Increased investment in European defence startups

Donald Trump’s potential return to the White House has led to a surge in investment in defense technology startups across Europe, according to eight prominent industry executives and investors.

Trump’s unpredictability, coupled with ongoing conflicts in Ukraine and the Middle East, has helped global military spending reach a record $2.4 trillion by 2023.

European defense efforts

In June, the NATO Innovation Fund (NIF) announced partnerships with venture capital firms and defense startups across Europe, with the aim of enhancing security on the continent. The European Union also unveiled its first-ever defense industrial strategy, pledging more than $1 billion for military innovation. These initiatives are partly driven by the prospect of a Trump presidency.

Munich-based Vsquared Ventures is one of Europe’s leading deep-tech venture capital firms and recently raised a €214 million ($237.99 million) fund to invest in space, robotics and other technologies. “Trump’s threats have made European countries think very differently about investing in their own capabilities and awarding contracts, often to startups,” said Herbert Mangesius, co-founder of Vsquared.

Startups benefit from more investment

Vsquared’s portfolio includes IQM, one of Europe’s leading quantum computing companies, and Isar Aerospace, a missile manufacturer that has itself raised over €400 million in private capital. Other defense tech startups, such as ARX Robotics, a German startup that builds autonomous robots, are also benefiting from increased investment.

Defence and security spending across Europe has increased by 16% since 2022 to €552 billion, according to data from SIPRI. German Finance Minister Christian Lindner told Reuters in February that Germany was easing red tape on investments in defence companies, as Berlin ramps up its military spending.

Main fast food

• the maybe Trump’s return has led to increased investment in defense technology startups across Europe.
• European defence spending has risen by 16% to €552 billion since 2022, as Germany eases red tape on investments in defence companies.

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