In 2025, Europe's Battlefront Moves into Venture Capital: Defence Tech Emerges as the Lucrative New Investment Playground

Gone are the days when defence tech sparked controversy. Today, it’s a scorching, frenetic sector for European venture capitalists, who are vigorously raising defence-specific funds or realigning money from their existing coffers to embrace startups delving into everything from protective maritime technology to autonomous drones to cutting-edge weapons tech.

The results speak volumes. Two drone sectors, German Quantum Systems and Portuguese Tekever, gained unicorn status this year. Artificial Intelligence defence firm Helsing made headlines by raising an astronomical €600 million, catapulting its valuation to a majestic €12 billion. This has placed Helsing among the European startup elite.

Among the big players are Kyiv-based D3HQ that backs early-stage defence startups within the Ukraine and its allies, NATO Innovation Fund in Amsterdam, backing deeptech and defence startups in NATO countries, Berlin’s Project A known for its defence bets, and Madrid’s 201 Ventures led by a former CIA officer. These entities have garnered landmark deals.

Ironically, the sector’s popularity came with its fair share of chaos. The NATO Innovation Fund has had its foundation rocked by controversies, including conflicts of interest and disorganisation allegations since launching two years ago.

Despite the turbulence, the venture capital industry’s confidence remains unflustered, writes colossal initial cheques, and invests diligently in a variety of defence tech sectors. These range from autonomous robotics to maritime tech, indicating the enriched scope of defence technology and its transformative impact