The war in Ukraine served as a get up for Europe, and the defense technology has passed from the sector, whose majority of European VC didn’t affect one of the best investment areas in deep technology.
This change is captured in the latest Dealroom program Report on defense, resistance and security (DSR) in EuropePublished together with NATO Innovation Fund (NIF), a multiple initiative price EUR 1 billion, creating direct investments and support funds in this space.
The NIF portfolio includes startups, akin to Portugal Drone Drone Company Tekver, which in November collected $ 74 million B. Series B. In the DSR Startups aggregates, they provided a record $ 5.2 billion in the capital of investing last 12 months, which is an increase of 24% in comparison with 2023 and almost 5x greater than in 2019.
Despite the growth, there is only twice as much capital than the American technology company Anduril, apparently attempting to collect only for himself. However, this is also the highest level of 10% of all VC funds in Europe-according to the Dealroom increase over the past two years.
“Appetite for investments in the field of protection, safety and immunity is beyond recognition in Europe with only a few years,” said its founder and general director Yoram Wijngaarde Wa statement. “This is due to a continuous trend in the field of introducing capital and innovation in terms of basic strategic needs in Europe, through deep technologies.”
Because DSR now corresponds to one -third of financing a deep technological undertaking in Europe, it is obvious that each overlap. This is as a result of the proven fact that DSR is broader than defensive technology, with the recognition that the supply chain, quantum technologies and energy may be equally crucial for the sovereignty of the region.
This implies that a wider range of startups now belong to the DSR pipeline, especially now that the growing defensive budgets make the idea of selling double application technology in Europe less discouraging. NIF himself also hopes to assist this front; He recently appointed a British army veteran John Ridge as his adoption director.
Apart from the fragmentation and slow reception, the VC appetite has long been an obstacle, but it changes. The increase in startups with double use contributed to this evolution: this has facilitated the general VCS to incorporate the sector as part of their mandate, which frequently prevents them from investing in pure defense technology, not to say weapons.
Pure Defense Tech is only responsible for the smaller subset of general financing, but it also grows; In the previous report with the transaction, $ 1 billion was expected for 2024, a five -time increase from 2018 and vice versa, the wider range of European VCS now makes investments adjoining to defense technology, and over 850 investors are operating in at least one DSR transaction in Europe, in keeping with report.
This growth is particularly striking in Germany; Munich and Berlin as the principal hubs, he won the first place in Europe in financing DSR in 2024, followed by Great Britain and France. The AI Defense Tech Rising Helsing star, based in Germany, collected about $ 487 million in the C series led by General Catalyst last 12 months.
Despite this, these adaptations take time. Defense Equity Facility (DED), Fund in the amount of EUR 175 million (USD 182 million) launched in January 2024 by the European Commission and the European Investment Fund (EIF), will only announce its first investments as the European Investment Bank (EIF’s (EIF’s Organization mother) must Update its rules In the field of double application technology.
Of all the challenges, the lack of founders is not one of them, which was confirmed by the recent defense hackatons throughout Europe. “Despite the recent increase in defense, security and resistance technology, they remain a relatively emerging sector, but the data show the active pipeline of companies that want to change it,” said Wijngaarde.