This Peter Thiel-Backed Start-Up Triples Valuation to $3.5 Billion

Peter Thiel, co-founder of Palantir Technologies, backs German drone start-up Quantum Systems through his investment firm, Thiel Capital. (Stephanie Keith/Getty Images)

Peter Thiel, the Silicon Valley billionaire best known in the investing world as the co-founder of Palantir Technologies, has deepened his ties to the defense technology sector by backing a German start-up that recently tripled its valuation.

On Thursday, drone maker Quantum Systems announced that it had raised 180 million euros in a Series C funding round, bringing its valuation to 3 billion euros, or $3.47 billion USD. The latest fundraise brought the total amount raised this year to 340 million euros.

Quantum Systems, which actually has no connection to the buzzy world of quantum computing, develops dual use drones for both government and civilian use, such as for agriculture.

Its name is associated with Thiel Capital, a California-based investment firm founded by the tech magnate, who himself was born in Germany and holds German citizenship. In 2023, Thiel Capital was named among the major backers in a Series B funding round.

Thiel was quoted as saying a year earlier that the future of unmanned aircraft systems was “in neither software nor hardware alone, but in the intelligent synthesis of the two.” He professed that Quantum Systems was “a leap ahead of its competition.”

The billionaire has served as Palantir’s chair since its inception. His interest in the military and surveillance space is nothing new: in addition to his lasting ties to Palantir, the maker of data analytics software used extensively at the federal level, Thiel has been a longtime backer of Anduril Industries through his venture-capital firm, Founders Fund.

Anduril, which has yet to file for an initial public offering, develops AI-powered autonomous defense systems. Founder Fund has been a lead investor in nearly every funding round. In June, the firm injected $1 billion into a Series G round, marking the largest single investment in its history.

Quantum Systems achieved unicorn status in May, when its valuation swelled to 1 billion euros. The start-up was co-founded by German army officer Florian Seibel in 2015. Seibel, who serves as co-CEO, created a separate company called Stark to deliver attack drones.

While Quantum Systems initially centered its efforts on air drones and AI-powered surveillance software, the start-up has indicated that it plans to start offering land and sea drones as well. The company plans to use at least some of the cash raised to acquire other companies and boost production.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com