Hi Eric,

As you are well aware, Ukraine went through major military leadership changes last week. We already feel it at the operational level. We are incredibly thankful to General Zaluzhniy and will hand him the attached letter with an invitation to become our Emeritus Mentor at D3.

Deal Flow

Total = 277 (+6)

• We are still processing companies from the hackathon. Norda was the winner of the Last Mile Targeting category and has moved to our technical assessment phase.
• We are planning to invest our largest check so far ($300K) into Airlogix's $2M round to advance R&D into long range drones for missions into Russia. They plan to launch a 2000km, 50kg payload model in 6 months, which would be the first of its kind. Revenues for 2023 were $5.1M. The valuation is being negotiated between $15-20M, and therefore the larger check. We have been guiding the founder for the past few months on how to fix the cap table from a previous round that was poorly negotiated. This is now the only blocker to our investment and should be cleared soon.

Portfolio news

• Tytan has successfully tested their anti-Shahed interceptor airframe SPEAR. Watch video! They have partnered with German contractor IABG to showcase their capabilities to the Bundeswehr (German MoD).
• Zvook is expanding their footprint of anti-Shahed acoustic sensors with sales to the Dnipro and Kharkiv municipalities. With an installed base approaching 600 sensors, each covering 35 km2, they cover around 5% of the entire territory of Ukraine.

Tytan SPEAR Testing

GR and Ecosystem

• Zelenskiy has created the new [Drone Force](https://www.telegraph.co.uk/world-news/2024/02/07/ukraine-russian-war-kyiv-creates-new-drone-force/#:~:text=Volodymyr Zelensky has ordered the,battle plans for their use.), at the same level of importance as the Army, Navy, and Air Force, similarly to how the US created the additional Space Force. A leader for this force, Vadim Sukharevskiy, has been assigned from the 59th brigade.
• The department of unmanned technologies under the General Staff has created the Unmanned Systems Doctrine for drones per General Zaluzhniy's orders. It was signed by Zelesnkiy on January 1st and has been recently leaked (attached). The document falls very short of an actual military doctrine and it is essentially a catalog of drone types.

ЗСУ_Доктрина_БПЛА.pdf

• A new state defense procurement agency (DPA) has been created by the MOD with an additional budget. This adds an interesting level of competition on the buyer side. It is also a way to balance drone procurement power between the MOD (Rustem) and MDT (Fedorov). Please note that drone procurement by the MOD is fairly new. The MDT used to be the only Ministry spearheading drone procurement and adoption.

As you can see, drones continue to dominate the conversation and the war.

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You can find previous updates on the link.

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Slava Ukraini🇺🇦