Defense Firms Eye Gulf Deals Amid Iran Tensions

European defense technology startups are experiencing a surge in commercial discussions with Middle Eastern governments following recent escalations in regional conflict. Executive leaders from these companies report a significant uptick in interest from Gulf states, driven by an urgent need to enhance capabilities against increasingly sophisticated drone and missile threats.

Data from the Center for Strategic and International Studies indicates a substantial increase in aerial attacks originating from Iran targeting its neighbors. The United Arab Emirates, Saudi Arabia, Bahrain, and Kuwait have been particularly affected, facing thousands of drone and missile firings. This volatile geopolitical landscape has created a fertile ground for advanced defense solutions.

European startups specializing in defense technologies, particularly in the realm of drone and missile interception systems, are now finding themselves at the forefront of urgent procurement discussions with Gulf nations. Several companies are actively expanding their regional presence and workforce to meet the burgeoning demand for their cutting-edge systems.

Recently, the United Kingdom government orchestrated a high-level meeting bringing together prominent defense firms with ambassadors and defense attachés representing Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates, Iraq, and Jordan. The primary objective was to explore avenues for rapid deployment of new defensive equipment and technologies to allied nations grappling with Iranian drone and missile attacks.

Among the participating companies were Frankenburg Technologies, an Estonia-based startup developing advanced interceptor missiles for drones; Cambridge Aerospace, a UK firm specializing in drone and missile interception technology; and Uforce, a Ukrainian-UK startup focused on autonomous systems.

Kusti Salm, CEO of Frankenburg Technologies, shared with our news outlet that commercial dialogues with Gulf states have intensified significantly since the recent onset of conflict. Frankenburg is currently engaged in discussions with several Middle Eastern governments regarding the acquisition of its technology, though specific details remain confidential. Salm indicated that the potential order volume from Gulf states could be in the thousands of missiles, and Frankenburg is working closely with these partners to ensure an expedited delivery schedule to meet critical operational needs.

Cambridge Aerospace, which has recently unveiled two new missile and drone interceptor products, has positioned one as a cost-effective and scalable solution for cruise missiles and large drones, while the other is designed for higher-speed and higher-value targets. The company has not commented on specific commercial engagements in the Middle East or its fundraising strategies when approached by our news team. Earlier this month, reports suggested the company was in advanced talks to secure new funding at a valuation exceeding $1 billion, underscoring the growing investor confidence in the defense tech sector.

Max Buchan, CEO of Valarian, a UK-based startup providing digital infrastructure for sensitive applications, including defense, noted a marked increase in commercial discussions with Gulf states since the commencement of the conflict. Prior to this period, Valarian did not hold defense contracts with these nations.

Oleg Rogynskyy, CEO of Uforce, described the interest from Gulf states in their defense technologies as “skyrocketing” since the beginning of the recent conflict. Uforce is actively developing a portfolio of defense solutions, encompassing counter-uncrewed aerial systems (C-UAS), maritime and strike drones, and advanced battlefield software. Rogynskyy highlighted extensive inbound interest, with Gulf nations seeking to understand how to implement large-scale, unmanned operations, including interception, de-mining, strike missions, future convoy and escort operations, and maritime patrol capabilities.

Uforce has been providing critical defense technology for Ukrainian operations in the Black Sea. Rogynskyy emphasized that the operational, tactical, and strategic lessons learned from this theater are directly transferable to the current situation concerning Iran. He drew parallels between the current Iranian approach to maritime denial through mines and missiles and Russia’s initial efforts to disrupt Ukrainian grain exports. Uforce recently secured $50 million in funding at a valuation exceeding $1 billion. Driven by the escalating demand stemming from the Iran conflict, the company is now strategically planning to establish a permanent team in the Middle East. While a Ukrainian delegation is currently operating in the region, Uforce aims to recruit five to ten additional employees in the coming weeks.

Similarly, Frankenburg Technologies is focused on building a dedicated Middle East-based team. Prior to the recent conflict, the startup had no personnel in the region. However, CEO Salm indicated that hiring plans have been significantly accelerated due to the heightened demand. While the Middle East has been a strategic focus for Frankenburg since its inception in 2024, the current geopolitical climate has prompted an expedited expansion in the region.

The broader European defense technology sector has witnessed a remarkable surge in investment in recent years, paralleling the rise in global geopolitical tensions. According to data from Dealroom, the sector attracted $1.8 billion in 2025, nearly tripling the previous annual record. As of early 2026, the sector has already garnered $854 million in funding, demonstrating robust investor appetite for innovative defense solutions.

The United Kingdom and Germany have emerged as pivotal hubs for this wave of new defense companies, with France and Ukraine also fostering increasingly well-funded startup ecosystems. Governments from the UAE, Saudi Arabia, Qatar, and Kuwait were approached for comment. The Bahraini government declined to provide a statement.

– This report was also contributed to by CNBC’s Emma Graham.