London-based enterprise and defence startup Valarian has raised a $50 million Series A led by New Enterprise Associates (NEA), taking its total funding to $70 million as demand grows for infrastructure that allows governments and companies to retain control of sensitive AI systems and data, as well as for alternatives to US Big Tech.
The round is NEA’s first-ever European investment in defence and dual-use technology. Valarian cofounder and chief executive Max Buchan told Pathfounders in an interview that the planned raise was “100% oversubscribed” and was expanded to include strategic investors, including XTX Markets and Palo Alto Networks chief executive Nikesh Arora, who invested personally.
Valarian will use the funding primarily to expand its engineering team and clear a backlog of customer deployments.
“We are deploying at such a rate that it has become painful from an engineering perspective,” Buchan said. “We had a serious backlog of customer implementations, so the premise of the round was to scale engineering very quickly and get products out of the door. We were 20 people ‘and a dog’ trying to ship infrastructure technology at this rate.”
Founded by Buchan and Josh McLaughlin, Valarian builds a software layer between computing infrastructure and the applications or AI systems running on it. Its technology can operate across public clouds including Amazon Web Services, Microsoft Azure and Google Cloud, as well as private clouds, on-premise data centres and edge systems.
“For me, sovereignty means optionality and control: optionality over who you buy from and control over the stack,” Buchan said. “I don’t think the answer is rebuilding everything from top to bottom. Europe and the UK do not have the money, bandwidth or know-how to reinvent every part of the wheel.”
Valarian’s ACRA product is deployed inside the customer’s own infrastructure. The company says it does not host customer data, operate servers on their behalf or retain their encryption keys.
“Every customer gets a unique version of ACRA,” Buchan said. “They can deploy it in a public, private or hybrid cloud, in a government cloud, on-premise or at the edge. We are agnostic to the underlying hardware and compute layer.”
He described the platform as a zero-trust operating environment that isolates different applications and AI systems, allowing customers to run open-weight models against sensitive data without sending that information to Valarian or an external AI model provider.
“They keep all of that data sovereign inside the enterprise,” he said. “They don’t give Valarian any information, and they don’t give a frontier model company any information. The premise is to build a walled garden around the enterprise or defence institution.”
If that sounds rather similar to the pitch made by Palantir’s Alex Karp recently, then it’s intentional.
“My co-founder spent 12 years at Palantir (McLaughlin was a managing director). He left in 2023 to join Valarian… What I would say is… the idea that there's only one provider that you can use just makes me nervous… I don't think it's good for the taxpayer if you don't have optionality that you can buy from.”
“The pessimism that you can't build stuff in the UK, that you can't build tier one technologies… we are deployed on four continents around the world… I know our technology works… so this idea that we can't build stuff in the UK really annoys me.”
The company initially found demand among national-security customers and militaries seeking to run sensitive applications on infrastructure they could control. Buchan said half of its business now comes from commercial customers in finance, healthcare and life sciences.
“We are very much dual-use,” he said. “The first use cases were around national security and running highly sensitive systems on sovereign infrastructure, even where the underlying compute came from a public cloud. But 50% of our business is now enterprise.”
Valarian does not identify its customers, but Buchan said its government work was limited to the UK and “allied” countries. Its commercial clients include large financial and healthcare institutions that regard the platform as critical infrastructure.
“The reason customers are sensitive about being named is that they class us as critical infrastructure,” he said. “You do not necessarily want to publicise which company you use for this part of your technology stack.”
Valarian is targeting the concern that organisations adopting external AI platforms could expose valuable corporate data, intellectual property and internal processes to a small number of model providers.
“The only things that are not commoditised are the specific facets of a business that allow it to outcompete,” Buchan said. “Giving those away, not just for free, but paying someone to take them, is a worrying position.”
He said much of Valarian’s recent growth had come from organisations using its infrastructure to deploy open-weight models without leaking telemetry to outside providers.
Buchan also rejected the idea that sovereign infrastructure required organisations to abandon American cloud or technology companies entirely. Instead, he said Valarian is designed to give customers the ability to change providers and keep operating if access to a particular supplier or service is restricted.
Asked about accepting investment from a US venture capital firm while promoting European sovereignty, Buchan said Valarian had struggled to secure sufficient growth capital locally.
“One of the fundamental problems in Europe is that I struggled to find the growth capital we needed that wasn’t in Silicon Valley,” he said. “NEA was a balance for us because it was founded in the US but also has a full European fund. From an ownership perspective, the company remains overwhelmingly British-owned, so we are comfortable about control.”
“We have a history of inventing technologies here, but not always capturing the long-term economic benefit. We are trying to change that,” he added.
Commenting in a statement, Kanishka Narayan, UK Minister for AI and Online Safety said: “To shape our own destiny, in accordance with our values, it is imperative that we build Britain's sovereign AI capabilities. Pioneering British firms like Valarian understand the challenge that's in front of us and are building the solutions that will help us deliver a safer and stronger Britain.”
