Dear Investors,
We are holding our breath watching the developments in the Kharkiv region.
We received highly classified information from the General Staff on the detailed account of the number, type, and location of enemy assets. This gives us guidance on the range and types of drones needed to take out the top of the high value target list. The gap between the list of identified HVT and the availability of munition to take these out is in the orders of magnitude at the moment, unfortunately.
Total = 382 (+3)
We have extended our standard investment offer of $125K for 7% to Flightmind.ai. After conducting extensive search regionally and internationally for a team tackling drone autonomy, we found this to be the one with the most potential. They started with visual navigation and expanding towards terminal guidance, and more. They are already deployed with one long range drone producer doing missions inside of Russia and occupied territories. The team is highly technical with the Founder/CEO coming from the Samsung R&D center in Kyiv. Here is the investment case, pdf attached. As a reminder, here is the landscape we put together for GPS-denied navigation/autonomy solutions .
We visited the Toloka factory, an underwater torpedo (or maritime drone) company. We introduced this company last year. Back then, they were not interested in our investment but the situation has changed as they are getting ready to scale. They have three models covering a range of 400-1000 km. They are still conducting testing in the Black Sea. Combat missions are expected in early Fall (expect to see it in the news). The SBU plans to order a minimum of 30/month at a price ~$100K for missions around Crimea against the Black Sea Fleet and the Kerch bridge. We will continue our diligence.
Toloka 400 km model
Guardian RF with their prototype, from Georgetown University dorm
There have been interesting changes in the power dynamics between MoD, MDT, and MSI. When Minister Umerov took over the MoD, he invited the former Head of the Army of Drones (from the MDT) Katya Chernogorenko to become his Deputy Minister. Ever since then, the center of gravity for drone procurement as well as the relationship with the drone ecosystem has clearly changed towards the MoD. Our cooperation with the MoD has deepened and we are in close collaboration for boosting innovation/digitalization of the defense sector in general in Ukraine. Below is the cooperation framework we agreed with the MoD for their newly created Defense Innovation Office (DIO). Attached is a presentation that explains the MoD new digital track. We are excited by these developments.
We would like to welcome David Chinn to our LP pool. He is currently the Sr. Director for McKinsey in charge of the defense practice and comes to D3 with a lot of connections and desire to engage. David is British/Israeli and splits his time between London and Israel. I met him in person while in London and we had very productive discussions on how he can help our portfolio companies go global. Considering his strategic participation, we lowered the minimum check for him to $150K. Thanks to Rob and Dan for taking the time to do reference calls. We will conduct the regular KYC and add David to this update once done. We are almost done with the KYC for the other new LP, founders of Uklon.
We are trying to reach the family office of Ken Griffin to check on his interest to become an LP. If any of you have a connection there and are willing to make an intro, we will be grateful.