Top 3 SPAC Targets – Drone/Anti-Drone Defense

After a quiet stretch in the SPAC market, we pressed pause on this column. But with deal flow picking up, targets getting more creative, and sponsors back in hunting mode, it’s the right time to bring back one of our favorites: the Top 3 SPAC Targets. Read on to see who we picked for innovative companies advancing drone and anti-drone technology.

Much of the defense spending conversation in the US has concerned US President Donald Trump’s plans for a Golden Dome air and missile defense umbrella. But, in Europe, the key phrase is the “Drone Wall” as rapidly changing tactics in the Russia-Ukraine war have brought drones to the forefront.

Today, the frontline itself largely exists as a 15-20 mile no man’s land where drones outnumber human forces by either side and any units attempting to move through these areas must remain hidden or have sufficient drone countermeasures to survive.

In recent NATO drills along its eastern flank it has tested out new unit structures that swap out tank companies for dedicated drone teams and it plans to on having drones make up the first line in its new multi-layered defense network along the Russian border. Poland alone plans to spend €2 billion ($2.3 billion) on its span of the border Drone Wall, which occupies a relatively short portion of the total 1,660-mile NATO-Russia Border.

Overall, this means a massive shift in defense spending across Western countries towards drone and anti-drone systems, and there is a race afoot to be ready should the conflict with Russia expand.

Major defense contractors will of course take up a fair portion of that work, but younger independent companies are already carving out their slice. Many even have advantages in their more nimble and AI-driven approaches, especially because unit cost pressures in the drone world are key.

Auterion

Auterion is one such example. It has developed a software suite to pilot multiple drones autonomously that it is working to scale up to full swarms.

Earlier this month, it reported that it successfully conducted the first live-fire test of a single drone operator hitting three different targets simultaneously using Auterion’s Skynode tools. It has already signed a $50 million contract to provide 33,000 autonomous drone kits to Ukraine and in September it raised $130 million in Series B funding.

This round was led by Bessemer Venture Partners, but included a notable $25 million investment by the US Department of Defense’s venture arm. To meet its various clients’ demands, it has expanded from its Arlington, Virginia headquarters to open a base in Munich, Germany and it has personnel on the ground in Ukraine as it tests its capabilities in combat conditions.

The race to perfect drone swarms is particularly acute at the moment. Russia has managed to mass produce long-range drones with enough explosive punch to level a building but that cost only about $35,000 a piece to produce. That provides a conundrum for high-tech Western militaries whose best means of shooting those down are missiles that cost over $1 million each.

Running out that math, if just 1-in-10 of its $35,000 drones hits its mark, it can do significant damage for the cost of $350,000, while the other side potentially spent millions to intercept the other nine. Auterion has so far primarily introduced its capabilities on smaller, shorter-range drones, but it is testing its systems for distances of up to 1,000 miles.

Kvertus

Even closer to the ground in Ukraine is Kvertus, which has emerged as one of the country’s biggest homegrown innovators on the battlefield.

It has developed electronic warfare (EW) systems that disrupt communications between drones and their piloting systems. Some of these are soldier-mounted “drone guns” that can be pointed at a drone to jam it, but in the era of swarms, it has adapted its systems to cover broader areas.

It has now developed autonomous ground drones that can advance into no-man’s land and jam both drone signals and soldier-based communication frequencies in a mobile bubble. These pair with its stationary units in what the company hopes will become Ukraine’s own frontline drone wall of EW disruption, which it calls Atlas.

Atlas is estimated to be a $140 million project in Ukraine and other Western countries are already reportedly interested in its hardware for stretches of their own drone walls. Among the advantages Kvertus has in pitching to Western buyers are its own extensive live fire experience at the front and the generally cheaper production base of Ukraine versus other European or North American markets.

Cohen Circle I already demonstrated that the market will not be spooked by the risk of investing in Ukraine-based companies with its combination with telecom Kyivstar (NASDAQ:KYIV) last year. In fact, the exercise may have demonstrated a proactive investor appetite in being a part of the Ukraine rebuilding story as Kyivstar has consistently traded above $10 and last closed at $12.98, despite the fact Ukrainian infrastructure continues to get hammered by Russian air attacks.

Epirus

On the ground in Ukraine, if a drone manages to dodge EW jamming, the individual soldier’s best defense against a nearby drone has proven to be the old-fashioned shotgun. But, Epirus is working to build on that scatter-gun approach with some more advanced tech involved.

Its Leonidas platform blasts high-powered microwave pulses that can fry the electronics of whole swarms of drones at once. In live-fire testing late last year, it destroyed all 61 drones that approached its platforms, including 49 drones in a single pulse in one instance.

Crucially, Leonidas has proven effective even against drones guided directly by long fiber-optic cables – a type that has become particularly resilient to jamming.

The limitations of these sorts of microwave systems has typically been that they require so much power that they could only be based near significant power sources and so have generally been viewed as protection against high-value targets, but not something nimble enough to roll out into the battlefield.

Epirus has nonetheless partnered with defense contractor General Dynamics to mount Leonidas systems on armored vehicles – both manned and unmanned – and these remain in testing.

In March 2025, the company raised a $250 million Series D round to accelerate production of Leonidas systems to meet all of the testing demand from the US Department of Defense in turn offered the company a $43 million contract for more of that work a few months later.

This built upon contracts worth $17 million and $66 million in the previous two years. In the meantime, the company has also developed hardware and software tools for civilian use in monitoring airspace for smaller threats and appears poised to address both channels simultaneously.

There are currently three SPACs hunting for targets specifically in the aerospace and defense domain, but many others have tipped it as one of their areas of interest. The AI innovations and potential for recurring revenue that these three companies also bring could similarly see them tracked on the radars of many teams out on the hunt.