Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg BusinessWeek
Speaker 1: with Carol Masser and Tim Stenovek on Bloomberg Radio. Well,
Speaker 1: by now we've all seen the dramatic footage from Sunday's
Speaker 1: drone attack Ukraine going after different assets of Russia's military
Speaker 1: deep inside Russian territory. In fact, Carol, by early twenty
Speaker 1: twenty five, this is remarkable. When I was praying for this,
Speaker 1: drones were accounting to sixty to seventy percent of the
Speaker 1: damage and destruction caused to Russian equipment in the war.
Speaker 1: This is according to data from the UK based think tank,
Speaker 1: the Royal United Services Institute.
Speaker 2: You got to say, the way we think about warfare
Speaker 2: has definitely changed dramatically. And this is where Florian Cybel
Speaker 2: comes in. He's a former German Army helicopter pilot, an
Speaker 2: aeronautical engineer who a decade ago founded a company called
Speaker 2: Quantum Systems. It makes multi sensored drones. Now ninety percent
Speaker 2: of its sales go to the military sector, and it's
Speaker 2: provided thousands of drones to Ukraine specifically, And so we're
Speaker 2: kind of dying to talk to him.
Speaker 1: Florence Sibel joins us from Italy. Floyd. Good to have
Speaker 1: you with us. I know there's a little bit of delay.
Speaker 1: We appreciate you taking the time and stand up a
Speaker 1: little late in Europe for us on Bloomberg Business Week Daily.
Speaker 1: First big question that I have for you is, given
Speaker 1: what you know about Sunday's drone attack, were any of
Speaker 1: your drones actually used in that attack?
Speaker 3: So what we know not not as as in a
Speaker 3: way that they would act as being the ultimate weapon.
Speaker 3: All of the drones that we are building are used
Speaker 3: for ISR missions, which is intelligent swans and reconnaissance. So
Speaker 3: that means we are spotting potential targets. So our drones
Speaker 3: have wings, we have flight time of several hours, and
Speaker 3: then we've we fly deep into anti enemy territories so
Speaker 3: we spot and then then then other type of drones
Speaker 3: come in.
Speaker 1: Do your drones ultimately replace the capabilities of aircraft such
Speaker 1: as the U two spyplane.
Speaker 3: Well, you know, there's there's a reason for every asset
Speaker 3: to have and I think you know mostly you know,
Speaker 3: war times are times of change and new doctrines are happening,
Speaker 3: and every war that is coming up will not start
Speaker 3: as as the as the last one. Ended. So you know,
Speaker 3: I'm not really sure if the next war will be
Speaker 3: all about drones, but but what I can say now,
Speaker 3: definitely it's it's a vehicle for Ukraine to to fight
Speaker 3: off Russia because they did not have enough conventional weapons
Speaker 3: to take to take them to the battlefield the way
Speaker 3: Russia would have expected. So, I mean, they were just
Speaker 3: very curious and then using what they have, and and
Speaker 3: and then that's where we are, and you know, this
Speaker 3: is technology changing the way things happen.
Speaker 2: Well, that's where Florine I kind of want to go.
Speaker 2: I think after that drone strike by Ukraine in Russia,
Speaker 2: we had so many conversations in the newsroom about, oh
Speaker 2: my gosh, like warfare just continually to change very dramatically.
Speaker 2: My dad and his three brothers all fought in World
Speaker 2: War World War two, excuse me, a lot of hand
Speaker 2: to man to man combat was just a very different
Speaker 2: type of warfare. You know, we've seen the gamification of warfare.
Speaker 2: How does drones kind of make it safer on one
Speaker 2: level in terms of not putting people at the kind
Speaker 2: of right at the top, you know, the front line,
Speaker 2: if you will, But at the same time make it
Speaker 2: easier for someone to flip a switch and send drones
Speaker 2: into combat.
Speaker 3: You know, you use the word that that describes it
Speaker 3: quite well, which is gamification. You know, it's it's using
Speaker 3: a lot of technology that that that yeah, was spilling
Speaker 3: over from adjacent industries like cell phone technology. You know
Speaker 3: a lot of of the small stuff chips, batteries, cameras
Speaker 3: that that that they weren't just not available a few
Speaker 3: years ago to companies like US. And you know, the
Speaker 3: cell phone industry basically allowed US all to disrupt classical
Speaker 3: defense military companies because now you know, it's available to everybody,
Speaker 3: and and China is very strong in that regard. And
Speaker 3: I think what has to happen now is we need
Speaker 3: to rebuild, specifically in the US, but also in Germany
Speaker 3: and Europe. We need to rebuild the industrial base to
Speaker 3: be capable of producing thousands, ten thousands, one hundred thousands
Speaker 3: of these units. It's not about like a few multi
Speaker 3: hundred million dollar aircraft anymore. It's about large numbers are
Speaker 3: treatable platforms. You know, you want to saturate your adversary.
Speaker 3: And there's companies like Quantum and and you'ill in the
Speaker 3: US that are changing the rules.
Speaker 2: How we play a florin and I am curious there
Speaker 2: is there somebody, an entity, a country that you will
Speaker 2: not sell to.
Speaker 3: Well, you know, in Germany, all of what we do
Speaker 3: is very regulated, and so we have a German Export
Speaker 3: Control author TEA which is called BATHA, which is very
Speaker 3: much in line with NATO and the German governmental official
Speaker 3: position and so we have to we have to fulfill
Speaker 3: these guidelines and guard Yeah, and so it's basically impossible
Speaker 3: for us, you know, from a legal perspective, for example,
Speaker 3: to sell into countries like Iran and Russia and China.
Speaker 3: But also you know then that that that's the legal
Speaker 3: perspective on it. And then we obviously we as the
Speaker 3: founders and we together with our investors, have made it
Speaker 3: very clear that even though if we could sell to
Speaker 3: certain countries, you know, we we we we have to
Speaker 3: feel comfortable with that as as a company. So for example,
Speaker 3: Saudi Arabia is probably one of those those countries that
Speaker 3: would be would be quite obvious that we could sell to,
Speaker 3: but we would probably have a discussion.
Speaker 1: Before you mentioned investors, the company is backed by Peter Till.
Speaker 1: We're going to talk about that in just a minute
Speaker 1: before we get there. I want to talk about the
Speaker 1: opportunity outside of Europe, because for much of the past
Speaker 1: three years you have been selling your drones to Ukraine,
Speaker 1: but you did just open a one hundred and thirty
Speaker 1: five thousand square foot facility here in California. What is
Speaker 1: the opportunity in the US market.
Speaker 3: I think that that was a very smart decision, you know,
Speaker 3: to do that, because the US DUD is the single
Speaker 3: largest Department of Defense in the world, and obviously Europe
Speaker 3: as a total is about the same size, but it's
Speaker 3: very fragmented into twenty six members state countries. So going
Speaker 3: to the US and entering that single biggest market was
Speaker 3: a must do for US. There were a lot of
Speaker 3: people saying that it's going to be hard for a
Speaker 3: non US company to do well, but I think we
Speaker 3: managed to do so. You know, I've spent two years
Speaker 3: of my life in the US, one year in high school,
Speaker 3: one year when I was trained as a professional helicopter
Speaker 3: pilot in Ford Raca, Alabama. So I think I picked
Speaker 3: a little bit up of the way of how America
Speaker 3: works and what's the life over there and how the
Speaker 3: people do business. And so I was very lucky to
Speaker 3: hire an excellent CEO coming from the drone defense industry,
Speaker 3: and he was setting up a Quantum Inc. In more
Speaker 3: Park and he has been doing incredibly well. And so
Speaker 3: I think, you know, it's it's not the US or Europe.
Speaker 3: I think part of our mission is also to in
Speaker 3: these uncertain times of what we see at the moment
Speaker 3: where the US is trying to break away from Europe,
Speaker 3: that economic companies that are on the free market. Yeah,
Speaker 3: act as a glue maybe to together us through these times,
Speaker 3: because you know, the US has been always the biggest
Speaker 3: ally to Europe, especially what is coming up tomorrow D Day,
Speaker 3: and you know, we want to pay back a little
Speaker 3: bit here and so for me it was an that'sural
Speaker 3: thing to go to the US.
Speaker 1: Yeah.
Speaker 2: Okay, So we are Bloomberg and we are always curious
Speaker 2: about interesting startups and as they are growing. And as
Speaker 2: to mentioned, you are backed by Peter Thiale. You just
Speaker 2: raised about one one hundred and eighty one million dollars
Speaker 2: a financing round, valuing you at more than a billion dollars.
Speaker 2: So kind of going into that unicorn status. When is
Speaker 2: the IPO, if there is one, will be Europe will
Speaker 2: be the United States? What will you guys do it.
Speaker 3: It's unclear at the moment. Right now, we're doing very well.
Speaker 3: We're probably going to raise one or two more rounds.
Speaker 3: You know, being on the on the capital market also
Speaker 3: means you're very transparent in what you do. And you know,
Speaker 3: these big government contracts we are after there either zero
Speaker 3: or one, and you know, we don't want to end
Speaker 3: up being the goal of you know, speculative betting on
Speaker 3: us or against us on Wall Street. So I think
Speaker 3: we'll take like one or two more years, one or
Speaker 3: two more financing rounds, and then probably as we are
Speaker 3: a German company, we could look into doing a European
Speaker 3: IPO or as you said, you know New York Stock Exchange,
Speaker 3: probably ten depends a little bit also on how well
Speaker 3: we do with our US facility. As you said, we
Speaker 3: have heavily invested in one hundred and thirty five thousand
Speaker 3: square foot. We need to fill that with business. We
Speaker 3: expect the US government to give us more contracts to
Speaker 3: pay back that we invest so heavily into the US
Speaker 3: now and then it's an open decision. I would say,
Speaker 3: as of today, Well, it's always.
Speaker 2: You know, interesting, we talked so much about here we
Speaker 2: are in San Francisco, you know, the heart of Silicon Valley,
Speaker 2: you know, just nearby innovation that happens around the world.
Speaker 2: You are based in Munich, How does that startup environment
Speaker 2: differ there over Europe, in Munich specifically versus maybe elsewhere
Speaker 2: versus the United States, for example.
Speaker 3: Yeah. So you know, having lived in the in the
Speaker 3: United States and having met a lot of US investors
Speaker 3: in the last six, eight, ten years, you can definitely
Speaker 3: say that the spirit of go big or go home
Speaker 3: or think big is definitely part of Silicon Valley culture.
Speaker 3: Whereas in Germany we have excellent engineering, I would say,
Speaker 3: at very decent price and cost of living. So I
Speaker 3: think there's a there's an advantage for both locations to
Speaker 3: be Obviously, especially in the beginning, I was always a
Speaker 3: little bit cellous looking at the amount and the number
Speaker 3: of companies that are still being founded in the US.
Speaker 3: So it's so much more and bigger than Europe. But
Speaker 3: I think we're catching up. You know what has happened
Speaker 3: in the last two or three years. It's clear for
Speaker 3: us now in Europe that we are on our own.
Speaker 3: We need to reinvent ourselves, we need to define who
Speaker 3: we are, who we want to be in that world,
Speaker 3: you know, and Germany always has been the place of great,
Speaker 3: world leading tech companies. I think we have just not
Speaker 3: had that in the last one or two decades, and
Speaker 3: I think it's time to change that again, and we
Speaker 3: are ready to do that.
Speaker 1: Hey, f Lauren, before we let you go, I know
Speaker 1: you're focused on these UAVs that are really about reconnaissance,
Speaker 1: but I want to pick your brain a little bit
Speaker 1: about the areas of innovation, especially here in the US,
Speaker 1: because back in March, the US government awarded Boeing the
Speaker 1: new Air Force F forty seven stealth fighter jet. There's
Speaker 1: sort of a lot of controversy around this because it's
Speaker 1: still going to be crew based, though the President did
Speaker 1: say we'll be able to fly remotely. Should the US
Speaker 1: right now or should countries be investing in any crewed
Speaker 1: aircraft right now? Or is the future one in your
Speaker 1: view UAV.
Speaker 3: I think the future is unmanned. It's definitely about robotics
Speaker 3: and unmanned systems. The question is how fast will that happen.
Speaker 3: I think the UK has just brought up a new
Speaker 3: defense of policy, they call it twenty forty, saying twenty
Speaker 3: percent will be or should be assets classical assets like
Speaker 3: there used to be so man fighter jets. Forty percent
Speaker 3: ISR and intelligence and forty percent unmanned dri strike capability.
Speaker 3: So I think it's it's not either or I think
Speaker 3: it's a combination both, but definitely more than we used
Speaker 3: to see. And you know, I don't know if the
Speaker 3: forty seven is going to be man or unmanned. Probably
Speaker 3: these high value assets will still be manned, but they
Speaker 3: will definitely not fly into enemy territory. I think they
Speaker 3: have a stand of capability extreme long range radar range
Speaker 3: because they're so super expensive. But let's see, you know,
Speaker 3: it's changing. Maybe in the next war will be not
Speaker 3: fought on drones. Maybe it's in space.
Speaker 2: Maybe we won't have a war, which sorry for you,
Speaker 2: but it would make me make agricultural drones too.
Speaker 1: It's just that, Yes, it's just the mix has been
Speaker 1: really military focused over the last it would be. Now
Speaker 1: you're asking for a lot, Carla Florian, thanks for joining us.
Speaker 1: It's Laurian cybel CEO of Quantum Systems, joining us from
Speaker 1: Italy just now. He's also featured in Business Weeks One
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