Defense and resilience technology reached an all-time high of 10% of all VC funds in Europe

The war in Ukraine served as a call for European awakening, and defense technology went from a sector where most European VCs did not touch on one of the top investment areas of deep technology.

This shift is captured in Dealroom’s latest Report on European Defense, Resilience and Security (DSR)Multicountry released with the NATO Innovation Fund (NIF). 1 billion euro initiative Create direct investments and support funds in this area.

NIF’s portfolio includes startups such as Tekever, a dual-use drone company based in Portugal. 74 million dollar series b November. The tally shows that DSR startups secured a record $5.2 billion venture capital last year, up 24% compared to 2023, rising nearly five times more than 2019.

Despite the surge, $5.2 billion is twice as much capital as US defense technology company Anduril It is reportedly trying to raise it Just for itself. But this is also the highest ever high of 10% of all VC funds in Europe. This is a 2.5x increase over the past two years, according to Dealroom.

“For just a few years, Europe has not been able to recognize its appetite for investment in defense, security and resilience startups,” said founder and CEO Yoram Wijngaarde. statement. “We follow the ongoing trend of placing capital and innovation to address Europe’s core strategic needs through deep technology.”

DSR currently accounts for a third of all deep high-tech venture funds in Europe, meaning that the two overlaps are revealed. This is because there is a recognition that supply chain, quantum technology, and energy are equally important to the sovereignty of the region, as DSR is broader than defence technology.

This means that a wider range of startups will fall into the DSR pipeline. In particular, rising defense budgets make it difficult to think of selling dual-use technologies in Europe. NIF itself would like to support that aspect as well. Recently, he appointed British Army veteran John Ridge as Chief Adoption Officer.

Fragmentation and slow adoption aside, VC’s appetite has been a disability for a long time, but this is changing. The rise of double-use startups has contributed to this evolution. This often prevents generalist VCs from investing in pure defence technology, not to mention weapons.

Pure Defense Tech only accounts for a small subset of overall fundraising, but that’s also increasing. Previous deal room reports were expected A billion dollar tally According to the report, there will be a five-fold increase in 2024 since 2018 and since 2018.

This growth is particularly impressive in Germany. Munich and Berlin as their main hubs claimed Europe’s top spot in DSR funding in 2024, followed by the UK and France. German-based AI defense Tech Rising Star Helsing; We raised approximately $487 million Last year, in Series C, led by a general catalyst.

Still, these adaptations take time. The 175 million euro ($182 million) Defense Equity Facility (DEF), launched in January 2024 by the European Commission and the European Investment Fund, announces its first investment as a European Investment Bank I just had to do it (I’m trying to do it) Update that rule About dual use technology.

However, of all the prior challenges, the founder shortage is not one of them, as confirmed by recent defence hackathons across Europe. “Defence, security and resilience technologies continue to be relatively early sectors despite recent growth, but data shows an aggressive pipeline of early-stage companies looking to change that. “We’ll do that,” Wijngaarde said.