Expansion of investment in dual-use product startups in Europe

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. Investment in this area has increased five times compared to 2018. This investment 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 venture capital investment in defense-related technologies has reached $3 billion since 2018, a 25 percent increase over any other type of investment among NATO and its allies.

The bulk of these investments have since been attracted by startups from Germany, the UK and France, which collectively accounted 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 countries, the Netherlands, Switzerland and the UK combined. This news may come as a surprise to some observers, given the caution that the German government has shown in sending weapons to Ukraine.

A major part of these investments 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 investments are due to attracting 487 million dollars from startups Artificial intelligence 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 amount of defense investment, followed by Paris.

In fact, the UK, which has a large defense industry, is home to six of the top ten European cities for investment in defense technology: Bristol (2nd), London (4th), Reading (5th), Oxford (6th), Leeds (8th). and Cambridge (ninth).

The report also details a four-fold increase in venture capital investment in defense technology in NATO countries over the past six years to nearly $5.9 billion, bringing the total capital raised by defense startups in NATO and allied countries to $18 billion. has reached

In addition, the report counted 370 venture capital-backed defense technology startups in NATO countries with a total value of $161 billion. And defense technology accounts for 1.8% of European venture capital, a number that will triple from 2022.

Despite Europe’s growth, the United States remains the dominant force in the defense technology sector, with American defense technology companies attracting 83 percent of venture capital.

While more than half of venture funding for European defense technology startups came from investors on the continent, this year saw a significant increase in funding from US investors, who provided 66% of funding for European defense technology companies.

The State of Defense Investment 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 significant increase in investor interest.

“Using the power of artificial intelligence, 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 statement. As investors, we are driven by a mission to protect democracies and build resilient infrastructure.”