The trenches, and I say right away: unfortunately, change before politics. While in Brussels they are still discussing budgets and strategies, in the European laboratories the war of the future is already being fought. The continent's defense startups have attracted record investments in 2024, even surpassing the traditional tech sector. A phenomenon that has not gone unnoticed by NATO, which has put a billion euros on the table to finance the best innovations. The result? A generation of entrepreneurs who develop dual-use technologies, usable for both civilian and military purposes, revolutionizing a sector traditionally dominated by century-old multinationals. It is always bad to know that to see innovations we will first have to go through their defensive, or worse offensive, use, but it is the reality, and we have the sometimes thankless (but necessary) task of telling this too.
The billion-dollar boom in European defense
The numbers speak clearly: The European defence, security and resilience sector reached an all-time high of $5,2 billion in 2024, registering a 30% increase in the last two years. A growth that contrasts sharply with the Traditional venture capital investment drops 45% during the same period.
The phenomenon is not accidental. Europe has decided that technological dependence on the United States represents an unacceptable strategic risk (and this is a good thing) by establishing that Russia is a “long-term enemy” (honestly, I take responsibility for my opinions, a terrible economic and strategic choice to make a break with Eurasia, but they are opinions. Hoping that this approach does not lead us to war, which would no longer be an opinion, but an objective catastrophe). The European Commission has launched the first defence industrial strategy with a budget of 1,5 billion euros until 2027, while NATO Innovation Fund invests directly in early stage startups specialized in deep tech.
To put it briefly, defense startups will no longer be born in Californian “garages,” but in laboratories in Berlin, London, and Amsterdam. A paradigm shift that could reshape global geopolitical balances.
How new smart weapons are born
We take Helsinki, the Berlin startup founded in 2021 that has already raised around 1,36 billion euros. Its founders do not come from the traditional war industry, but from the world of artificial intelligence. Their philosophy is simple: apply the most advanced algorithms to defense systems, creating software that integrates with new and existing hardware.
Their software-first approach turns traditional logic on its head. Instead of designing the weapon first and then the control system, they start from artificial intelligence to build solutions that can adapt to any platform. A bit like if Netflix decided to enter the home appliance market: not by building TVs, but by creating the software that makes them smart.
The difference is that here we are talking about autonomous drones, unmanned underwater vehicles e surveillance systems that process terabytes of data in real time. Technologies that, it must be said, could easily find application in civil fields such as urban logistics or environmental monitoring.
Defense Startups Changing the Rules
Arondite, based in London, develops the software infrastructure that allows autonomous systems to communicate with each other. Founded in 2023, they have already raised €10,5 million to create what they call the “nervous system” of future military operations. Their technology allows drones, ground robots and naval systems to coordinate autonomously, while always keeping humans in final control of decisions.
It comes from Holland Avalor AI, specializing in multi-domain autonomy. Their Nexus system enables unmanned vehicles to operate simultaneously in the air, on land, and at sea, planning and executing complex missions with minimal human intervention. Imagine a swarm of drones operating in coordination with autonomous land robots and submarines: yesterday's science fiction, today's operational reality.
Origin Robotics, from Latvia, has developed BEAK, a portable precision weapon system with a 15-kilometer range and resistance to electronic jamming. But the real innovation is BLAZE, an autonomous interceptor powered by artificial intelligence designed to neutralize other drones. Low cost, high effectiveness: the democratization of air defense.
Defense Startups, A Bad Trend: The Militarization of Civilian Technologies
What makes these defense startups unique is their dual-use approach. NEXSTUN, from France, developed theE-Stunglove, a non-lethal (but creepy, if you ask me) electric glove for law enforcement. A technology that could easily be used for private security, crowd control, or personal self-defense.
Horace, also from Paris, uses artificial intelligence to analyze video streams in real time, identifying suspicious behavior and threats. Their system, fully GDPR compliant, can be used for urban surveillance as well as border monitoring or fire detection.
This convergence between civilian and military is not accidental. As I pointed out some time ago, the traditional advantage of military technologies is diminishing. Open innovation in the civilian sector is accelerating the development of solutions that once required years of secret research.
The Real Money Behind the Arms Race
Il NATO Innovation Fund is not limited to direct investments. It has also financed specialized venture capital funds such as OTB Ventures, Vsquared Ventures e Alpine Space Ventures. A two-tier strategy that allows to cover the entire spectrum of innovation, from the most embryonic ideas to market-ready scale-ups.
Italy contributes approximately 80 million euros to the NATO fund, one of the most significant shares among the 24 member countries. It is significant that Roberto Cingolani, CEO of Leonardo, sits on the fund's board of directors: a sign that even traditional giants have understood that the future lies with startups.
Roark Aerospace, from London, operates one of the largest global networks for drone detection and hyperspectral imaging. It has raised €57,6 million to develop its Plexus AI system, which combines frequency scanning, decryption and Doppler shift analysis to track even the most evasive drones.
When war becomes a video game
The most disturbing (and fascinating) aspect is how these defense startups are gamifying warfare. Command AI, from Paris, has developed Prevail, a platform that transforms battle data into video game-like simulations. Operators can generate mission plans in minutes, analyze complex tactical situations, and adapt strategies on the fly using reinforcement learning models.
An approach that is very reminiscent of civilian flight simulators, but applied to real combat scenarios. The line between training and actual operations becomes thinner when the interface is the same.
Unmanned Defense Systems, from Lithuania, produces the FORECASTER drone for intelligence and surveillance and AVENGER 5 for deep-strike missions. Their SwarmC2 software allows to coordinate swarms of drones, re-target in real time and integrate with existing defense systems. All managed by an intuitive interface that masks the underlying technological complexity.
The future is already in the trenches
The technologies developed by these defense startups do not remain in the labs. Many have already been field-tested in Ukraine, providing valuable feedback for improvements and new developments.
War has accelerated innovation cycles that would normally take years. China’s militarized DJI civilian drones have demonstrated the effectiveness of the commercial-to-military approach. Now Europe wants to replicate that success with proprietary technologies.
The risk, of course, is that every defense innovation also accelerates offensive capabilities. But this is the intrinsic nature of technological progress in the military: every shield generates a new spear, every protection stimulates the development of a more sophisticated threat.
Defense Startups: An Ecosystem That Grows Despite Everything
Despite the ethical implications, the European defense startup sector is showing impressive vitality. Monaco has emerged as Europe's leading venture capital hub for this segment in 2024, while Germany leads with 36 companies in the top 100 of the most promising European tech startups.
Europe has finally found its way to strategic autonomy. Not through protectionism or subsidies to national champions, but by creating an innovation ecosystem that attracts the best talent and the most patient capital. I really hope I'm proven wrong, because deep down I don't really believe it, but as long as human beings exist, there will be conflicts. And as long as there are conflicts, someone will develop technologies to manage them better.
At least this time, if we really want to find a positive aspect, Europe has decided not to be a spectator.
