PARIS — Venture capital flowing into European defense technology startups will shatter records this year, with projections of $10.5 billion in total funding, a fourfold leap from the $2.6 billion raised in 2025.
Dealroom, which tracks venture capital data, attributes the surge to heavy investment in drone and autonomous systems companies. The firm published its annual State of Defence Tech report Monday alongside Resilience Media.
Funding had already hit $7.4 billion by Sept. 20, powered largely by mega rounds secured by German firms Helsing and Quantum Systems. A year earlier, European defense startups had managed just $1.5 billion through the same period.
Meanwhile, Europe keeps claiming a larger slice of global defense-tech investment. The European Union captured 21% of all defense startup funding through September, up from 15% last year. The United States dropped to 75%, its smallest share ever recorded.
“This is Europe catching up rather than the U.S. slowing,” Dealroom noted. “EU 27 funding more than doubled in a year.”
Mega rounds accounted for more than 85% of venture capital invested in European defense startups this year. Helsing closed a $1.8 billion Series E in July, marking the continent’s largest defense startup round. German startups have set every European defense-tech venture funding record since 2023.
Across NATO countries collectively, defense startups raised $27.1 billion so far in 2026, already surpassing the $14.5 billion total for all of 2025. Dealroom forecasts that figure will reach $38.5 billion by December’s end.
Drones and autonomous systems dominate Europe’s funding priorities. That segment absorbed 74% of EU investment and 77% in the United Kingdom, versus 57% in the United States. Notable recipients include Helsing, Quantum Systems, Stark, France’s Harmattan AI, and Cambridge Aerospace in the U.K.
Unmanned aerial vehicles pulled in $4.7 billion through September. Earth observation and satellite imagery followed with $1.8 billion, while anti-drone solutions and launch vehicles each secured $1.2 billion. Maritime robotics brought in $796 million.
Ground robotics lags considerably, with European startups in that category raising just $77.6 million this year.
Germany leads European nations with $3.5 billion in defense venture funding, ahead of Finland’s $1.2 billion, the U.K.’s $932 million, and France’s $376 million. Munich stands as the continent’s defense-tech hub, attracting $3 billion through Sept. 20.
Defense now ranks as Europe’s fastest-growing startup sector, accounting for 15% of overall EU venture capital funding, up from 6.2% a year earlier. Total private investment in NATO defense startups, including private equity, debt, and grants, should hit $42.7 billion, more than double last year’s $16.9 billion.
