innovation of the commercial technology industry and what the intelligence sector requires. Some of the technologies included in the portfolio include those of Palantir Technologies and Anduril from the United States, while other innovations come from outside, such as the German defense company, Stark. It is the strategy of IQT to play the role of curator rather than writing a cheque of millions.
Jennifer Nelson, IQT’s executive vice president for international, framed the firm’s expanding role in Europe in strategic terms.
“Europe’s deep-tech ecosystem is a critical source of mission-relevant innovation,”
she said, adding that
“Germany is a particularly important innovation partner and strategic ally,”
which IQT views as a “cornerstone of Europe’s defence ecosystem.”
She also stated that
“IQT continues to expand investments in German dual-use innovators … so allied government teams can evaluate and adopt breakthrough capabilities faster.”
The gains for companies such as Quantum are obvious. A relatively modest investment would result in connections, test runs and ultimately agreements that would otherwise take many years to come through the normal procurement process. Although Kruck did admit that the relationship was not very intensive on a daily basis, he noted that IQT had not sent him a “proactive email” in two years. This is an important characteristic of IQT’s approach: it is most impactful up front, assisting companies to get into the system and then it is down to market forces.
Strategic unease in Europe: Access versus autonomy
While Quantum’s executives present IQT’s role as a pragmatic enabler, the arrangement has triggered unease among European policymakers concerned about long-term strategic dependence. Marie-Agnes Strack-Zimmermann, chair of the European Parliament’s security and defence committee, warned that IQT is
“not a purely financial investor but has a mandate to secure access to the best technologies for the U.S. intelligence services.”
Her concern goes beyond balance sheets.
“There can be strategic influence beyond the business with the United States through investment stakes, observation rights, development and licence deals as well as the access to government contracts,”
Strack-Zimmermann said, pointing to the multiple levers through which Washington can shape the trajectory of European defence startups.
In her view, reliance on U.S. capital risks embedding American priorities into European defence innovation, potentially at odds with EU strategic goals. Germany’s defence ministry echoed the need for caution, saying it takes investor influence in the defence sector seriously and that shareholders should not interfere with a company’s operations, technology or research. The statement reflects a broader tension: Berlin is seeking to reduce dependence on Washington after past threats to NATO and shifting U.S. priorities, yet rebuilding Germany’s military without U.S. capital and market access remains a major challenge.
The procurement reality: Why U.S. contracts still matter
A contract from a U.S. intelligence agency or the U.S. Department of Defence means not only money but a ticket into credibility and future sales for any startup developing defence equipment. As Kruck puts it, Quantum’s reconnaissance with U.S. agencies was modest but strategically important. Once you get into the U.S. system, you get all the advantages of regular orders, recommendations and a network effect. At the same time, your opportunities will be limited by a number of restrictions: just like all other defence companies, Quantum cannot deliver anything it develops to other countries without U.S. approval, thus giving additional weight to Washington’s influence on export.
The issue is quite familiar for European defence industry, which uses U.S. components and software: although your platform can be European, you still need permission from American officials to deliver it to some customer or region. Thus, we have a paradoxical situation in the development of Europe’s defence industry. While European politicians talk about sovereignty and independence, the most promising defence startups have to gain recognition in the U.S. IQT case with Quantum perfectly illustrates the problem: a German startup working on drones for Europe needed help from CIA investors to break into the U.S. market and, therefore, into the global defence one.
Policy gap: Europe’s search for its own In-Q-Tel
There is growing awareness among European policymakers and politicians about the need for the continent to have its equivalent of IQT to attract investment and access to government contacts for young companies. As highlighted by Strack-Zimmermann et al., there is currently no equivalent of IQT in Europe in terms of its mixture of capital at the seed level and intelligence community connections and procurement processes. In the absence of such a vehicle, Europe-based defense companies will have to make a choice – either remain small and rely on European government contracts that are both fragmented and slow or opt for U.S. investment and buy-in.
CIA Director John Ratcliffe earlier this year said the agency was
“optimizing our approach to working with the private sector,”
signalling continued emphasis on public–private partnerships in defence and intelligence. The CIA declined to comment on the Quantum case specifically, but the broader message is clear: U.S. intelligence agencies view commercial innovation as a force multiplier, and firms like IQT are central to that strategy.
The Quantum Systems story is not just about one company’s success; it is a lens on how defence innovation is being globalized, networked and, in many ways, Americanized. U.S. capital and intelligence-linked investors remain pivotal for European defence startups seeking access to the world’s largest defence buyer. Even as Europe ramps up military spending and talks of sovereignty, the practical realities of procurement, technology transfer and export controls keep Washington at the centre of the ecosystem.
