Our investment in Arkeus

Folklore Ventures is delighted to announce our Fund 3 investment in Arkeus' A$25M Series A, alongside QIC Ventures and R+ VC, alongside returning investors including Main Sequence Ventures. 

Founded in Melbourne by Simon Olsen (CEO) and Dr Jonathan Nebauer (CTO), Arkeus is a next-generation advanced technology company redefining Intelligence, Surveillance and Reconnaissance (ISR) systems for modern defence and intelligence. The company develops full-stack optical sensing systems that use on-device AI to autonomously detect, classify and geolocate objects in real-time across land, air and sea. When integrated with unmanned aircraft systems (UAS) and unmanned surface vessels (USV), Arkeus sensors enable situational awareness in communications-denied environments without human intervention, replacing legacy optics systems initially designed in the 1990s. The Arkeus product is what founders Jonathan and Simon, pictured here, describe as the "eyes and brain" of modern unmanned platforms. 

To understand the importance of Arkeus, it’s helpful to understand legacy sensing systems for  unmanned platforms, which typically consist of a camera that streams video back to a human operator. These systems generate large volumes of footage and place a heavy cognitive burden on operators to manually interpret what they are seeing. The image quality also severely degrades in haze, smoke, dust, ocean glare and low light environments. Whilst software has improved these traditional camera systems over the last decade, software-only improvements  cannot overcome incumbent hardware constraints. Simon and Jonathan understood that machines could not act autonomously without accurately perceiving their environments, and that better sensing solutions were necessary.

Having spent a decade together at Sentient Vision Systems (SVS), an AI computer vision company, Simon and Jonathan were uniquely positioned to resolve the autonomous sensing problem. At SVS, Simon sold vision systems into the US defence and built trusted relationships with customers. Jonathan holds a PhD in Aerospace Engineering from Monash University and offers rare technical depth combined with an obsessive focus on operational excellence, developed through years of field deployments, witnessing firsthand where existing systems fell short. 

Their expertise resulted in the development of Arkeus’ first product, a HSOR (Hyperspectral Optical Radar) that detects targets across vast areas, operates without GPS or external communications and requires zero human intervention. Evaluators from various U.S. government agencies describe Arkeus’ HSOR as "orders of magnitude better” than any other solution on the market, and that HSOR  “represents a significant advancement in passive reconnaissance capabilities.”

The market opportunity is vast and growing. Global defence spending reached a record US$2.7 trillion in 2024, with NATO allies committing to 5% of GDP by 2035 and the US is increasing its defence spending to US$1.7 trillion in 2027. As demand for more autonomous defence technologies grows, Arkeus is well positioned, having already deployed systems with both the Australian Department of Defence and US Department of War. It is also integrated with major drone manufacturers including AeroVironment, Textron, Tekever and Boeing subsidiary Insitu.

This Series A funding allows Arkeus to service large, international customers currently in their pipeline. The company will establish manufacturing facilities in both Queensland (Australia) and the US to produce more HSOR units to meet demand, with the American presence also unlocking access to US defence programs. The team size will more than double to nearly 100 people and the company will continue R&D on the next generation of sensing products.

Folklore believes Arkeus is a perfect example of world-class Australian advanced technology, tackling a problem that is both technically challenging and strategically critical. Folklore will be actively supporting the company and we are proud to be backing Simon, Jonathan and the Arkeus team.