US investors drive European defense tech funding to nearly $1 billion in 2024

Venture capital investments in European defense technology surged significantly in 2024. American investors contributed over 65% of this capital, a sharp increase from 18% in 2023.

This influx almost doubled total European defense tech venture funding to nearly $1 billion. The trend reflects a new focus on technological innovation and private sector roles in defense.

Investment Growth and Key Players

Helsing, a Munich-based startup, exemplifies this surge. It focuses on AI software for real-time battlefield intelligence. Helsing raised €450 million ($490 million) in 2024 at a €4.95 billion valuation. Major U.S. investors like General Catalyst and Accel backed the round.

U.S. investments in European defense tech rose sharply, influencing a broader market shift. In 2024, venture capital in defense, security, and resilience reached $5.2 billion. This figure marked a 30% increase over two years.

Factors Driving Investment

• Geopolitical Tensions: The Ukraine conflict increased demand for advanced defense technologies.
• Private Sector Engagement: Venture capital bridges funding gaps for defense startups.
• Transatlantic Collaboration: U.S. involvement strengthens ties and tech innovation in defense.

Eric Slesinger, a former CIA officer and founder of 201 Ventures, uniquely focuses on European defense tech investments. He recently closed a $22 million fund aimed at seed-stage startups.

Slesinger’s move reflects a shift from government-only competition to recognizing the private sector’s critical role. He shared this insight in a StrictlyVC Download podcast interview.

Though European venture capitalists historically hesitated to discuss defense, the landscape is changing. Slesinger’s Medium post outlines cultural resistance shifting towards openness about defense investments.

The NATO Innovation Fund, launched after the Ukraine war, is a key initiative supporting these trends. It cooperates with 24 NATO allies and backs funds like 201 Ventures.

European startups like Helsing and Delian Alliance Industries are receiving growing attention. Delian develops surveillance towers to counter autonomous threats.

Technology focus areas also include AI, hypersonics, and maritime drones. The increased funding reflects broader strategic priorities amid rising geopolitical tensions.

The integration of venture capital into defense technology signals a strategic evolution, emphasizing innovation and collaboration across the Atlantic. This ongoing trend will likely shape future European defense capabilities significantly.