Venture capital flooding into European defence startups has already reached $7.4 billion in 2026, putting the sector on track to quadruple last year’s total. Dealroom now projects the figure will hit roughly $10.5 billion by December.
That projection comes from the latest State of Defence Tech report, produced with Resilience Media and presented Monday at the Resilience Conference in London. The momentum reflects a broader shift across European venture capital where defence has nearly tripled its share of all VC funding in a single year, climbing from 4% in 2025 to 11.1% today.
Defence also remains the continent’s fastest-growing category. Dealroom expects 309% growth this year, outpacing space at 284% and robotics at 263%. Overall European VC, by comparison, should grow just 38%.
Two Munich companies drove much of Germany’s dominance. Helsing closed a $1.8 billion round in July at an $18 billion valuation. Weeks earlier, drone maker Quantum Systems landed $1.2 billion at an $8 billion valuation. Those deals set consecutive records for European defence tech.
Germany leads all European countries with $3.5 billion raised this year. Finland follows at $1.2 billion, while the UK sits at $932 million. Meanwhile, drones have attracted $4.7 billion across 40 European rounds. Anti-drone technology pulled in another $1.2 billion, and maritime robotics added roughly $800 million.
Across NATO and allied nations, defence startups have secured $27.1 billion so far in 2026, nearly double last year’s full total. US companies account for 75% of that capital, though the EU’s share climbed from 15% to 21%.
Exits, however, remain scarce. Outside the US, only London-based Arqit appears among the ten largest defence tech exits ever. Bessemer Venture Partners’ Alex Ferrara credits that gap to a structural problem: too few strategic buyers. “In defense tech there are only a tiny number of strategic acquirers,” he noted. “This is both the opportunity and the challenge.”
The capital is clearly available. Converting that funding into actual military procurement contracts now stands as the sector’s defining test.
