Ukraine’s drone sector has more than 500 companies competing for orders
Swarmer, a drone company founded in Ukraine and now based in Austin, Texas, said it is buying Ratel Robotics in a cash-and-stock deal valued at up to $224 million. The Wall Street Journal described the transaction as one of the industry’s largest tie-ups and an early sign of consolidation across Ukraine’s drone industry. Swarmer shares were up 10.91%.
The Journal described Ratel as one of Ukraine’s leading makers of battlefield robots. Swarmer is backed by Erik Prince, the Blackwater founder and Swarmer chairman, as well as an investment vehicle tied to former Google CEO Eric Schmidt. The Journal also described Prince as an ally of President Trump.
The deal comes amid a broader push by U.S. investors and defense firms into Ukraine, where battlefield-tested drone technology has drawn Western interest. The Journal described Ukraine’s drone sector as among the world’s largest and most advanced, and said it was built on technologies the country pioneered in its war with Russia.
The sector includes more than 500 drone companies pursuing the same military orders. Some industry executives expect many of those companies to be acquired or squeezed out.
“From the perspective of Ukrainian companies, most of them can’t develop the infrastructure necessary to sell worldwide,” said Alex Fink, the U.S. CEO of Swarmer. “So they are looking for partners that can give them resources and give them reach.”
The Journal reported that Ukrainian military units procure many of their own drones instead of relying on a centralized procurement process, a structure that has contributed to fragmentation across the industry.
“The barrier to entry for starting a drone company is low as 1,500 combat commands can buy whatever they think works best for them,” said Perry Boyle, CEO of MITS Capital.
Boyle said the barriers to scaling are high because financing is expensive and often depends on obtaining large government contracts. Companies including Swarmer and some owned by MITS are incorporating abroad.
“The United States has the best capital markets in the world…and the largest defense market, so it makes sense to be here,” Prince said.
Several earlier transactions preceded the Swarmer-Ratel deal. Last year, Ukrainian drone maker Vyriy Industries bought a controlling interest in five local defense-technology companies. U.S. investment firm MITS Capital consolidated four Ukrainian defense businesses into a larger company called MITS Industries. A drone company owned by Australian drone executive Francisco Serra-Martins recently bought a small Ukrainian peer.
The Swarmer acquisition connects two types of battlefield technology. Ratel makes unmanned ground vehicles, while Swarmer builds artificial-intelligence software that lets aerial drones coordinate in swarms and attack a target.
Swarmer’s software allows groups of drones to decide which one strikes first and adapt if one runs out of battery. The Journal reported that Swarmer produced the technology behind one of the first known routine uses of swarm technology in combat. The company said the software was first deployed in April 2024 and has completed more than 100,000 combat missions.
Ratel produced street lighting before the war. The company said it won orders accounting for around 37% of the Ukrainian Ministry of Defense budget for unmanned ground vehicles in the first four months of this year. The Journal reported that unmanned ground vehicles have become a vital part of Ukraine’s war effort, including use in 112,000 logistics and evacuation missions since the beginning of this year.
Prince said in an interview that Swarmer wants to continue acquiring and partnering with defense and security technology companies whose products have been tested on the battlefield. Prince, a former Navy SEAL, sold Blackwater, his private security contracting company, in 2010.
The Journal reported that Prince is now expanding his work with defense-technology startups and has become a confidant of President Trump and his advisers. Prince recently formed Vectus Air Defense Systems alongside Swarmer to provide companies, militaries and governments with the design and operation of customized air-defense systems.