Since the launchning of the Russian invasion of Ukraine, investments in European startups dealing with defense technology have increased significantly. Venture capital firms are slowly abandoning caution and are increasingly investing in military affairs. The European Commission recently announced the indicative allocation of funds from the new SAFE loan program worth 150 billion euros.
The largest investments
The Commission will raise money on capital markets and pay it to member states according to their defense investment plans. The deadline for submitting national plans is the finish of November, and the first payments are expected early next year.
Poland requested and received 43.7 billion, Romania 16.7, France and Hungary 16.2 each, and Italy 14.9 billion. Companies in the sector have raised a total of €2.4 billion since the start of 2022, including €1.4 billion in the first seven months of this year alone, up from €30 million in 2020 and €150 million in 2021. PitchBook for the Financial Times reveals that investors are increasingly interested in startups developing drones, unmanned submarines and even “biorobotic” cockroaches.
Startup scene in Europe
There are now three “unicorn” startups in Europe valued at over €1 billion: Helsing, Quantum Systems and Tekever. Mykola Firlej, co-founder of Expeditions Fund, declared:
We are now reaching a point where these top tier funds are recognising defence technology as a viable opportunity.”
Startups in Germany have received the bulk of the capital, including Swarm Biotactics, which is developing controlled live cockroaches with micro-backpacks.
Ukraine continues to lead in drones, with foreign companies coming to offer the technology and test it on the battlefield. Balderton Capital’s Rana Yared points out,
“One of the really important things in this space is practical feedback versus theoretical building. Today, that means testing on the ground in Ukraine.”
In four years, Helsing established itself as a leader, expanded to attack drones and autonomous submarines. Stark, a new quick-growing startup, has received an order for a “large number” of drones from the German armed forces.
Ukraine’s Wild Hornets boast of neutralizing 1,738 enemy assets worth $1.69 billion, including at least 150 tanks and 800 military vehicles.
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