Sam Vye built a global defence exporter after local VCs said no

From turned away to co-led

Two years ago, Syos Aerospace founder Sam Vye couldn’t get a New Zealand venture fund to return his calls. At the 2024 NZ Aerospace Summit, Vye said most local VC groups “couldn’t invest in dual-use technology because it was against their investment criteria and ESG policies.” He was blunt about the comparison: “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.”

That allergy has now broken. Syos has closed its first institutional capital raise, a convertible note co-led by NZVC and Outset Ventures with participation from Altered Capital and undisclosed strategic funds. The terms are undisclosed, but the symbolism is not. Outset partner Angus Blair, who warned at that same 2024 summit that New Zealand risked “having our lunch eaten by Australia,” is now co-leading the deal and joining the Syos board.

Why the money finally showed up

The structural block was explicit. Nearly all local VC funds have taken backing from Crown agency NZ Growth Capital Partners, whose mandate prohibits investing in firms that create dual-use technologies. That forced Syos to raise from high-net-worth individuals, including Sam Morgan, rather than institutions.

What changed the investors’ minds is a track record most startups never build. Syos funded five years of growth entirely through customer contracts, a rarity that de-risks the whole thesis. NZVC general partner Mark Pavlyukovskyy framed it in geopolitical terms: “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.” Blair put the commercial case plainly: “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.”

What Syos actually built

Founded in 2021, Syos started building unmanned helicopters for agriculture and forestry before pivoting into defence after Russia’s 2022 invasion of Ukraine. It now employs almost 200 people across sites in Fareham in the UK, New Zealand and Ukraine, building autonomous air, maritime, ground and counter-drone systems on its own software.

The breakthrough was a £30 million agreement with the UK Ministry of Defence in 2025, announced during Christopher Luxon’s UK mission, with hardware channelled to Ukraine. Since then the company has delivered over 150 uncrewed surface vehicles to allied nations, completed autonomous trials of its SA200 heavy-lift helicopter, launched an underwater vehicle, and secured a sovereign contract with the NZ Defence Force in February 2026. Vye’s plan for the fresh capital is characteristically blunt: “go harder, go faster, and go quicker.”

The $12 billion reason this matters

The timing is no accident. The Defence Capability Plan 2025 commits $12 billion in capital and operating spend, lifting defence outlay towards 2% of GDP by 2032/33 from 1.1% now. Budget 2026 added $880 million in operating and $700 million in new capital funding, taking total new investment since the plan to $5.8 billion, with more than 80% of NZDF’s operating budget spent domestically.

Most relevant to Syos, the government’s Industrial Base Statement on uncrewed systems flags indicative investments of $50-$100 million for uncrewed maritime vessels, $100-$300 million for long-range remotely piloted aircraft, and up to $50 million for counter-aerial systems. New procurement rules even let Defence bypass open advertising for prototypes co-developed with NZDF, a direct pathway for firms like Syos.

The lunch is still on the table

One raise does not fix the ecosystem. The NZ Growth Capital Partners policy that blocked the sector has not publicly changed, and Australia’s deeper defence investment infrastructure and preferential access to US and UK technology remain a structural gap. Syos proved a Kiwi startup can compete with the world’s largest defence contractors on customer contracts alone. The open question is whether the rest of New Zealand’s capital and industrial base can move fast enough to capture the roughly $450 million in indicative uncrewed procurement, and the wider $12 billion, before it gets eaten across the Tasman.

Sources

• ‘Squeamish’ no more: Mount Maunganui military drone maker Syos taps three local funds for capital (2026-09-22)
• SYOS Aerospace Takes First Institutional Capital To Accelerate R&D, Production Capacity, And International Footprint (2026-09-23)
• Syos Aerospace secures first institutional funding (2026-09-23)
• Defence Capability Plan 2025 – Cabinet Paper (2025-04-07)
• Budget 2026 shores up maritime security (2026-05-23)
• Industrial Base Statement – Uncrewed Systems & Counter Systems (2026-04)
• NZ Aerospace Summit: Protestors see too much defence work, startups say we’re too squeamish about funding dual-use tech (2024-09-24)