LAT Defence

LAT Defence is a 2026 Latvian defence-technology venture manufacturing the single most jam-resistant component in modern drone warfare: fibre-optic spools for FPV drones. Because control and video travel down glass rather than radio, the link cannot be jammed, spoofed, or intercepted — the capability that reshaped the modern battlefield. The company is structured as a Latvia–Ukraine joint venture, pairing sovereign European production with battle-proven Ukrainian frontline engineering, and operates across three lines: unmanned-systems production, professional operator training, and critical-infrastructure protection.

The modelled core — the fibre-optic spool plant — targets 500 units/month at a 17% EBITDA margin, generating €6.19M revenue at full capacity with a 6-month operational payback. Janus Capital serves as strategic investment partner in a venture positioned directly on Europe's largest rearmament cycle since the Cold War.

Highlights

• Jam-Proof Advantage — The fibre-optic link is immune to electronic warfare — the fastest-growing FPV segment precisely because it cannot be electronically countered.

• Sovereign EU Supply — EU-based, NATO-aligned and sanctions-clean production on NATO's eastern flank — a provenance moat, not just a cost position.

• Capability Platform — Three integrated lines — UAS manufacturing, operator training, and critical-infrastructure / counter-UAS assessment.

• Strategic Partners — Combines Latvian firms LAT Security, GPP 3D and Baltic Drone Academy with Ukrainian unmanned-systems manufacturer Ukropchik.

Our thesis rests on three structural tailwinds: the ReArm Europe / SAFE mobilisation of up to €800B, Latvia's legislated 5%-of-GDP defence floor from 2027, and a genuinely supply-constrained fibre market where a NATO-side producer is strategically scarce. Demand is not the risk — at 500 units/month LAT consumes under 0.3% of current Russia+Ukraine fibre demand, with a second shift doubling output at no new equipment CAPEX.

We underwrite the downside first. The model prices fibre near its cyclical peak (conservative on cost, leveraged on margin), and we treat two forward risks explicitly — the shift to onboard AI guidance and a potential ceasefire — structuring for fast capital recovery, fibre-price/FX hedging, and the peacetime-resilient training and infrastructure legs as the hedge.