As the war in Ukraine escalates, dual-use product startups have become very attractive in the European innovation ecosystem.
By 2024, one billion dollars will be invested in European defense technologies. This has happened for the first time in the history of the ecosystem in Europe. Investme in this area has increased five times compared to 2018. This investme has been made due to the increase in geopolitical unrest and unrest between Russia and Ukraine.
According to a new report by Dealroom, data shows that veure capital investme in defense-related technologies has reached $3 billion since 2018, a 25 perce increase over any other type of investme among NATO and its allies.
The bulk of these investmes have since been attracted by startups from Germany, the UK and France, which collectively accoued for 87% or $2.2 billion. German defense technology companies alone have raised more capital in the past six years than companies from the Nordic couries, the Netherlands, Switzerland and the UK combined. This news may come as a surprise to some observers, given the caution that the German governme has shown in sending weapons to Ukraine.
A major part of these investmes has been allocated to companies based in Munich, which in the report is at the top of the list of European cities. But most of these investmes are due to attracting 487 million dollars from startups Artificial ielligence of the battlefield Helsing was in 2024.
Bristol and the UK’s Silicon South West — known for their defense and space industries — have the next highest amou of defense investme, followed by Paris.
In fact, the UK, which has a large defense industry, is home to six of the top ten European cities for investme in defense technology: Bristol (2nd), London (4th), Reading (5th), Oxford (6th), Leeds (8th). and Cambridge (nih).
The report also details a four-fold increase in veure capital investme in defense technology in NATO couries over the past six years to nearly $5.9 billion, bringing the total capital raised by defense startups in NATO and allied couries to $18 billion. has reached
In addition, the report coued 370 veure capital-backed defense technology startups in NATO couries with a total value of $161 billion. And defense technology accous for 1.8% of European veure capital, a number that will triple from 2022.
Despite Europe’s growth, the United States remains the domina force in the defense technology sector, with American defense technology companies attracting 83 perce of veure capital.
While more than half of veure funding for European defense technology startups came from investors on the coine, this year saw a significa increase in funding from US investors, who provided 66% of funding for European defense technology companies.
The State of Defense Investme 2024: Resilience Builders in NATO and Europe report, released at the Resilience Conference, also found that dual technologies that can be used for both civilian and military purposes have seen a significa increase in investor ierest.
“Using the power of artificial ielligence, we can not only strengthen our defense capabilities, but also develop dual technologies with broader applications for critical national infrastructure,” Jeanette Zoe Furstenberg, CEO and head of Europe at General Catalyst, said in a stateme. As investors, we are driven by a mission to protect democracies and build resilie infrastructure.”
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