European Defense Tech Investment Soars Amid Ukraine War, Reaching $1B in 2024
Surging VC Funding in Defense and Dual-Use Technologies
Venture capital investment in European defense technology is set to hit a historic milestone in 2024, with $1 billion flowing into the sector—a fivefold increase since 2018. This dramatic growth comes as geopolitical tensions escalate following Russia’s invasion of Ukraine, driving unprecedented interest in defense innovation.
Key Investment Trends
- NATO countries lead the charge: Defense tech investment now outpaces other sectors by 25%, totaling $3 billion since 2018
- Germany emerges as a powerhouse: German startups have raised more than Nordic, Dutch, Swiss, and UK firms combined
- Munich tops European cities: Largely due to Helsing’s $487M funding round for battlefield AI solutions
- UK’s “Silicon South West” shines: Bristol ranks second, with London, Reading, Oxford, Leeds, and Cambridge all in the top 10
The European Defense Tech Landscape
According to Dealroom’s State of Defence Investment 2024 report presented at the Resilience Conference:
- 370 VC-backed defense startups now operate across NATO countries
- $161 billion combined enterprise value for these companies
- 1.8% of total European VC funding now goes to defense tech (triple 2022 levels)
Dual-Use Technologies Gain Momentum
Investors are particularly interested in dual-use technologies that serve both civilian and military purposes. Jeannette zu Fürstenberg, Managing Director at General Catalyst, notes:
“By leveraging AI, we can enhance defense capabilities while developing technologies with applications for critical national infrastructure. Our mission is to protect democracies and build resilience.”
The US Influence on European Defense Tech
While Europe’s defense tech sector grows rapidly, the US still dominates:
- 83% of global VC defense investment goes to American firms
- US investors provided 66% of capital for European defense startups in 2024
- $18 billion total raised by defense startups in NATO countries and allies
This shifting investment landscape signals a new era for European defense innovation, with technology playing an increasingly vital role in national security strategies across the continent.
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