A Surge in Defense Tech Investment for European Security

Venture capital (VC) investment in Europe's defense technology sector is experiencing a remarkable boom, driven by a heightened focus on national security in response to escalating geopolitical instability.

• VC investment in European defense tech is set to reach a record $1 billion in 2024, marking a fivefold increase since 2018.
• Governments are increasingly turning to the defense tech sector to strengthen national security, making Europe the epicenter of an investment surge.
• Startups are playing a critical role, bringing agility, speed, and deep technical expertise to bolster Europe's defense capabilities.

Germany Leading the Charge in European Defense Tech Investment

Germany, the UK, and France are dominating defense tech investment in Europe, capturing 87% of the total funding since 2018.

• These three countries have collectively raised $2.2 billion in defense tech investment since 2018.
• Germany's defense tech investment has surpassed the combined investments of the UK, Nordics, Netherlands, and Switzerland.
• Munich has emerged as a leading hub for defense tech investment, attracting significant capital, including Helsing's $487 million fundraise in 2024.
• The UK also has a strong presence, with Bristol, London, Reading, Oxford, Leeds, and Cambridge among the top ten investment hubs.

NATO Countries Embracing Defense Tech Investments for Security

NATO countries are significantly increasing their investments in defense tech startups, demonstrating a collective commitment to strengthening security within the alliance.

• VC investment in European defense tech startups is outpacing the growth of investments across the wider NATO group by 25%.
• The US is currently leading the charge in defense tech investment within NATO.
• Overall, venture capital investment among NATO countries has quadrupled since 2018, with the alliance on track to close 2024 with $5.9 billion in defense tech investment.
• Since 2018, startups within the NATO area have raised a total of $18 billion in defense tech investment.
• There are currently 370 VC-backed defense tech startups in NATO countries, with a combined enterprise value of $161 billion.

The Rise of Military AI Startups: Transforming Defense Tech

Artificial intelligence (AI) is playing a transformative role in the defense tech landscape, with numerous startups developing innovative solutions for security applications.

• Helsing's $487 million fundraise in 2024 highlights the growing interest in AI-powered defense solutions.
• AI startups are developing advanced technologies for threat detection, target identification, and autonomous systems.
• These innovations are poised to significantly enhance defense capabilities and reshape the future of warfare.

The Future of Defense Tech: A Focus on Security and Innovation

The defense tech sector is expected to continue its rapid growth, driven by a growing demand for innovative security solutions in response to emerging threats.

• VC funding is likely to remain robust, supporting the development of cutting-edge technologies and the emergence of new startups.
• The focus on national security will continue to drive investment in defense tech, particularly in areas like cybersecurity, autonomous systems, and advanced weaponry.
• Europe's defense tech sector is well-positioned to become a global leader in innovation, driving the development of next-generation security solutions.