Melbourne's Arkeus raises $25M at $100M valuation for AI drone sensing tech
What's the deal? Arkeus, a Melbourne-founded defence-tech startup, has raised $25 million in a Series A round led by QIC. The raise values the company at $100 million — more than seven times its valuation from a seed round two years ago.
The round also drew participation from R+VC, Folklore Ventures, and DYNE Ventures, with continued backing from Main Sequence Ventures, Salus Ventures, and Beaten Zone.
Arkeus builds what it calls "eyes and brain" sensing systems for autonomous craft. Its core technology — a "hyperspectral optical radar" — fuses signals from across the electromagnetic spectrum, from ultraviolet through infrared, to see through smoke, haze, dust, and humidity. AI then analyses the data in seconds.
The company says its system can detect targets up to eight times further than existing military optical systems in degraded conditions — all packed into a 4kg cube.
Why now? The technology was born from co-founder Simon Olsen's experience in the Colombian jungle in 2016, watching US Air Force drone operators drown in thousands of false positives as their software struggled to see through mist and foliage. "Software couldn't find what the sensors can't see," Olsen told Forbes Australia.
His colleague, aerospace engineer Dr Jonathan Nebauer, proposed a fix: hyperspectral sensing miniaturised from half-a-boardroom-table size into something a drone could carry. Together they built Arkeus.
The company is already deployed with the Australian Department of Defence and various US defence and civil defence agencies, including at the Mexican border. It plans to use the fresh capital to manufacture in Queensland and the US.
What could go wrong? Defence-tech startups face notoriously long procurement cycles and complex export controls, particularly when selling into both Australian and US military markets simultaneously. Scaling manufacturing across two countries adds operational complexity, and the sector's reliance on government contracts can make revenue lumpy and unpredictable.
The signal: QIC, better known for backing bioventures and large-scale infrastructure, leading a defence-tech Series A is notable in itself — it suggests Australian institutional capital is warming to the sector in ways that mirror the US and European defence-tech funding booms. Arkeus's sevenfold valuation jump in two years tracks a broader pattern of accelerating cheque sizes for startups solving sensor and autonomy bottlenecks, where military demand is outpacing the supply of field-ready technology.
Read more: forbes.com.au
