MITS Capital Leads New Round for Ukrainian M-Fly to Scale Production
MITS Capital, Freedom Fund, Norwegian VC Gardar and an unnamed new investor have invested in Ukrainian defense tech M-Fly. This is the second round of funding the startup has received from MITS Capital, the largest US-Ukraine defense-focused investment group.
The size of the round and the company’s valuation were not disclosed. M-Fly produces combat-tested laser guidance systems and high-precision gyro-stabilized gimbals for unmanned aerial vehicles (UAVs).
According to a press release sent to the media, the new funding will help the company accelerate its growth and meet battlefield needs amid rising demand in Ukraine and from NATO countries.
M-Fly develops the core components – from motors and camera lenses to cameras and software – in-house. This approach has allowed the company to price its systems almost on par with Chinese offerings while keeping the share of Chinese components below 6%, M-Fly said in the press release.
“Over the past 12 months, we have doubled our team and increased revenue severalfold,” Vladyslav Myhovych, M-Fly’s founder and CEO, said in the press release. He added that demand from Ukrainian customers and NATO allies has increased significantly since the beginning of 2026, Myhovych added.
The main drivers are the growing use of interceptor drones in Ukraine and the resulting need for cheaper reconnaissance UAVs equipped with high-quality imaging systems. According to Myhovych, a gimbal can account for around one-third of a reconnaissance UAV’s cost, while some imported gimbals can cost several times more than the aircraft they are mounted on.
“Amid the global crisis called RAMageddon, we became almost hardware-agnostic, which protects our supply chain and unlocks scaling,” Myhovych said, referring to the worldwise shortage of memory chips. He expects the drone camera market to exceed $100 billion over the next five to seven years. “New funding will allow us to scale our production facilities and pace of product adaptation to hold a visible share of this market.”
This is the second time American-Ukrainian investment group MITS Capital, invests in M-Fly.
“What matters even more than performance is that the company has cracked the unit economics, allowing it to price its products significantly below those of its closest competitors,” the press release quoted Denys Gurak, co-founder and COO/CIO of MITS Capital. “That’s why we decided to support the next stage of its growth with additional funding.”
What is M-Fly
M-Fly was founded in late 2023, growing out of the founders’ earlier military-focused volunteer project supporting the military. By mid 2026, the company had raised $1.4 million through a friends-and-family round, grants from the state-owned defense tech cluster Brave1, and VC funding from MITS Capital, Freedom Fund, Resist.ua, and Ukrainian entrepreneur Borys Shestopalov, co-founder of HD-group.
As of fall 2026, M-Fly’s portfolio includes laser guidance systems and high-precision gyro-stabilized gimbals for air, maritime, and ground unmanned platforms. The company has tested its core technologies on the battlefield in Ukraine, confirming the stabilization platform’s performance at speeds of up to 350 km/h.
M-Fly offers a line of cost-efficient laser-guided systems, including RB-150CW and Seeker, to improve unmanned platforms’ efficiency.
RB-220, a heavy-duty gimbal suitable for large UAVs, manned aviation, helicopters, and naval drones, can also be used as a ground-based station for air defense applications RB-150GD, a dual-sensor gimbal with thermal and daylight video channels designed specifically for medium-class drones Based on this platform, the company is developing the RB-150 Marine, a weather-resistant gimbal for boats and vessels.
M-Fly plans to release the RB-100, the lightest product in its lineup and designed for small drones, in the first quarter of 2027, the press release says.
In 2026, M-Fly also migrated its processing architecture from random-access memory (RAM) to a graphics processing unit (GPU)-based platform. The shift makes its systems less dependent on specific computing components and lets engineers adapt more quickly when particular chips or memory components become unavailable.
As of September 2026, MITS Capital’s portfolio includes 20 companies. MITS Accelerator has graduated two six-month cohorts of startups. A third cohort – Batch 3 – is now in acceleration, focused on critical defense components, connectivity and control systems, AI-driven software, advanced weapons, counter-drone systems, and battlefield automation.
