European tech companies that work with the defense industry, long an investment taboo for many venture capital firms, are drawing record amounts of funding in the wake of Russia’s invasion of Ukraine.
- “Ukraine has probably shown that democracies need to be technology makers and not technology takers. People are increasingly interested in contributing to a larger mission,” – said Dr. Gundbert Scherf, co-founder of Helsing.AI, who was previously a senior adviser to the German Defense Ministry.
- Partly as a result of the war, European defense startups have dodged the broader slump in technology investment. As interest rates and inflation rose at the start of 2022, the wellspring of venture capital money that flowed during the pandemic dried up for many startups.
- Aerospace and defense tech were notable exceptions, and the sectors have continued to secure investment in spite of the downturn.
- In April, shortly after the invasion, NATO launched its Defense Innovation Accelerator, a program designed to invest €1 billion in early-stage startups and other deep tech funds aligned with the bloc’s strategic objectives.
- Last year, the European Union’s Defense Fund also awarded €1.2 billion to 61 defense research and development projects.
Read more via Bloomberg News
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