“Silicon Valley VCs are happy with defence and dual-use investing. New Zealand is behind, in my opinion. We’re still allergic to anything that could be considered used by the Navy or Army or Air Force – whether it’s got 1080 on it or it’s got guns on it.”
Now, three local VCs have overcome that allergy.
Syos said overnight that it had staged its first “institutional” raise.
The firm said the round was led by Outset Ventures (which includes Sir Peter Beck on its investment committee) and “anchored” by NZVC, the fund founded by Mark Pavlyukovskyy, a Ukrainian active on the US venture capital scene before he relocated to Queenstown on the cusp of the pandemic)
It was supported by Altered Capital plus undisclosed strategic funds
Outset, NZVC and Altered Capital are all high-profile players on the local VC scene, if not on the top tier occupied by heavyweights like Movac and Icehouse Ventures.
Unusually for a VC raise, Syos and its backers refused to say how much money was raised and at what valuation.
Vye at his company’s Mt Maunganui plant with Syos’ uncrewed ground vehicle, which can carry loads of up to 400kg. Photo / Jason Dorday
Syos did say that the round took the form of convertible notes – or loans that can be converted to equity once a “qualifying event” (usually a Series A raise) occurs.
The firm’s latest Companies Office update is dated July 29, has Vye as the largest shareholder with a 71% stake, followed by Tapper (12%), Morgan (7%), Baigent (6%) and several smaller holders.
The new capital will “will enable Syos to scale to meet customer demand after securing multiple contracts delivering to various nations, including the UK, Ukraine, New Zealand and Canada.”
Syos, which has operations in Mount Maunganui (see video top of story) and Fareham in the UK, was founded by Vye, an ex-pat Brit, in 2021.
A partially assembled Syos ‘thumper’ drone, used to intercept incoming drones or other projectiles. Photo / Jason Dorday
The start-up’s breakthrough moment came in early 2025 when it revealed a £30 million ($66m) agreement in 2025 with the UK’s Ministry of Defence, which in turn funneled Syos hardware to Ukraine.
Syos’ line-up of uncrewed vehicles includes a heavy-lifting chopper, a small boat, an underwater drone (after buying Tauranga’s Bay Dynamics), a ground vehicle plus “thumper” drones that can be used to intercept incoming drones or projectiles.
Vye earlier told the Herald that, in crowded market, Syos wins deals with its fast-turnaround product development plus its software that lets one person control many drones, of different types, at once.
The latest version of the Syos SA200 uncrewed chopper, which can carry payload of up to 200kg, with a range of up 300km.
When the Herald went behind the scenes at Syos’ Mount Maunganui plant in September last year, the firm had 100 staff between NZ and the UK.
It now includes employs “close to 200″ across the two sites.
Outset Ventures managing partner Angus Blair, who joins the Syos board, said: “Sam and the team built a defence manufacturer out of New Zealand and the UK, and paid for it with customer contracts on limited capital. That’s rare. Allied nations need capability they can field in months, and Syos is already delivering it across Nato and the Indo-Pacific.”
NZVC founder Mark Pavlyukovskyy is a Ukrainian who was active on the US venture capital scene before hunkering down in Queenstown during the pandemic.
NZVC’s Pavlyukovskyy said: “As we see every day, the rules-based order is falling apart, and allied democracies are realising that to protect their values they need the actual capability to do it. Syos builds that capability.
“Its uncrewed systems ship in months, at volume, financed by customer contracts alone.
“We will be beside Sam as Syos scales production in the UK and New Zealand and we will open doors for it in the US defence and technology industries.”
Vye has hinted that Syos is in the running for a UK navy contract. His firm is also in the running for business under the NZ Defence Force’s new, drone-friendly Technology Accelerator Programme, which will see the NZDF spend between $100m and $300m on drones and other automated technologies.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.