Simmons Sitrep: December 2025

Strategic Direction & Policy Signals

1. The UK Ministry of Defence (MOD) has launched the new Military Intelligence Services (MIS), consolidating all Defence intelligence units (including those from the Royal Navy, British Army, Royal Air Force, UK Space Command, and Permanent Joint Headquarters) into a single organisation for the first time. This major reform, recommended by the Strategic Defence Review, aims to improve the speed and efficiency of intelligence gathering, analysis, and sharing across the Armed Forces, enhancing the UK’s ability to anticipate and respond to evolving threats. Alongside MIS, the new Defence Counter-Intelligence Unit (DCIU) has been established to unify and strengthen counter-intelligence efforts, following a significant rise in hostile activity against the MOD. (link)

2. The UK and Germany have entered into a £52 million contract for the joint procurement of the RCH 155 system (fitted to the Boxer platform) from KNDS Deutschland. The UK will receive one early capability demonstrator platform for joint testing with Germany. The RCH 155 is a solution to the UK’s Mobile Fires Platform requirement, replacing the AS90 platform, of which the Archer platform is a short-term replacement. (link)

3. US Congress has passed the National Defense Authorization Act (NDAA), authorising $901 billion in defence spending, $8 billion above the White House’s initial request. The NDAA allocates $162 billion for procurement and $146 billion for research, development, test, and evaluation, with a focus on advanced technologies such as hypersonics, AI, quantum computing, autonomous systems, and space-based capabilities. The NDAA also introduces acquisition reforms to accelerate adoption of commercial technologies and streamline compliance for small businesses. Key procurement authorisations include $26 billion for shipbuilding, over $38 billion for aircraft development, and more than $25 billion for munitions, alongside measures to strengthen the US drone and counter-drone industrial base. The US President has signed the NDAA into law. (link)

4. The PRC has imposed sanctions on 20 US defence companies and 10 executives following the announcement that the US intends to sell over $10 billion of arms to Taiwan. The companies include Northrop Grumman Systems Corporation, L3Harris Maritime Services and Boeing, whose assets in the PRC will be frozen, and all PRC organisations and individuals will be prohibited from transacting with them. (link)

5. The Australian government has approved plans for Hanwha of South Korea to increase its stake in the Australian shipbuilder, Austal, to 19% despite concerns that Hanwha could carve out Austal’s US operations and be contrary to national interests of maintaining Australian owned shipbuilding. However, it has been reported that Hanwha’s involvement in Austal will be subject to strict conditions and could bring South Korean expertise to the Australian shipbuilding industry. (link)

Legal, Regulatory & Ethical Updates

1. The UK has joined France, Germany and Spain in closer integration of defence export control by acceding to the Agreement on Defence Export Controls. The UK Government has reported that this will increase opportunities for cooperation and trade for the defence sector by reducing administrative burdens and increasing access, especially in relation to national projects with multi-national supply chains. (link)

2. The US Federal Communications Commission (FCC) has imposed a ban on the import, marketing and sale of all drones and critical components manufactured in foreign countries, specifically targeting leading Chinese drone makers SZ DJI Technology and Autel Robotics, following a White House-led assessment that such equipment poses “unacceptable risks” to national security. The ban, which does not apply to drones already in use or on store shelves, is the culmination of years of US government concern over potential data access and manipulation by the Chinese state. It follows increased scrutiny of Chinese supply chains, including allegations of forced labour. In response, the Pentagon’s $1.1 billion “Drone Dominance” programme aims to accelerate the development of US-made drones. (link)

Industry Updates

1. Quantum Systems, a German drone manufacturer, has announced the formation of Quantum Frontline Industries, as part of a €100 million joint venture with Ukraine’s Frontline Robotics. The JV aims to mass-produce Ukrainian drones in Europe and is the first deal signed under the ‘Build with Ukraine’ initiative launched in June 2025. This partnership follows a series of milestones, including the delivery of Vector systems to Ukraine in 2022, the opening of a support centre in 2023, and the start of full-scale production in Ukraine in 2024. (link)

2. Neros Technologies, a US-based FPV drone manufacturer, has partnered with Israel’s Kela Technologies to develop a fibre-optic drone variant of Neros’ Archer platform, designed for use in highly contested electronic warfare environments. The collaboration combines Neros’ China-free drone technology with Kela’s battle-tested fibre-optic cables, enabling un-jammable, manual control over distances of up to 5km, with longer-range variants in development. The partnership aims to provide frontline operators with alternatives to radio-controlled drones. (link)

3. CACI International has announced a $2.6 billion acquisition of ARKA Group, a space technology provider, from funds managed by Blackstone Tactical Opportunities, expanding CACI’s footprint in national security and space-based intelligence. The acquisition is expected to close in the third quarter of FY 2026. (link)

Capital & Investment Watch

1. Vatn Systems closes a $60 million Series A led by BVVC, with participation from Hanwha, Airbus Ventures, Dauntless Ventures, Decisive Point Ventures, and Lockheed Martin Ventures, bringing its total capital raised to over $73 million. The funds will support the productisation and scaled production of Vatn’s AUVs, including the Skelmir S6 and S12, and will facilitate the move to a new manufacturing facility in Rhode Island. (link) 

2. Pryzm, an AI-powered government market intelligence platform, has raised $12.2 million in seed funding led by Andreessen Horowitz, bringing its total seed capital to $15.2 million. Pryzm’s software helps clients navigate federal government contracting by tracking contacts, visualising bureaucracy, and managing pipelines, with customers including major defence and government contractors. (link)

3. Castelion has raised $350 million in a Series B funding round led by Altimeter Capital and Lightspeed Venture Partners, bringing its total funding to $464 million. Castelion aims to deliver affordable, scalable hypersonic missile capabilities for US defence, with recent contracts to integrate Blackbeard onto Army and Navy platforms and plans to launch a second hypersonic product line. (link)

4. Zerophase has raised €5.8 million in a seed round led by Blue Yard Capital. The funding will support further development and scaled production of Zerophase’s modular, upgradeable data link system, designed to maintain robust drone communications in heavily contested electronic warfare environments. Zerophase’s technology, already deployed in approximately 1,000 units, supporting 10,000 missions in Ukraine, enables secure transmission of video, telemetry, and command and control data, and is being integrated by major German drone manufacturers. The company plans to expand into broader electronic warfare applications, including detection and jamming capabilities. (link)

5. Starfighters Space has raised $40 million in connection with its public listing on the NYSE American, becoming the first space company to transition from a Regulation A Tier 2 offering to a NYSE listing. The company will use the capital to fund research and development, scale operations, and advance its STARLAUNCH I and STARLAUNCH II programmes, which are designed for sub-orbital launches of small satellites and payloads using a fleet of modified F-104 supersonic aircraft capable of carrying payloads up to altitudes of 45,000 feet for air launch to space. (link)

International Investment Fund Symposium

1. Join us for our 4th International Investment Fund Symposium in London on 28 January 2026. The programme includes keynote speakers, networking opportunities and interactive panel discussions, including a session on private capital and defence. Please register below to save your place. We look forward to seeing you there.