Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg BusinessWeek with Carol Masser and Tim Stenovek on Bloomberg Radio. Well, by now we've all seen the dramatic footage from Sunday's drone attack Ukraine going after different assets of Russia's military deep inside Russian territory. In fact, Carol, by early twenty
twenty five, this is remarkable. When I was praying for this, drones were accounting to sixty to seventy percent of the damage and destruction caused to Russian equipment in the war. This is according to data from the UK based think tank, the Royal United Services Institute.
You got to say, the way we think about warfare has definitely changed dramatically. And this is where Florian Cybel comes in. He's a former German Army helicopter pilot, an aeronautical engineer who a decade ago founded a company called Quantum Systems. It makes multi sensored drones. Now ninety percent of its sales go to the military sector, and it's provided thousands of drones to Ukraine specifically, And so we're kind of dying to talk to him.
Florence Sibel joins us from Italy. Floyd. Good to have you with us. I know there's a little bit of delay. We appreciate you taking the time and stand up a little late in Europe for us on Bloomberg Business Week Daily. First big question that I have for you is, given what you know about Sunday's drone attack, were any of your drones actually used in that attack?
So what we know not not as as in a way that they would act as being the ultimate weapon. All of the drones that we are building are used for ISR missions, which is intelligent swans and reconnaissance. So that means we are spotting potential targets. So our drones have wings, we have flight time of several hours, and then we've we fly deep into anti enemy territories so we spot and then then then other type of drones come in.
Do your drones ultimately replace the capabilities of aircraft such as the U two spyplane.
Well, you know, there's there's a reason for every asset to have and I think you know mostly you know, war times are times of change and new doctrines are happening, and every war that is coming up will not start
as as the as the last one. Ended. So you know, I'm not really sure if the next war will be all about drones, but but what I can say now, definitely it's it's a vehicle for Ukraine to to fight off Russia because they did not have enough conventional weapons to take to take them to the battlefield the way
Russia would have expected. So, I mean, they were just very curious and then using what they have, and and and then that's where we are, and you know, this is technology changing the way things happen.
Well, that's where Florine I kind of want to go. I think after that drone strike by Ukraine in Russia, we had so many conversations in the newsroom about, oh my gosh, like warfare just continually to change very dramatically. My dad and his three brothers all fought in World War World War two, excuse me, a lot of hand to man to man combat was just a very different type of warfare. You know, we've seen the gamification of warfare.
How does drones kind of make it safer on one level in terms of not putting people at the kind of right at the top, you know, the front line, if you will, But at the same time make it easier for someone to flip a switch and send drones into combat.
You know, you use the word that that describes it quite well, which is gamification. You know, it's it's using a lot of technology that that that yeah, was spilling over from adjacent industries like cell phone technology. You know a lot of of the small stuff chips, batteries, cameras that that that they weren't just not available a few
years ago to companies like US. And you know, the cell phone industry basically allowed US all to disrupt classical defense military companies because now you know, it's available to everybody, and and China is very strong in that regard. And I think what has to happen now is we need to rebuild, specifically in the US, but also in Germany and Europe. We need to rebuild the industrial base to be capable of producing thousands, ten thousands, one hundred thousands
of these units. It's not about like a few multi hundred million dollar aircraft anymore. It's about large numbers are treatable platforms. You know, you want to saturate your adversary. And there's companies like Quantum and and you'ill in the US that are changing the rules.
How we play a florin and I am curious there is there somebody, an entity, a country that you will not sell to.
Well, you know, in Germany, all of what we do is very regulated, and so we have a German Export Control author TEA which is called BATHA, which is very much in line with NATO and the German governmental official position and so we have to we have to fulfill these guidelines and guard Yeah, and so it's basically impossible for us, you know, from a legal perspective, for example, to sell into countries like Iran and Russia and China. But also you know then that that that's the legal
perspective on it. And then we obviously we as the founders and we together with our investors, have made it very clear that even though if we could sell to certain countries, you know, we we we we have to feel comfortable with that as as a company. So for example, Saudi Arabia is probably one of those those countries that would be would be quite obvious that we could sell to, but we would probably have a discussion.
Before you mentioned investors, the company is backed by Peter Till. We're going to talk about that in just a minute before we get there. I want to talk about the opportunity outside of Europe, because for much of the past three years you have been selling your drones to Ukraine, but you did just open a one hundred and thirty five thousand square foot facility here in California. What is the opportunity in the US market.
I think that that was a very smart decision, you know, to do that, because the US DUD is the single largest Department of Defense in the world, and obviously Europe as a total is about the same size, but it's very fragmented into twenty six members state countries. So going to the US and entering that single biggest market was a must do for US. There were a lot of people saying that it's going to be hard for a non US company to do well, but I think we
managed to do so. You know, I've spent two years of my life in the US, one year in high school, one year when I was trained as a professional helicopter pilot in Ford Raca, Alabama. So I think I picked a little bit up of the way of how America works and what's the life over there and how the people do business. And so I was very lucky to hire an excellent CEO coming from the drone defense industry, and he was setting up a Quantum Inc. In more
Park and he has been doing incredibly well. And so I think, you know, it's it's not the US or Europe. I think part of our mission is also to in these uncertain times of what we see at the moment where the US is trying to break away from Europe,
that economic companies that are on the free market. Yeah, act as a glue maybe to together us through these times, because you know, the US has been always the biggest ally to Europe, especially what is coming up tomorrow D Day, and you know, we want to pay back a little bit here and so for me it was an that'sural thing to go to the US.
Yeah.
Okay, So we are Bloomberg and we are always curious about interesting startups and as they are growing. And as to mentioned, you are backed by Peter Thiale. You just raised about one one hundred and eighty one million dollars a financing round, valuing you at more than a billion dollars. So kind of going into that unicorn status. When is the IPO, if there is one, will be Europe will be the United States? What will you guys do it.
It's unclear at the moment. Right now, we're doing very well. We're probably going to raise one or two more rounds. You know, being on the on the capital market also means you're very transparent in what you do. And you know, these big government contracts we are after there either zero or one, and you know, we don't want to end up being the goal of you know, speculative betting on
us or against us on Wall Street. So I think we'll take like one or two more years, one or two more financing rounds, and then probably as we are a German company, we could look into doing a European IPO or as you said, you know New York Stock Exchange, probably ten depends a little bit also on how well we do with our US facility. As you said, we have heavily invested in one hundred and thirty five thousand
square foot. We need to fill that with business. We expect the US government to give us more contracts to pay back that we invest so heavily into the US now and then it's an open decision. I would say, as of today, Well, it's always.
You know, interesting, we talked so much about here we are in San Francisco, you know, the heart of Silicon Valley, you know, just nearby innovation that happens around the world. You are based in Munich, How does that startup environment differ there over Europe, in Munich specifically versus maybe elsewhere versus the United States, for example.
Yeah. So you know, having lived in the in the United States and having met a lot of US investors in the last six, eight, ten years, you can definitely say that the spirit of go big or go home or think big is definitely part of Silicon Valley culture. Whereas in Germany we have excellent engineering, I would say,
at very decent price and cost of living. So I think there's a there's an advantage for both locations to be Obviously, especially in the beginning, I was always a little bit cellous looking at the amount and the number of companies that are still being founded in the US. So it's so much more and bigger than Europe. But I think we're catching up. You know what has happened in the last two or three years. It's clear for us now in Europe that we are on our own.
We need to reinvent ourselves, we need to define who we are, who we want to be in that world, you know, and Germany always has been the place of great, world leading tech companies. I think we have just not had that in the last one or two decades, and I think it's time to change that again, and we are ready to do that.
Hey, f Lauren, before we let you go, I know you're focused on these UAVs that are really about reconnaissance, but I want to pick your brain a little bit about the areas of innovation, especially here in the US, because back in March, the US government awarded Boeing the new Air Force F forty seven stealth fighter jet. There's sort of a lot of controversy around this because it's still going to be crew based, though the President did
say we'll be able to fly remotely. Should the US right now or should countries be investing in any crewed aircraft right now? Or is the future one in your view UAV.
I think the future is unmanned. It's definitely about robotics and unmanned systems. The question is how fast will that happen. I think the UK has just brought up a new defense of policy, they call it twenty forty, saying twenty percent will be or should be assets classical assets like there used to be so man fighter jets. Forty percent ISR and intelligence and forty percent unmanned dri strike capability.
So I think it's it's not either or I think it's a combination both, but definitely more than we used to see. And you know, I don't know if the forty seven is going to be man or unmanned. Probably these high value assets will still be manned, but they will definitely not fly into enemy territory. I think they have a stand of capability extreme long range radar range because they're so super expensive. But let's see, you know, it's changing. Maybe in the next war will be not
fought on drones. Maybe it's in space.
Maybe we won't have a war, which sorry for you, but it would make me make agricultural drones too.
It's just that, Yes, it's just the mix has been really military focused over the last it would be. Now you're asking for a lot, Carla Florian, thanks for joining us. It's Laurian cybel CEO of Quantum Systems, joining us from Italy just now. He's also featured in Business Weeks One to Watch in Technology. It's a guide to the people you'll be hearing more about in the near future, so check that out in the current issue. Up with the Purpose always a great list