The War in Ukraine served as a wake -up call for Europe, and defense technology went from one area that most European VCs did not touch one of Deep Tech’s top investment sectors.
This shift is recorded in the last Dealoom Report on defense, durability and safety (DSR) in Europereleased along with the NATO Innovation Fund (NIF), an initiative of multiple countries € 1 billion that is making immediate investment and support funds in this area.
The NIF portfolio includes newly established companies such as Dual-US Dual-Use, based on Portugal Tekever, which increased the $ 74 million B series B in November. Overall, the newly established DSR businesses secured a $ 5.2 billion record in business capital last year, up 24% compared to 2023 and almost 5 times more than 2019.
Despite the increase, $ 5.2 billion is just twice as much as the American technology company Anduril, it is reportedly seeking to increase itself only for itself. However, this is also a high of all time of 10% of all VC funding in Europe-an increase of two and a half folding over the last two years, according to the Dealroom.
“The appetite for defense, safety and starting of resilience is not recognizable in Europe just a few years ago,” Yoram Wijngaarde’s founder and CEO in a statement. “It follows an ongoing tendency to place capital and innovation to work in Europe’s basic strategic needs through deep technologies.”
With the DSR now representing one third of all Deep Tech Venture funding in Europe, it is obvious that the two are overlapping. This is due to the fact that the DSR is wider than defense technology, with the recognition that the supply chain, quantum technologies and energy can be equally critical to the domination of the area.
This means that a wider range of newly established businesses are now falling to the DSR pipeline, especially now that growing defense budgets make the idea of selling dual -use technology in Europe less frightening. NIF itself also hopes to help on this front. He recently appointed British Army veteran John Ridge as head of adoption.
Fragmentation and slow adoption, VC appetite have long been an obstacle, but that changes. The rise of newly formed businesses has contributed to this development: it facilitated the general VCs to host the sector in their mandate, which often prevents them from investing in pure defense technology, let alone weapons.
Pure Defense Tech only represents a smaller subset of overall funding, but this is increasing. A previous Dealroom report predicted a billion dollars for 2024, a five -fold increase since 2018. On the contrary, a wider range of European VCs is now investing in the defense technology, with more than 850 investors operating in at least one DSR deal in Europe, with the report.
This development is particularly impressive in Germany. With Munich and Berlin as his main nodes, he claimed Europe’s first place in DSR funding in 2024, followed by the United Kingdom and France. AI Defense Tech Rising Star Helsing, based in Germany, set about $ 487 million in a series of C -led by General Catalyst last year.
Still, these adjustments need time. Facilitation of Defense Amia (Def), a € 175 million fund ($ 182 million) launched in January 2024 by the European Commission and the European Investment Fund (EIF), will only announce its first investment, as the European Bank Investment (EIF) (EIF), this is just to announce its first investment. parental organization) had to Update the rules of in dual -use technology.
Of all the challenges, however, the lack of founders is not one of them, as confirmed by recent defense hackathons throughout Europe. “Despite the recent technology of development, defense, security and durability, it remains a relatively hatched sector, but the data shows an active early stage companies that want to change it,” Wijngaarde said.
