Scherf had to fight hard to attract investment after starting his company - which produces military strike drones and battlefield AI - four years ago.
Now, that s the least of his problems. The Munich-based company more than doubled its valuation to $12 billion at a fundraising last month.
"Europe this year, for the first time in decades, is spending more on defense technology acquisition, opens new tab than the U.S.," said Scherf.
The former partner at McKinsey & Company says Europe may be on the cusp of a transformation in defence innovation akin to the Manhattan Project - the scientific push that saw the U.S. rapidly develop nuclear weapons during World War Two.
"Europe is now coming to terms with defense."
Reuters spoke to two dozens executives, investors and policymakers to examine how Germany - Europe s largest economy - aims to play a central role in the rearming the continent.
Chancellor Friedrich Merz s government views AI and start-up technology as key to its defence plans and is slashing bureaucracy to connect startups directly to the upper echelons of its military, the sources told Reuters.
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Shaped by the trauma of Nazi militarism and a strong postwar pacifist ethos, Germany long maintained a relatively small and cautious defence sector, sheltered by U.S. security guarantees.
Germany s business model, shaped by a deep aversion to risk, has also favoured incremental improvements over disruptive innovation.
No more. With U.S. military support now more uncertain, Germany - one of the biggest backers of Ukraine - plans to nearly triple its regular defence budget to around 162 billion euros ($175 billion) per year by 2029.
Much of that money will go into reinventing the nature of warfare, the sources said.
Helsing is part of a wave of German defence start-ups developing cutting-edge technology, from tank-like AI robots and unmanned mini-submarines to battle-ready spy cockroaches.
"We want to help give Europe its spine back," said Scherf.
Some of these smaller firms are now advising the government alongside established firms - so-called primes such as Rheinmetall (RHMG.DE), opens new tab and Hensoldt (HAGG.DE), opens new tab - that have less incentive to focus primarily on innovation, given their long backlogs for conventional systems, one of the sources said.
A new draft procurement law, approved by Merz s cabinet on Wednesday, aims to reduce hurdles for cash-strapped start-ups to join tenders by enabling advance payment to these firms.
The law would also entitle authorities to limit tenders to bidders inside the European Union.
Marc Wietfeld, CEO and founder of autonomous robots maker ARX Robotics, said a recent meeting with German defence minister Boris Pistorius hammered home how deep the rethink in Berlin goes.
"He told me: Money is no longer an excuse - it s there now . That was a turning point," he said.
GERMANY IN THE LEAD
Since Donald Trump s return to the political stage and his renewed questioning of America s commitment to NATO, Germany has committed to meet the alliance s new target of 3.5% of GDP on defense spending by 2029 - faster than most European allies.
Officials in Berlin have emphasized the need to foster a European defence industry rather than rely on U.S. companies. But the hurdles towards scaling up industry champions in Germany - and Europe more broadly - are considerable.
Unlike in the United States, the market is fragmented in Europe. Each country has its own set of procurement standards to fulfill contracts.
The United States, the world s top military spender, already has an established stable of defence giants, like Lockheed Martin and RTX, and an advantage in key areas, including satellite technology, fighter jets and precise-guided munitions.
Washington also began boosting defence tech startups in 2015 - including Shield AI, drone maker Anduril and software company Palantir - by awarding them parts of military contracts.
European startups until recently languished with little government support.
But an analysis by Aviation Week in May showed Europe s 19 top defence spenders - including Turkey and Ukraine - were projected to spend 180.1 billion this year on military procurement compared, to 175.6 billion for the United States. Washington s overall military spending will remain higher.
