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Agile and innovative, the Estonian DefenceTech ecosystem is also acquiring a taste for scale. Frankenburg Technologies, an Estonian defence startup, has closed a €30M Series A funding round to scale production of its Mark I interceptor missile — a low-cost system built specifically to counter mass-produced attack drones.
The round was led by Plural, the operator-led investment platform co-founded by Wise’s Taavet Hinrikus, with €7 million contributed by SmartCap’s Defence Fund — an Estonian state-backed vehicle. The raise brings Frankenburg’s total capital to €40M.
A new Defence name in town
Frankenburg was founded in 2024 by serial entrepreneurs Taavi Madiberk and Marko Virkebau, with the idea that traditional defence procurement was fundamentally mismatched to the pace of modern conflict. The company is led by CEO Kusti Salm, formerly the permanent secretary at Estonia’s Ministry of Defence. So what exactly they are solving?
Modern aerial warfare has created a stark economic imbalance: large-scale aerial threats, from low-cost unmanned systems to cruise-missile-like targets, can be produced quickly and in large numbers, while interceptors are often expensive, slow to manufacture, and available only in limited quantities.
Frankenburg’s pitch is straightforward — if it costs a million dollars to shoot down a drone that cost a few thousand to build, the defender will eventually run out of money and missiles.
Their current flagship product, Mark I, is described as the world’s first short-range air-defence missile designed from the outset for mass production, built entirely from commercially available components. The company took it from concept to successful testing in 13 months — an endeavour that would typically take over a decade in conventional defence programmes.
The new capital will be used to establish two EU-based mass-production units, secure long-lead components and early production stock, establish rocket motor and warhead production capability within the EU, and expand engineering, safety, quality, and export-control teams.
The target is a capacity of more than 100 missiles per day at each site. Estonia’s Minister of Economy and Industry, Erkki Keldo, noted that Frankenburg plans to establish production capacity at the Pärnu defence industry park. The company has also established ties with manufacturers in Korea and the UK.
