German drone maker Helsing enlists Rakuten to broker Japan military deal

By John Geddie

TOKYO, Aug 17 (Reuters) - German drone maker Helsing has enlisted Japanese e-commerce and finance firm Rakuten to help finalise a deal to sell its unmanned systems to Japan's army, a spokesperson for Rakuten said on Monday.

Japan's Ground Self-Defence Forces are currently testing Helsing's HX-2 strike drone, as Tokyo looks to modernise its military and counter an increasingly assertive China. The field tests will run until the end of September, the spokesperson said.

Helsing struck an "initial agreement" for the Japanese government to use its systems earlier this year, a spokesperson for the Munich-based company said, adding that the move was made possible by an unnamed "local brokerage partner".  

Japan's Ground Self-Defence Forces did not immediately respond to a request for comment. 

Rakuten's involvement with Helsing was first reported by Japan's Nikkei newspaper. While the Tokyo-based conglomerate has limited defence experience, it is aiming to help more startups break into Japan's defence industry.

"Encouraging greater participation for startups in Japan’s defense industry presents an important opportunity to strengthen the country’s defense capabilities. Startups often face significant structural barriers, including complex procurement systems, difficulties communicating with government agencies and challenging procurement cycles," Hideaki Mukai, Chief of Staff to Rakuten's CEO, said in a statement to Reuters.

"Rakuten hopes to help bridge these gaps by leveraging our experience and capabilities to connect startups and cutting-edge technologies with the needs of government agencies, further driving innovation and development in Japan’s defense industry."

GLOBAL DEFENCE FIRMS EYE JAPAN 

A military spending splurge by Japan, along with its easing of arms-export rules earlier this year, has sparked strong interest from overseas defence firms looking for local partners to break into a potentially lucrative new market.

Rakuten helped U.S.-listed Ukrainian drone software maker Swarmer organise a demonstration of its technology for a unit of Japan’s military earlier this year, Reuters previously reported.

The late April test involved using its AI software to coordinate a swarm of drones ​in a seek-and-hit mission in Japan.

Rakuten's billionaire founder Hiroshi ‘Mickey’ Mikitani has been among Japan’s most vocal supporters of Ukraine, and his firm has also helped other Ukrainian defence firms exhibit their products at arms fairs in Japan.

Founded in 2021, Helsing initially focused on artificial intelligence software ​designed to help analyse battlefield data ​before ⁠expanding into autonomous strike drones, underwater surveillance systems and military aircraft applications.

It has secured contracts ⁠with ​European governments and defence ​companies, while supplying drones for Ukraine backed by German government ​funding. The Munich-based firm raised $1.8 billion in a funding round in July, cementing its position as the continent's best-funded defence technology startup.

(Reporting by John Geddie in Tokyo; Editing by Kate Mayberry)