Funding focus is a brand new collection analysing money circulation into the European tech ecosystem. Final week, we regarded on the largest funding rounds in fusion power this 12 months, and now we’re honing in on Europe’s booming defence tech enviornment.
Europe’s defence tech startups secured $971mn in funding within the first half of this 12 months, as VCs look to capitalise on the continent’s push to rearm amid heightened geopolitical tensions.
Funding in H1 2025 has already shot previous the entire of 2024 — the earlier report 12 months — which noticed defence startups elevate $605mn, based on Dealroom information. German startups led the cost, elevating $881mn — 90% of Europe’s whole defence tech investments.
Munich-based Helsing took the lion’s share. In June, the startup secured a whopping €600mn ($660mn) in Europe’s largest funding spherical of the 12 months so far. The deal, led by Spotify CEO Daniel Ek’s VC agency Prima Materia, valued Helsing at €12bn ($13.2bn), making it one of many continent’s most beneficial personal firms.
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Based in 2021, Helsing develops AI software program for weapons, automobiles, and navy technique. Its tech has been built-in into battlefield simulations, digital warfare for fighter jets, and drones in Ukraine. The corporate additionally just lately unveiled plans for a fleet of autonomous reconnaissance submarines to spice up Europe’s maritime defences.
The 12 months’s second largest money injection went to a different German firm — Quantum Programs, which raised €160mn ($176mn) at a valuation north of €1bn ($1.1bn).
Quantum Programs builds electrical, AI-powered autonomous surveillance drones which are dual-use, which means they’ll serve each navy and civil functions.
Defence forces can use the unmanned aerial automobiles (UAVs) to spy on enemies and collect intel. The drones will also be utilized by farmers to examine their crops, by power firms to test energy strains, and by search and rescue groups to search for survivors.
The third largest spherical additionally went to a German firm: ARX Robotics, headquartered close to Munich, which bagged €31mn ($34mn) in April to increase its fleet of autonomous land drones. The spherical got here shortly after ARX introduced plans to take a position £45mn ($58mn) right into a new UK manufacturing facility.
ARX’s machines drive round on treads and may be fitted with tools corresponding to radar, mine-sweeping units, or medical stretchers. The biggest carries navy payloads weighing as much as 500kg — together with injured troopers — throughout the battlefield.
Different notable defence tech offers this 12 months embody a $20mn spherical for Britain’s Skyral — a startup based by former Prime Minister Tony Blair’s son, Nick. The corporate is creating navy simulation tech for the British Military and NATO. One other German enterprise additionally received a giant funding increase: Swarm Biotactics. The startup raised €10mn ($11mn) to advance its uncommon biorobotic system, which equips reside cockroaches with sensors to observe excessive environments.
The investments come amid a broader defence tech growth in Europe, with governments turning to applied sciences like drones, submarines, and AI-based weaponry.
Kate Leaman, chief market analyst at on-line dealer AvaTrade, beforehand instructed TNW that navy tech firms have “enormous potential” for progress — significantly these with AI-driven options.
“We’re already seeing a shake-up within the defence sector, with AI-focused gamers like Palantir outperforming extra conventional defence giants,” Leaman mentioned. “This means that cutting-edge, tech-centric corporations might presumably seize a sizeable share of the market.”
