Defense tech isn’t all drone swarms and software. Sometimes the basic, unsexy stuff is the most important, especially when you live on the doorstep of Europe’s largest land war since WWII.
Yesterday, SWEBAL, a Swedish startup founded by a fintech entrepreneur (totally normal career path), announced that it raised €30M to change the way Europe produces TNT—the critical explosive material, used in everything from low-cost drone warheads to 155mm artillery and mines.
Fun fact: Did you know that, as of now, Europe has just one plant producing the stuff?
Banks to bombs: After selling his fintech startup to Mastercard, Joakim Sjöblom found himself in a bit of a mid-career “identity crisis,” which coincided with the Russian invasion of Ukraine.
Once Sweden joined NATO, Sjöblom “spent a lot of time with the manufacturing industry, politicians, and the armed forces, and it was scary when people started to compare Russian output capacity with European output capacity,” he told Tectonic. “Partly out of duty, partly out of interest,” he decided to “understand the implications of becoming a NATO ally” and take matters into his own hands, launching SWEBAL (Swedish Ballistics) in 2023.
He settled on TNT in part because of the severe bottleneck in the material’s production—both in the US and in Europe, which has a single plant, located in Poland—and in part because “all four materials needed to produce TNT are available either in Sweden or around the Baltic Sea,” Sjöblom said. “That means we could have a really tight supply chain and maintain production even in a state of war.”
That sounds like a pretty solid plan, but it hasn’t exactly been smooth sailing, given Sweden’s strict regulations. “We spent almost two years and $2M just doing ancient species analysis, ancient remains analysis, groundwater analysis, just everything in between,” he said. “400 pages and $2M before we could even submit the application [to build the plant].”
“We’re doing this to catch up with Russian capacity, but it’s hard to catch up with someone playing by different rules,” he added.
Green light: SWEBAL had its plant permit approved in December and rushed to raise funding to build it. The €30M funding round, together with “some tens of millions in debt on top,” puts the plant “close to fully financed,” Sjöblom said.
- Swebal’s backers in the round include Sweden’s former army chief Karl Engelbrektson, ex-EQT CEO Thomas von Koch, and several Swedish family offices.
Once the startup’s plant is up and running in 2028, SWEBAL expects to produce 4,000 metric tons of TNT, to be “exported across NATO” to “any ally that is manufacturing large-caliber ammunition, drone munitions, or mines.”
Right now, SWEBAL is focused on delivering to Europe and NATO’s biggest primes, and they want to keep it that way. “I want to stay a partner with the primes and help address their bottlenecks,” he said. “I would rather supply General Dynamics than compete with them.”
Given a certain company’s very public struggles with 155mm production and Europe’s lack of TNT, that team spirit could be pretty welcome.