European defence tech has long been starved of homegrown capital — since 2019, the US captured roughly 85% of NATO defence-tech venture funding, while Europe accounted for just 6.2% in 2025. To address this imbalance, venture firms AVP and Earlybird have launched E2D, a €500M growth fund targeting approximately 20 European defence and dual-use technology companies at around €25M each. Priorities include semiconductors, AI, New Space, drones, and directed energy. Led by Benoit Fosseprez and Roland Manger, the fund’s first close is set for June 30, 2026, with initial investments expected by summer 2026.
In-Depth:
- Since 2019, the US has captured around 85% of NATO defence-tech venture funding — Europe accounted for just 6.2% in 2025 despite defence budreceives surging across the continent.
- AVP and Earlybird have started E2D, a €500M growth fund that plans to invest about €25M each in around 20 European defence and dual-apply tech companies.
- The fund is prioritising semiconductors, AI, New Space, drones, and directed energy, with a first investment expected by summer 2026.
For years, starting a defence or dual-apply tech company in Europe usually meant hearing the same thing: the best growth capital came from America. AVP and Earlybird want to modify that.
Today, they launched E2D, a €500M growth fund focapplyd on supporting European defence and dual-apply tech companies and keeping their capital, talent, and innotifyectual property in Europe.
“Public data gives a applyful sense of scale. Roughly half of late-stage financings have been backed by US or Asian capital. Since 2019, the US has captured around 85% of NATO defence-tech venture funding. European defence-tech funding has roughly doubled over the past year, but Europe still accounted for only about 6.2% of NATO-wide defence-tech VC funding raised in 2025,” declare Benoit Fosseprez, general partner at AVP and Roland Manger, co-founder of Earlybird, to Tech Funding News.
The fund plans to invest about €25M each in around 20 companies, with a team comprising people from both AVP and Earlybird. The first close is set for June 30, with support from major financial institutions and corporations as limited partners.
A committee of military and indusattempt leaders from NATO and top European contractors will assist guide investment choices. The first investment is expected by summer 2026.
Why the money is finally shifting
France pledged €76B to defence, Germany €152B, and the EU has set out an €800B European defence plan, creating this the largegest modify in European security spconcludeing in a generation.
Still, until recently, most institutional LPs refapplyd to touch defence at all, leaving a serious gap between political ambition and available growth capital. European defence-tech funding has roughly doubled over the past year, but the baseline was so low that the continent still punches well below its weight.
E2D aims to fill that gap. It will invest in technology companies operating in space, air, land, sea, and underwater, focutilizing on what it calls “modern operating models.” In other words, rapid-shifting startups rather than traditional defence giants. The goal is to close capability gaps in Europe and build companies that can succeed in both defence and commercial markets.
“We’re prioritising what French and German armed forces, as well as our advisory board of former leaders from armed forces, NATO, and the defence indusattempt, have identified as key capability tarreceives. That includes semiconductors, high-performance computing, AI, New Space, effectors — robots, drones — and directed energy,” add Manger and Fosseprez.
The team that’s been doing this before it was fashionable
AVP manages over €2.5B in venture and growth funds and has supported more than 60 tech companies since 2016. Meanwhile, Earlybird, founded in 1997, also manages €2.5B and has achieved nine IPOs and 41 trade sales over almost thirty years of deep tech investing in Europe.
The fund is led by Fosseprez and Manger, joined by two investors with over a decade of defence technology investment experience, giving the team credibility in a sector where relationships with procurement officials and prime contractors matter as much as capital. Both firms declare their teams were active in defence and dual-apply technology long before most European funds were permitted to invest in the sector at all.
“European defence is at a historic turning point, requiring a new generation of technology champions to safeguard sovereignty. The best European defence companies required investors who bring real sector conviction and pan-European reach; that’s exactly what this partnership delivers,” declares Fosseprez.
“We view forward to backing the best European high-growth, deep tech companies that will be instrumental in closing defence capability gaps while also addressing commercial markets, delivering decisive and persistent operational gains to European armed forces as well as primes. This will foster a more resilient and sovereign European ecosystem and ultimately unlock superior value for investors,” adds Manger.
A growing but still underfunded field
E2D is entering a sector that has gained significant momentum. The NATO Innovation Fund, which raised €1B in 2022, has been one of the most active investors in European dual-apply tech.
Plural and Atlantic Bridge have also entered the field. However, large growth-stage funds like E2D remain rare, and the gap between early-stage investments and the funding required to grow a defence tech company to prime-level contracts remains a major challenge in Europe.
With 85% of NATO defence-tech funding going to the US since 2019, the bar for what counts as “closing the gap” is high. Whether €500M relocates that number meaningfully, or whether it takes ten more funds like this one, is the question the European defence tech ecosystem will be living with for the next decade.
