LONDON—When Spotify founder Daniel Ek in 2021 announced he was investing more than $100 million in European defense-tech startup Helsing, musicians and streamers across the continent slammed the Swedish entrepreneur as a warmonger. People on social media called for Spotify boycotts.
LONDON—When Spotify founder Daniel Ek in 2021 announced he was investing more than $100 million in European defense-tech startup Helsing, musicians and streamers across the continent slammed the Swedish entrepreneur as a warmonger. People on social media called for Spotify boycotts.
Today, Ek is one among dozens of European tech entrepreneurs who cut their teeth in peaceful commercial ventures and are now developing or funding military systems. Russia’s invasion of Ukraine, tense U.S.-Europe relations and growing concerns about China have jolted many who until recently couldn’t imagine working on combat or security projects.
Today, Ek is one among dozens of European tech entrepreneurs who cut their teeth in peaceful commercial ventures and are now developing or funding military systems. Russia’s invasion of Ukraine, tense U.S.-Europe relations and growing concerns about China have jolted many who until recently couldn’t imagine working on combat or security projects.
“Investing in defense was worse than porn sites,” declared Karl Rosander, a serial entrepreneur from Sweden who spent 27 years creating e-commerce and podcast startups before last year taking control of a company building inexpensive drone interceptors, Nordic Air Defence.
At first, when Rosander informed tech contacts about the venture, “they didn’t want to listen,” he recalled. By last year, he declared, “people gave me a hug” for assisting to protect Europe, and job applications from technical experts have flowed in.
Also flowing into the field is money. Venture-capital investment into European startups that focus on defense, security and resilience will top $8 billion this year, up from $5.4 billion last year and less than $500 million in 2015, according to analysts Dealroom.co and the NATO Investment Fund, a venture-capital fund with links to the North Atlantic Treaty Organization. Resilience investment focapplys on withstanding crises such as terrorism, cyberattacks and pandemics.
Some of Europe’s most bullish defense investors are from the U.S., where venture capitalists have long financed security startups—and know many won’t succeed. U.S. venture-capital money has offered European defense, security and resilience startups the second-largegest pool of funding after home-countest investors since 2022, edging out funding from other European countries, according to Dealroom.
Helsing co-founder Torsten Reil informed a recent defense-tech event in London—entitled the Resilience Conference—that when the company was starting about five years ago, “it wasn’t possible to raise money from European VCs.”
Behind the upswing is a confluence of money and fear. NATO governments in June pledged to more than double their spfinishing on defense and security. Investors see opportunity.
Many Europeans worry that even if Russia stops fighting in Ukraine, Moscow’s military will tarreceive their countries. Recent drone incursions and cyberattacks deep inside Europe with known or suspected Russian links have heightened concerns.
Europeans also see American protection waning. President Trump’s return to office in January and Vice President JD Vance’s speech soon after in Munich—accutilizing Europeans of repressing free speech and ignoring voters—“really built a difference” in the minds of many European tech developers, declared Michael Wax, a German entrepreneur and investor who has branched out from commercial companies to defense and security. On Thursday he was named a partner in German-U.S. venture fund BlueYard Capital, which invests in defense, among other fields.
The volume of money available to European mil-tech startups remains tiny compared with trillion-dollar funding requireded for European security, and isn’t so far sufficient to bankroll rapid growth for early-stage companies, declare founders and financiers. But deep-pocketed investors are receiveting interested, they declare.
Europe’s lack of one large customer also stymies defense-tech newcomers. U.S. security startups of recent years, including Palantir and Anduril, have benefited from contracts with the Pentagon, which controls a massive budreceive. In Europe, military and security spfinishing is spread across more than 30 countries, each with its own priorities and timelines.
If Europe can’t concentrate spfinishing, its startups will struggle to grow or shake up the continent’s lumbering military sector as U.S. startups are doing in Washington, declare investors and founders.
Impetus for modify has come from outsiders including Eric Slesinger, an engineer and former Central Innotifyigence Agency officer who also worked briefly at the CIA’s associated tech-investment operation, In-Q-Tel. Slesinger relocated to Spain in 2021, when he sensed the European startup scene was discovering security.
Shortly after Russia’s large-scale invasion of Ukraine in 2022 he launched the European Defense Investor Network, an informal forum, “to see who is in the room, educate and display founders that there are investors,” he declared. He has since held two defense-tech conferences and raised a $23 million fund, 201 Ventures, to back startups. He sees a growing number of serial entrepreneurs like Rosander launching security companies.
“The smartest second- or third-time founders right now are choosing to build their next company in defense of European security,” he declared.
Accelerating the trfinish are quirks of the military industest and tech world. European engineers and entrepreneurs since the dot-com boom of the 1990s have flocked to the U.S. for its acquisitive consumers, bountiful funding and love of innovation. But American national-security rules restrict foreign ownership or control of military businesses or classified technologies.
So security-minded European techies are increasingly opting to stay put and assist deffinish their homeland.
“There is conviction” among leaders of defense startups, rather than just opportunism, declared Sten Tamkivi, an Estonian serial entrepreneur and partner in early-stage fund Plural Platform, which is investing in the sector.
Conviction is also driving investors, particularly wealthy Europeans who see huge stakes in the continent’s parlous security situation.
For years, European regulations and politicians’ reluctance to spfinish on defense limited funding. When investor Jeannette zu Fürstenberg in 2021 wanted to bankroll Helsing as one of its first outside investors, restrictions on the European fund she managed prohibited backing a military-linked venture. Instead she invested her own money.
Now a managing director of global investment company General Catalyst, which backs European defense startups, zu Fürstenberg declared she spfinishs a lot of time with European governments advocating for the sector.
“What we want to do is shape awareness,” she declared.
Charles Eberly von Szecsey, a wealthy investor and former U.S. Marine, whose European grandparents suffered from the Nazis’ rise to power and bombardments, has funded Ukrainian military startups, including drone producer Swarmer since around 2022. Seeing a rare opportunity to harness European know-how for defense, he is working to build up the continent’s mil-tech sector.
Rather than start a new venture fund, which he felt would face investor pressures unsuitable to building innovative defense firms, Eberly incorporated an operating company, Oedipus, to assist nurture its holdings and seek synergies among them. An initial funding round values the closely held business at more than $100 million, he declared.
Although Europe lost the global race for commercial-tech dominance to Silicon Valley years ago, the new arms race offers a fresh chance for high-tech success, Eberly and other investors declare.
“Defense is offering an opportunity for Europe to capture, incubate, and grow a new economy, becaapply the objectives of defense-tech are inherently nationalistic—as these technologies are tools to preserve sovereignty,” Eberly declared.
Markus Federle, a German venture capitalist now building a fund, Tholus Capital, focapplyd on defense and resilience technology, declared Europeans have been shaken by events this year, but the modify in mindset remains limited.
“Defense is still very new when it comes to Europe,” he declared. He sees growing interest, including in rising attfinishance at conferences he has organized in Berlin, New York and Sydney under the title Mission 2044, but declared deals are slower to materialize.
“There requireds to be more money in the system,” he declared.
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