- Drones have rewritten the rules of war
- Perth-based Aurora Labs is targeting the drone-propulsion crunch
- The company’s 3D precision tech could power the next generation of UAVs
Special Report: Aurora Labs is shifting from printing metal to powering drones as turbojet demand explodes. And if it can deliver engines fast enough, this $20m small cap could end up driving the frontline.
Warfare has changed dramatically.
The Ukraine conflict proved drones are no longer niche hardware on the edges of the battlefield – they’re now the main act
Low-cost, one-way systems launched in massive numbers have turned propulsion, guidance and supply chains into strategic chokepoints.
Global military budgets have climbed above US$2.7 trillion – the highest on record – and NATO members are being pushed to spend even more.
Australia is also stepping up. Through AUKUS and the Advanced Strategic Capabilities Accelerator (ASCA), defence funding is increasingly geared toward fast-evolving technologies such as drones, loitering munitions and guided weapons.
The technology is shifting so fast that frontline soldiers are cycling through new UAV hardware in weeks, not years.
That pace of change raises two big questions for defence planners and investors: who will build the engines powering this new class of unmanned systems – and can they be manufactured sovereignly, at scale, and fast enough?
Aurora Labs (ASX:A3D), a small Perth-based advanced manufacturer that started life as a 3D metal printing company, is trying to answer both.
From 3D printer to propulsion specialist
Aurora Lab’s CEO, Rebekah Letheby, has been with the business almost from day one.
“I’ve actually been with Aurora Labs for nearly a decade,” she said. “I was here when we first listed on the ASX, and I’ve been part of the journey to help our technology grow.”
The early years were classic deep-tech: develop laser powder bed fusion (LPBF) printers, build out software, and push the boundaries of what complex metal parts could look like.
That work produced Australia’s only sovereign LPBF printer, and a suite of in-house software and powder delivery systems now protected by patents.
But great machines alone weren’t enough.
“We were an additive manufacturing company making machines, and I felt at that point that the business wasn’t thriving because it was needing to broaden out as a unique selling proposition,” Letheby told PasarModern.com.
Seeing where defence demand was heading, she pushed for a pivot.
Instead of just selling printers, Aurora would use its own technology to make highly specialised products – starting with propulsion systems and warhead components – aimed squarely at defence and aerospace.
“I thought that with a small rearrangement of that suite of technologies, and with an orientation towards defence, that I would be able to really grow the company from strength to strength.”
The drone-propulsion gap
Aurora’s strategic bet is that the world will need far more turbojet-class propulsion systems than current suppliers can deliver.
Turbojets, unlike battery-powered drones, can fly further and faster, opening up long-range surveillance and strike roles.
“It differs essentially from battery powered drones, because turbo jets can achieve a lot further range, generally, and a lot faster speeds,” Letheby said.
“So, if an aerial vehicle can go something like 0.8 Mach, which is subsonic, its able to be much faster than the general class of battery-powered drones.”
“Why this is such an important segment is because warfare is very much a changed landscape since the Ukrainian conflict, and we have seen that swing around to the use of low-cost one-way systems, that need a wide range of mission profile capabilities and to be fast” she said.
At the recent DSEI defence trade fair in London, Aurora heard the same message repeatedly: defence customers want more engines than the current ecosystem can produce.
““Ukraine has been an important catalyst,” Letheby said. “But it sits within a broader shift in the Indo-Pacific, where the strategic space is narrowing. It’s important we remain vigilant, stand alongside our regional partners, and project the kind of capability that contributes to a stable, secure region.”
Add to that the AUKUS framework, the Australian Defence Strategic Review, and the opportunity becomes clearer for a company that can manufacture advanced propulsion locally.
How Aurora’s technology works
At its core, Aurora is still a metal 3D printing company; it has just moved closer to the sharp end of the application.
Letheby explained that LPBF is a metal 3D-printing process where fine metal powder is spread out in thin layers and then melted together by a precise laser beam.
By repeating that layer-by-layer, the machine builds a complete metal part with internal features that traditional manufacturing can’t easily produce.
“We use the technology to print all sorts of different 3D metal geometries, and it gives us a freedom to make geometries which aren’t ordinarily seen in other methods of manufacturing,” she added.
Aurora’s printers can create complex cooling paths and lightweight structures that traditional methods of manufacture struggle to match, while reducing waste and tooling costs.
On top of the hardware, Aurora has built its own software stack – including its Mantis slicer and oscillating powder dosing system – to control how each layer is deposited and fused.
The goal is simple, even if the engineering is not: “productivity, regularity of the process, and repeatability resulting in a quality product.”
Those capabilities now underpin the company’s family of micro gas turbines – the AU2 (~200N thrust), AU4 (~400N thrust), and a next-generation propulsion system being co-developed with the Australian Defence Force.
Because key parts of these turbines are 3D-printed, they can be made lighter and more fuel efficient than traditional engines.
That means drones can fly further on the same fuel, or carry more payload without adding weight.
Contracts, partners and the path to revenue
That strategic logic is already showing up in Aurora’s contract book. Since mid-2024, the company has secured five ADF contracts worth almost $1 million.
On the commercial side, Aurora has signed an agreement with Sovereign Propulsion Systems (SPS), an Australian UAS developer that also became a cornerstone investor in the company’s recent $5.5 million placement.
“SPS provides access to UAS platforms, a flight-test range and a dedicated demonstration lab, giving Aurora immediate access to an environment to advance our propulsion systems.” Letheby said.
“When SPS test our propulsion systems, they have access to a large flight range, and they are very willing to share back that flight data to Aurora, widening our knowledge base.”
Beyond propulsion, Aurora is also moving into additively manufactured warhead components in advanced alloys, supported by research work with the government Defence Science and Technology Group (DSTG) and an MOU with Ares Armaments.
Warhead components are repeatable, high-number parts where near-net-shape printing can reduce waste and cost.
“So, Aurora really continues to try and innovate on a number of additive products, not just in propulsion, but that are very particular to defence,” she said.
Operational rollout begins
For now, Aurora is in the transition zone between development and revenue. Its market capitalisation is around $20 million.
The company sits in a part of the value chain that’s becoming more strategically important.
Its Canning Vale facility is being upgraded, a pilot batch of 25 engines is in production, and durability testing and AS9100D aerospace-quality certification preparation are underway.
“I think that in 2026, investors should expect a decisive shift,” Letheby said. “We’ll continue producing small-batch engines for our first customers, but more importantly—we’ll begin delivering them,” Letheby said.
““The market is watching for that moment when engines leave our facility and enter the hands of operators. That’s the milestone that matters.”
“I fully intend to deliver on that in 2026. When we do, the momentum behind Aurora will build fast—we’ll have proven capability at a time when regional strength and readiness have never been more important.”
At PasarModern.comwe tell it like it is. While Aurora Labs is a PasarModern.comadvertiser, it did not sponsor this article.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decision.
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