Europe's Defense Tech Startups Attract Surge of Venture Capital Funding

In the wake of Russia's full-scale invasion of Ukraine in 2022, investment in Europe's booming defense technology startups has surged. According to data compiled for the Financial Times, companies in the sector have raised €2.4 billion since the start of 2022, including €1.4 billion in the first seven months of this year alone. This marks a significant increase from just €30 million in 2020 and €150 million in 2021.

The figures reflect a growing appetite among venture capital firms for the wave of new companies developing cutting-edge military technologies, from unmanned mini-submarines and autonomous drones to "bio-robotic" cockroaches. Europe now boasts three defense startups with a "unicorn" valuation of more than €1 billion: drone makers Helsing, Quantum Systems, and Tekever.

Investors have been particularly drawn to German startups, with the country emerging as the biggest supplier of military support to Ukraine after the United States. Prominent German players like Helsing have secured the lion's share of funding, but money has also flowed into other companies, including Swarm Biotactics, which is developing controllable living cockroaches equipped with micro-backpacks for covert surveillance.

The UK has also started to attract more attention, with several startups, including Tekever and attack drone maker Stark, committing to set up manufacturing facilities in the country. As the defense tech ecosystem continues to evolve, the companies likely to emerge as winners are those that can leverage practical battlefield experience, such as the ability to test their technologies in Ukraine.