Melbourne defence technology company Arkeus has raised a $25 million (about US$18 million) Series A led by QIC Ventures to scale manufacturing of its AI-powered sensors, which help drones see through smoke, haze and camouflage. The May 2026 round values the company at about $100 million, according to Forbes Australia and Dealroom.
The raise comes as militaries shift towards autonomous systems that need to find targets without a human scanning every frame of video. Arkeus has found its biggest market overseas: around 80% of its revenue now comes from the United States, up from roughly 10% a year earlier, according to the company.
How it works
Arkeus builds hyperspectral imaging sensors with onboard AI. Hyperspectral sensing reads light across many wavelengths well beyond what the human eye can see, and the AI interprets that data in real time so a drone or aircraft can detect and track objects hidden in poor visibility.
The company says its system can detect targets up to 8 times further than existing optical systems in degraded conditions, a result it reports from competitive evaluations with the US Department of Defense against payloads already flying on military drones.
Customers at home and abroad
Arkeus says its systems are integrated with drones from AeroVironment, Textron, Tekever and Boeing subsidiary Insitu, and it has won US defence contracts, SmartCompany reported. In Australia, it secured the Australian Army’s Wide Area Airborne Surveillance Program in November 2025.
The company was founded in 2020 in a one-car garage in Melbourne by chief executive Simon Olsen and aerospace engineer Dr Jonathan Nebauer. According to Startup Daily, the idea came after they watched drone operators struggle with false positives while hunting drug operations in Colombia.
The raise
New investors R+VC, Folklore Ventures and Dyne Ventures joined existing backers Main Sequence, Salus Ventures and Steve Baxter’s Beaten Zone Venture Partners. Arkeus previously raised a $4.45 million seed round in late 2023 and a $5 million follow-on in March 2025, SmartCompany reported.
The money will fund a manufacturing and sustainment facility in Queensland, alongside production for the US market, with headquarters remaining in Melbourne. “This capital allows us to scale manufacturing and get capability into the field faster,” Olsen said, as reported by SmartCompany.
Jack’s take
The revenue split is the story for me. Most Australian defence startups spend years waiting on a local contract, and Arkeus went and won in the US first, one of the hardest defence markets in the world to crack. That makes it a genuine exporter, not just a promising local company.