CIA-linked investor helped German drone maker enter US market

German drone manufacturer Quantum Systems has revealed that its early entry into the United States market was facilitated by In-Q-Tel (IQT), a venture capital firm linked to the CIA. Co-CEO Sven Kruck said the investor's network helped the company secure work with the Central Intelligence Agency and the Federal Bureau of Investigation.

Kruck noted that this support made it easier to establish a foothold in the US, where the German customer base was comparatively weaker. While the revenue from a reconnaissance contract with US intelligence agencies was modest, it helped build Quantum's credibility. The company is now valued at around $8 billion and is one of Europe's largest defence startups.

The disclosure comes as European governments, particularly Germany, seek to reduce their reliance on Washington following threats by former President Donald Trump to abandon NATO. However, rebuilding Europe's military capabilities without access to US capital and markets remains a significant challenge.

IQT, established by intelligence officials to invest in technologies relevant to US national security, has been expanding its presence in Europe. The firm holds stakes in several companies, including German defence firm Stark, and has backed major startups like Palantir Technologies and Anduril. Jennifer Nelson, IQT's executive vice president for international affairs, described Germany as a "cornerstone of Europe's defence ecosystem" and said the firm is expanding investments in German dual-use innovators.

The growing influence of US investors has raised concerns among European lawmakers. Marie-Agnes Strack-Zimmermann, chair of the European Parliament's security and defence committee, warned that IQT is not a purely financial investor but has a mandate to secure access to the best technologies for US intelligence services. She noted that strategic influence could extend beyond business through investment stakes, observation rights, and access to government contracts.

Kruck acknowledged that American investors understand the ruling administration and can open communication channels. However, he added that IQT had not sent him a "proactive email" in the past two years. He also pointed to Washington's requirement that foreign defence suppliers establish local operations in the US, which is why Quantum has factories and staff there.

European lawmakers have argued that the region needs to do more to channel funding into startups, as Europe currently has no equivalent of IQT.