Battle-tested European drone maker takes step towards €7bn IPO

One of Europe’s fastest-growing defence technology companies is laying the groundwork for an initial public offering worth as much as €7bn as it seeks to cash in on investor demand for battle-tested drones used against Russia.

The owners of WB Electronics this week asked banks to pitch for roles managing the listing, according to people familiar with the matter, a crucial step towards a potential float in Warsaw next year.

The Polish defence company could be worth between €5bn and €7bn in an IPO based on rising profits and peer valuations, two of the people said.

Demand for the company’s unmanned aerial systems such as Flyeye, loitering munitions like Warmate and its communication systems has surged since Russia’s full-scale invasion of Ukraine, which has highlighted the growing role of fast, cheap and lethal drone production.

Nato members in Europe are increasing military spending after pressure from Russian leader Vladimir Putin in the east and US President Donald Trump in the west. Investors are also placing big bets on European defence tech start-ups as unmanned and electronic systems increasingly replace heavy tanks and artillery.

WB co-founder and chief executive Piotr Wojciechowski owns almost half of the company, with the balance held by co-founder Adam Bartosiewicz and Polish state development fund PFR, the company’s website says.

The firm’s profit more than doubled to 520mn zloty ($140mn) in the first half of this year and it has an order backlog of $9bn for the next four years, according to Bloomberg, which has previously reported on a possible IPO. WB also has backing from the EU’s Safe loans-for-arms programme, which is helping to finance the re-arming of the continent.

European defence tech start-ups from Tekever of Portugal to Germany’s Quantum Systems and Helsing have seen their valuations soar despite concerns of a bubble in areas such as drone development.

Valuations of traditional military players such as Franco-German tank maker KNDS, which has struggled to IPO, or listed competitors and ammunition makers Rheinmetall and CSG, have suffered amid worries that their products will play a smaller role in the future of warfare.

WB Electronics said it had “not taken any decision to proceed with an IPO” and was assessing “a range of strategic scenarios and options” for its development. PFR said it considered an IPO “a natural direction for WB Electronics” with the public markets providing “an opportunity to support the company’s long-term growth”.