Hadrien Canter, CEO and Co-founder of Alta Ares: BREAKING: Alta Ares just raised $50m

0:00Hadrien Canter:Hello and welcome back to Scaling Europe Show. I'm Sir George. So today we have got an amazing guest with an amazing announcement. The company is Alta Aries, an amazing defense company that has just raised$50 million. Adrian, take it away. Thank you. My name is Adrian. I'm the CEO and co-founder of Alta Aries. We're a defense company operating in Europe, in Middle East and in Asia. And what is it that you've built? we provide like air defense solutions so everything that goes from the software to the hardware passing by also like the maintenance the training of the operators to shoot down two particular objects which are like our main targets the first one is the Shahid 136 and the other one is the KH-101 cruise missile which are like the two main targets as we try to intercept as much as we can and it's a very challenging position because air defense is there's little room for failure and if you can succeed like eight times and if you fail only twice it's a mission failure so it's a very challenging company and very challenging environment to work in but I think it's what it has to take is very rewarding so I'm very lucky to be surrounded with like an amazing team, but also like great investors that trust in what we've got.

1:20Hadrien Canter:And so maybe you set the scene a bit for people who are not so close to defence, but I guess in air defence, you have this very strange environment where the drones are very, very cheap and you can throw quite a lot of them out. Shooting them down has traditionally been quite expensive, I guess, and quite hard. Can you set the scene, I guess, about why this is so important and what's changed, I guess, maybe like to five or 10 years ago? Okay, so there is definitely right now what we call asymmetric warfare. And the NATO air defense system were built based on the concept that NATO countries would have what we call the air superiority, that will always master the air.

2:04So in this case, we would develop a few anti-air systems that would be very expensive to intercept missiles which are really hard to intercept. So in this context, it would be like a small system to intercept a small number of targets. But the thing is that the Russians and Iranians and maybe tomorrow like other countries like China and something like that will realize that actually quantity is a quality in itself. and if you send a mass amount of those kind of Shahid drones, they also can be called cheap cruise missiles, you can overcome the traditional air defense system. And in this context, the system that we used to have wouldn't be matching the high volume of targets to threats.

2:59So in this context, we have to find new ways to intercept this kind of target because they are cheaper. So we need also to find cheaper ways to do so. And this is a very complex mission that can be divided in three parts, detection, identification, and interception.

3:16Hadrien Canter:And I guess to that point, you have a combination of both software and hardware, right? Right. Which is quite... And that's quite unusual in itself. I think Helsing is very much better in the software layer. You're doing both. Why do you think that's important? them. So we are not a drone company, we're not an AI company, we're not a data company, we are what we call a capacity provider. So it means that in the three steps I mentioned to you, detection, identification, and interception, there is like a software part playing a big role, but also a hardware. And both doesn't go without the other one.

3:52So I'll give you an example for like the detection part, you need actually a very good data fusion software. So it's like AI, it's like pure like what we call like recurrent neural networks algorithms that plays with like machine learning algorithms and common filters to basically like treat all the data like the all the radar data and then like send the interceptor autonomously into what we call a kill zone so that that's kind of the identification part of the mission where the rgb camera or the infrared camera are looking for a small pixel so that's like what we we put like some software in the in the interceptor to like exercise like a computer vision AI model.

4:33They will be like looking for a small pixel. And then when it locks a pixel with our AI software and board, it like send command to the flight controller to go left, to go right, to go up, to go down and to intercept the target. And that's the last part of the mission. And in each part, as you can see, the hubbler itself would be like meaningless. We thought they're very good like embedded software, but also like ground software. and all this obviously is also like being like the efficiency is being improved with the AI because you could do all this mission like without any AI algorithm but you reduce significantly the chance of interception.

5:08That's why in this context we don't like to call ourselves like a drone company or AI company. We're a capacity provider that provides to the end user all the right tools to succeed in this mission from the detection to the interception passing by the identification.

5:25Hadrien Canter:And how did you get involved in all of this? You know, I guess you don't have the traditional background of a founder of this type of company. I read that you were a lawyer, a humanitarian worker. Can you talk a bit about the founding story? So I had like a legal background. I was like a lawyer in France, in the US a bit. Then I had like most like operational background where I was very involved like in the Middle East and some in Eastern Ukraine because I speak Ukrainian and Russian because I live in both countries, both in Russian and Ukraine. I was developing a very strong desire to be more involved in Ukraine because what is at stake right now is the defense of our continent, of Europe.

6:16And I feel that Ukrainians are fighting very hard for values that they cherish. and those values are mine as well. It's the idea that they can choose with which alliance they want to build in the future with the EU or NATO. And I think that this kind of freedom of the people that I think is very admirable. And in this context, me, but not only me, it's like the co-founders of the company, we decided to build this kind of mission critical company that could have an impact on something that is very contemporary because the threat that the Ukrainians are facing we face exactly the same thing in the Middle East, but also in NATO countries such as Romania, but also Poland, which are being targeted by those Russian drones, you know, and it's, I think, a collective matter that a lot of companies right now in Europe are trying to work on because we are building, as we speak, the future of European defense security.

7:13And it has to be like a collective work from London to Kharkiv, passing by Paris, Athens but also the Nordics and that's only in this configuration that we can be very sovereign and don't require the help of the US that basically don't want to give us the help because GDV was very crystal clear at the Munich Security Conference when he made his speech saying like Europeans take your destiny in your hands and please manage your security yourself and I think that's it should be seen as a unique opportunity to build this very strong European defense and where our company wants to play a role alongside our deployment in Ukraine, in France, in the Baltics and in other countries.

7:58Hadrien Canter:Do you think Europe is taking this threat seriously? I think they are. They are taking this very seriously, but not only Europe, but also NATO. And I think that the success that we had was also thanks to NATO. We won a year ago a big challenge from NATO that they organized in Poland. it's like a center called Jatech where basically they have Ukrainian officers and NATO officers trying to understand what are the main threats of today's war and what could be the main threat in tomorrow's war and that's how we've been heavily supported by NATO because in NATO there is some different military branch but also the innovation and all in charge of the standardization of NATO like norms and into like NATO because like the US is slightly getting like less involved, like more and more European general are getting involved and it's a unique way to also push our like European sovereign agenda through NATO.

8:59So I think that NATO and the EU are working like quite hands in hand and I think they are like putting a lot of means like for us, for the European ecosystem to develop like technology that are like effective on the ground in Ukraine, but also that I'm being able to be NATO interoperable into other architecture of what we call radar air picture. I can put my system in any other NATO environment and I think that's really critical.

9:29Hadrien Canter:And you've seen success, I guess. You're being deployed in Ukraine. You're seeing success in there. I read that I think it's like 20 percentage points higher than without your software. Is that right? Could you talk a bit about where you deployed the success you're seeing? So, as I was mentioning, the software part is key in this mission. And we had successes, but we also had many failures. And it's also something that I think I need to emphasize on, that before our software and the hardware worked, how many times we did, we crashed our hardware, all the software that didn't work. And we stayed and we iterated more and more to something that was convincing for the end user to keep using it.

10:19And we're getting how we could emphasize on this fact that the air defense mission is a very tough one, where the cognitive load of the operator is very heavy. you know and i would give you like an example you have to imagine yourself in what we call like a potato field in the middle of ukraine it's like 2 a.m in the night you take your fifth coffee that doesn't wake you up anymore and when finally like the detection part of the mission like spots a target you run you put on the on the on the launching pod like a interceptor you you click the bottom to send interceptor into this kill zone and it's usually like 10 clicks away and the video feed is very blurry and you're tired like you haven't slept for some time and obviously like you can see like there's a lot of pressure adrenaline stress you know there is also like some drone flying above you so all this increase the risk of human errors you know and if we can put like more software and more automatization it increases the chance of interception and that's concretely how we are helping today partners here in ukraine where i am right now as we speak but also partners in other countries in Eastern Europe, but also in the Middle East.

11:38Hadrien Canter:What's it like being in Ukraine at the moment? It feels like being at the right time, at the right place with the right person. I wouldn't have any defense companies and not being present in Ukraine. For me, it's like an antagonist thing. It goes together. If you want to work in defense, European defense, you need to have an office in Ukraine. And that's where we see the most innovative companies in Europe. They have like presence here and we see them made away on the field. You know, it's like very pleasant to see that we are not alone because it's also a psychological war where I think the Ukrainians, but also like us Europeans working here.

12:21We like to see our German colleagues flying just above us because we are not alone, you know, and it's like a tough mission because the Russians are not alone. and same as the Iranians are not alone, you know, and I think that we need to understand that some countries doesn't want our way of life to continue, I believe, you know, and that's why I think this war here, but also like this mission that we do is critical because we fight, I guess, for the future of our continent. And if tomorrow, like Ukraine loses a war, Europe, as we know, it will be like very different and because then we will have the Baltics and some other countries.

13:00So I think that being here makes me closer for my team here. We have an engineer here as well, but also closer to the end user to understand what's the reality of the world because it changes every month. There is something new happening and you have to adapt very fast.

13:20Hadrien Canter:You talk about the mission, how important it is. It's very different. I find it very different talking to founders like yourselves where the mission is really saving lives, saving Ukraine, maintaining the standard of living and our way in life in Europe, as I do to sort of like a consumer AI company. Do you think having that additional pressure is a good thing and it kind of makes you work harder, makes you think smarter, gives you a mission and something to fight for? Or do you think that maybe it makes it harder for you because you sort of carry this weight of trying to achieve this amazing thing and protect Europe?

13:55well first of all i'm not the one like um protecting life since like this like the the soldiers who are using our product but also like all my engineering team working on it i just like had the vision and i trust my team to the job but i think that it's um a sort of weight especially where it doesn't work and i faced like many situations where like we were sending like the interceptor and and and we were like shooting down one one shahid but actually there were like 10 others coming and we ran out of interceptors or like one of them like didn't work and you feel like very frustrated so it's like psychologically speaking it's very it's very like um harsh uh but at the same time if everyone would do the same that's like part of like that's how like ukraine has been so successful actually in building this unique defense ecosystem because everyone wants to play a role in this matter.

14:50And in this context, I think that it also allows us to attract very strong profiles. And we're like engineers that used to work at Andrew Real and they were like two years at Andrew Real and told me like Adrian we'd like more operational deployments in two months at Altais than in two years at Andrew Real. Same guys from Palantir that were in London office in Palantir and said, okay, we had a very harsh moment when we realized that Palantir was serving this interest of the US, which are maybe aligned with the interest of Europe. So us as European engineers, we want to work for companies that are being aligned with European values but also European diplomacy.

15:32And I think that's also, it's a pressure. There is pros and cons, obviously, but right now I wouldn't do this company if the cons would outweigh the pros. But yeah.

15:44Hadrien Canter:And how important do you think resilience is? I don't mean resilience in terms of the industry. I mean, you talked about the failures and how many failures you have to go through. And again, this is not software where you can just ship a product. You know, it's like you're missing things, right? You're missing drones. And if things don't work, that must be really tough, right? Like how important do you think is it for you to not just have resilience, but to build a team that can just get on with failure and try again? I think it's a state of mind. It's also something that I've shared with the investors that we had in this round that are like really believe that a success was not built on nothing.

16:28And you need to fail like many times before you achieve a success. and I think that there's a lot of very inspiring figures, such as SpaceX, at the beginning didn't work pretty well, and obviously right now they're very performative, and I think that's really cool. But I think it's really related also to the culture of the company, that we have a lot of motors in the company, like doing whatever it takes, say it, solve it, and there is like really this culture that we want to put into like engineers' mind that either when they face something, they have to express it, you know, and we have to solve it collectively.

17:10And I think that's why we try to create this like very strong team here in Ukraine, in Paris, in the US, but also in the Middle East that works together around like one mission. And that's why we kind of created this structure, what we call like capability first structure, where we're like organization by capabilities like from different products we have and like these like all team from the hardware team to the software team passing by the AI team are working together to solve like a pain point and doing whatever it takes to solve it.

17:44Hadrien Canter:And I'm conscious we haven't got much time and we've barely talked about the round but you've just raised the sheath around 50 million euros. You've raised it from Estuary Capital, Cherry Ventures among others. What I thought was particularly interesting was that Estuary Capital, Cherry Ventures are not typical defense I think this is both of their first defense-focused investments. What did they find compelling? How were you able to convince them to come on board, given this isn't an industry they typically invest in? Well, I can't really talk about it. In their name, I can tell you what I believe attracted them.

18:19Like AirStreet led the realm. AirStreet is like an AI-first VC, solo GP, one of the biggest solo GP in Europe. And in this context, they made like Nathan Benesh, who is the sole GP of Airskate, made such a in-depth due diligence. He talked with the different engineers and he really understood that basically we're one of the few companies doing truly AI in defense on a daily basis. Like on a daily basis, I have like every morning when I wake up, like this report about like how many like Shahid we took down or like how many we failed to shoot down and why it didn't work. And, you know, like, and I was sharing with them, like with Cherry, with OTB Ventures, a Polish VC as well, Harpoon VC, a US VC as well, and Airstream, like all the video feed, you know, like saying, okay, like, look, this morning we did that and this didn't work.

19:10And basically I saw them as operating partners. It's like, VCs are not like here, like maybe like for the money, but also like, also to help make a true success story out of our company. And they were like, really like hands-on during the diligence process and had the feeling whenever the first time we met with those different VCs, right away they understood how critical it was the mission that we are doing right now and how they could be helpful by attracting talent. And right away they decided to send us some resume about really good people that they knew from the network. And they like the mission.

19:43Same as our engineer are leaving Palantir to work for us. Those investors, they also like the mission because it's a good one. And I think that... And also we have a very like product that is a lot of perspective. So yeah, we are very lucky to have those kind of investors and I'm very thankful to them to allow this like a massive round of 50 million euros.

20:04Hadrien Canter:Well, look, it's amazing news. Congratulations to you and the team and I imagine it's just back to work and more to be done. But thank you for taking the time and congratulations. Thank you so much. Have a great day.

20:23Thank you.