As war rages in Ukraine, investment in European defense and dual-use tech skyrockets

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A billion dollars of venture capital will be invested into European defense technology in 2024, a first for the continent, and a five-fold increase since 2018. The investment comes as a result of both increasing geopolitical unrest and the brutal invasion of Ukraine by Russia. 

The data, contained in a new Dealroom report, shows that VC investment into defense-related tech is outpacing any other type of investment across the broad spread of NATO member states and its allies by 25%, totaling $3 billion since 2018. 

The bulk of the investment in the space since then has been captured by startups in Germany, the U.K., and France, which collectively accounted for 87%, or $2.2 billion. German defense tech companies have, alone, raised more in the past six years than those in the Nordics, Netherlands, Switzerland, and the U.K. combined. The news may come as a surprise to some observers, given the caution the German government has exhibited over shipping weapons to Ukraine. 

Much of that investment was into companies based out of Munich, which topped the list of European cities in the report. But most of that could be attributed to the $487 million raised by ‘battlefield AI’ startup Helsing in 2024.

Bristol and the U.K.’s ‘Silicon South West’ — best known for its defense and space industries — garnered the next largest amounts for defense investment, followed by Paris.

Indeed, the U.K., which has a large defense industry, is home to six of the top 10 European cities for defense tech investment in the report — London (4th), Reading (5th), Oxford (6th), Leeds (8th) and Cambridge (9th). 

The report also details how VC investment in defense tech across NATO countries rose four-fold in the last 6 years, reaching almost $5.9 billion, taking the total raised by defense startups in NATO countries and its allies to $18 billion.

Furthermore, the report counted 370 VC-backed defense tech startups in NATO countries, which have a combined enterprise value of $161 billion. And defense tech comprises 1.8% of European VC funding, a number that has tripled since 2022.

Despite Europe’s growth, the U.S. remains the dominant force in the defense tech sector, with American defense tech firms attracting 83% of VC investment. 

And even though more than half of VC funding for European defense tech startups came from investors on the continent, this year, there was a marked acceleration in funding from U.S. investors, who provided 66% of the capital for European defense tech companies.

The State of Defence Investment 2024: Resilience Builders in Nato & Europe, published at the Resilience Conference, also outlined how dual-use technologies, which can be applied for both civil and military purposes, have seen a marked rise in interest from investors. 

Jeannette zu Fürstenberg, managing director and head of Europe at General Catalyst, said in a statement: “By leveraging the power of AI, we can not only enhance our defense capabilities but also develop dual-use technologies with broader applications for critical national infrastructure. As investors, we are driven by the mission to protect democracies and build resilient infrastructure.”



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Lisa Holden
Lisa Holden
Lisa Holden is a news writer for LinkDaddy News. She writes health, sport, tech, and more. Some of her favorite topics include the latest trends in fitness and wellness, the best ways to use technology to improve your life, and the latest developments in medical research.

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