Dear D3 Investors,
We are writing to you on our return from the Munich Security Conference, where our portfolio founders reached an important milestone for both D3 and the Ukrainian defense ecosystem.
We had the privilege of attending the opening ceremony of the first co-production facility launched under the Build with Ukraine government initiative. As part of a joint venture structure with Quantum Systems, Quantum Frontline Industries, our portfolio company Frontline will manufacture 10,000 units of its Linza drone system (often referred to as the “Ukrainian Mavic”) at a newly established facility on the outskirts of Munich. The program is financed by the German Ministry of Defence, with all systems designated for delivery to Ukraine.
The first drone off the production line was presented to President Zelenskyy during the inauguration ceremony. This facility marks the beginning of a controlled export and localization process, including the formal transfer of approved intellectual property from Ukraine to Germany. In Frontline’s case, this transfer received presidential authorization. Notably, the core battlefield-proven IP underlying the joint venture originates entirely from Ukraine.
President Zelenskyy attends the opening of Quantum Frontline Industries production facility in Munich
But we are not done.
Our portfolio company Airlogix announced the launch of Auterion Airlogix Joint Venture GmbH, one of the most significant European initiatives to scale AI-guided unmanned systems for Ukraine and NATO allies. The joint venture combines combat-proven Ukrainian unmanned platforms, advanced autonomous software and AI guidance capabilities, and German industrial manufacturing capacity and supply chain strength.
Stay tuned for a major contract announcement under this JV in the near term.
President Zelesnkyy attends the signature ceremony of the Auterion Airlogix Joint Venture GmbH
Germany has gained a lot of momentum. While it had a late start into new-defense military aid funding, the recent scale and velocity of contract awards now position Germany as a leading European destination for Ukrainian defense companies through joint ventures and industrial partnerships. There is broader reallocation of industrial capacity and engineering talent from the struggling automotive sector into defense manufacturing. The new Frontline production facility was previously occupied by Lilium Air Mobility before the company entered insolvency.
Munich is emerging as a central node. The Technical University of Munich (TUM) provides a deep pipeline of talent that is increasingly going into defense.
We have been actively encouraging other European countries to follow this model by making bold investments in Ukrainian producers, unlocking procurement channels for battle-proven systems, and building domestic ecosystems around their distinctive strengths—whether maritime capabilities, AI, quantum, or other areas for defense.
Ukrainian companies are ready to scale internationally. Following the announcement by President Zelenskyy that at least ten export centers will be established across Europe by the end of the year, the structural framework for deeper European defense-industrial integration is accelerating.
Total = 906 (+25)
We visited the European Defense Tech Hackathon in Munich during the Munich Security Conference. Since its launch in partnership with D3 in July 2024, the initiative has seen explosive growth, with more than ten hackathons planned for this year alone.