‘A disaster for Stark’: Peter Thiel’s drone startup falters in key military trials

Stark, a drone startup backed by Peter Thiel, has failed in tests with the British and German armed forces.

The Berlin-based startup, supported by Palantir founder Peter Thiel, failed in two separate trials with the British and German militaries. These trials were described as a “disaster” and have raised questions about the company’s bold public statements and its hopes of winning government contracts.

Attack drones produced by Stark failed to hit a single target in four attempts during two separate exercises this month: one with the British army in Kenya and another with the German army near the town of Munster in Lower Saxony.

During the German test, one of the unmanned Virtus drones lost control and crashed into a wooded area. In a separate incident in Kenya, following an attack attempt, a drone’s battery caught fire upon impact.

“This was a disaster for Stark,” said a person familiar with the German trial. “They oversold their capabilities and are now paying the price for it.”

Stark, which plans to open a factory in Swindon, England, in November, said in a statement, “We have crashed not once or twice, but hundreds of times. This is how we test, develop, and ultimately continue to deliver defense technologies like Virtus to the front lines in Ukraine.”

Stark was founded just 15 months ago but has grown rapidly. The startup has received backing not only from Thiel’s investment firm but also from Silicon Valley venture capital giant Sequoia Capital and the NATO Innovation Fund.

The German company was recently provisionally selected as one of the winners of three contracts, each worth €300 million, to supply armed autonomous drones to the German armed forces, the Bundeswehr. However, a person familiar with the plan told the Financial Times (FT) that this was contingent on performance in ongoing trials and parliamentary approval.

Earlier this month, the company, valued at $500 million in its latest funding round, introduced its new CEO, Uwe Horstmann. Horstmann is also a partner at Project A, a venture capital firm that is a backer of Stark, and he played a role in the company’s growth after its founding last year.

As unmanned aerial vehicles have proven to play a decisive role in the war in Ukraine, European governments have begun investing billions of euros in defense technologies. German Defense Minister Boris Pistorius stated this month that Germany alone will invest €10 billion in unmanned aerial vehicles in the coming years. But the rapid increase in interest and money has also brought concerns that a bubble could be forming in the drone sector.

At the time of his appointment to lead Stark, Horstmann was praising the performance of the company’s Virtus drone. “We are receiving feedback that Virtus is among the top performers,” he told German broadcaster ntv before the recent trials. He also told the FT that his company would be ready to produce “thousands” of drones starting in January 2026.

A few days later, at a base in Kenya, Stark joined two other German startups, Helsing and ARX Robotics, for tests. The exercise, named “Haraka Storm,” was designed to test, train, and evaluate kamikaze drones.

According to two people familiar with the tests, the company told soldiers during the trial that it was only willing to crash two of its four drones. The weapons were to be used without warheads and would instead be flown into their targets to simulate a real attack. Stark did not allow soldiers to operate them.

Stark’s website states that the Virtus drone can “track and hit targets 100 km away” and “transition from a steady cruising speed of 120 km/h to rapid dives of up to 250 km/h.”

When the company attempted two attacks in Kenya, both failed. In one attempt, the drone fell to the ground in a burning heap after its battery caught fire.

According to a person familiar with the exercise, Stark also gave some soldiers a special “challenge coin” as a souvenir of the trip. The coin featured the company logo on a black and white map of Europe that did not include the British Isles.

Stark’s competitor, Helsing, despite facing harsh criticism for its previous model, the HF-1, carried out five successful attacks with its new model, the HX-2. ARX Robotics, which produces small unmanned vehicles and software systems for battlefield use, helped Helsing’s drones reach their targets using its Mithra technology.

A British army spokesperson said: “The British army regularly tests and evaluates the latest technologies to contribute to the nation’s defense and the army’s modernization. In this context, we work with various suppliers and companies to assess their capabilities and suitability for integration with the British Army.”

A Western official familiar with the exercise said there was no “either/or” choice being made between Stark and Helsing, adding, “This was a trial. The army wants all industry partners to play a role because it is advantageous for us.”

In Germany, according to three people with knowledge of the details, Stark conducted a separate trial with the country’s armed forces. In front of numerous soldiers and defense industry representatives, both of its two attack attempts failed, and one of the drones could not be recovered after crashing. Helsing, which participated in the same trial, hit its targets 17 times, according to two people.

One of Stark’s financial backers, who wished to remain anonymous, emphasized the importance of “testing and experimentation” as “necessary elements for building and innovating on the frontier.”