European Venture Capital Firms Increase Investment in Defense Technologies
European venture capital firms are rapidly increasing investment in defense-related technologies, spurred by the European Union’s recent approval of measures to stimulate defense spending and streamline investment within the EU budget.
The shift, part of the broader “ReArm Europe” initiative, is particularly noticeable in Central and Eastern Europe, where funds are backing startups focused on areas like drone technology, artificial intelligence, cybersecurity, and dual-use applications. Several firms are leading the charge, including Ukraine’s Angel One Fund, which invests between $50,000 and $200,000 in early-stage companies, and BSV Ventures, a Baltic firm that recently closed a €15 million fund backed by the NATO Innovation Fund. Other key investors include Poland’s Expeditions, which secured the first close of its €100 million Fund II, and the Czech Republic’s Presto Tech Horizons, a joint venture focused on dual-use solutions with ticket sizes ranging from €300K to €3M.
Ukrainian funds are heavily involved, with D3 Venture Capital, Double Tap Investments, Green Flag Ventures, MITS Capital, NEZLAMNI Fund, and SMRK all actively deploying capital into the sector. These firms are not only providing funding but also offering mentorship, access to state actors, and support for scaling operations. OTB Ventures, rooted in Poland and the Netherlands, is also increasing its focus on dual-use technologies, leveraging its $350 million in assets under management. This increased investment reflects a growing recognition of the need to bolster European security capabilities in a changing geopolitical landscape.
The EU’s move to reduce bureaucratic hurdles for defense investment is expected to further accelerate this trend, creating new opportunities for innovation and growth within the European defense industry. Officials anticipate continued growth in this sector as member states work to meet increased defense spending targets and enhance their collective security.
