In Europe, defence has historically been a taboo space for VCs.
The explanations are many — much less of a coordinated regional army agenda, restrictions placed on VCs by their buyers and the problem for pure defence startups to get traction of their early days.
However European governments are ramping up spending on defence towards the backdrop of the battle in Ukraine and nations just like the UK are setting army procurement targets particularly from SMEs. And extra VCs have their eye on defence tech.
? Learn extra: How battle in Europe is making VCs chunk the bullet and again defence tech
Sifted spoke to trade insiders and crunched the numbers on latest offers to search out out who the foremost buyers are in European defence startups and which VCs have began to take a position. On condition that the UK has attracted probably the most safety funding within the area, it’s maybe not shocking that almost all of those buyers are based mostly within the UK.
We additionally listed the extra generalist buyers who’ve a document of defence investments.
That is an up to date checklist from February 6, however for those who nonetheless suppose we’re lacking anybody, please attain out to [email protected].
Self-identified defence buyers
MD One Ventures (London)
MD One invests in early-stage corporations engaged on nationwide safety innovation throughout Europe and Israel. Sectors embody cybersecurity, robotics, area and life sciences.
Offset Ventures (London)
Based in 2021, Offset Ventures is an early-stage enterprise capital agency based mostly in London. It invests in European dual-use and defence know-how in areas comparable to area, autonomous techniques and defence AI.
Metrea Discovery (London)
Based in 2022, Metrea Discovery is an investor and enterprise builder with a concentrate on nationwide safety tech and defence tech.
In-Q-Tel (World)
The worldwide investor — with greater than 200 staff — has a major workplace in London and is, in numbers of investments, probably the most frequent defence investor in Europe, in keeping with Sifted sources.
Gallos Applied sciences (London) NEW
The UK funding agency and firm builder was based in 2021 and focuses on early-stage defence and safety startups. The VC has invested in UK defence startup Second Entrance Techniques.
Paladin Capital (World) NEW
A world VC based in 2001 with over $1bn in dedicated capital with a particular concentrate on cyber safety. Workplaces in London and Luxembourg.
Defence accelerators and authorities initiatives
Starburst Aerospace (Paris)
Starburst is a world aerospace and defence startup accelerator and strategic advisory agency, in addition to an investor. Based in Paris, it has expanded to Los Angeles, Munich, Singapore, Seoul, Tel Aviv and Madrid.
NSSIF (London)
The Nationwide Safety Strategic Funding Fund (NSSIF) is the UK authorities’s enterprise arm for dual-use applied sciences. It’s a joint initiative between HM Authorities and the British Enterprise Financial institution. NSSIF invests alongside different buyers.
Smart Guys Cyber (Tallinn)
One in all Startup Smart Guys’ early-stage fund and accelerator programmes, Smart Guys Cyber focuses on early-stage defence and cyber startups in Europe. It runs accelerator programmes in several components of Europe.
Definvest (Paris) NEW
A part of the French authorities financial institution Bpifrance, Definvest focuses on investments in defence and safety startups that are strategic for the French armed forces.
? Learn extra: Russian battle prompts emotional defence tech rise in CEE
Current VC entrants in defence tech
Prima Materia (Stockholm)
Prima Materia was arrange by Spotify founder Daniel Ek in 2020, with the aim to take a position €1bn of his fortune in European deeptech ”moonshot initiatives”. Up to now it has invested within the German defence tech startup Helsing.
Venture A (Berlin)
Venture A Ventures focuses on early-stage B2B startups however it has additionally began to put money into dual-use defence know-how. German drone producer and operator Quantum Techniques is one funding on this area.
Air Avenue Capital (London)
UK-based investor Air Avenue Capital is concentrated on backing AI and has just lately additionally been energetic in backing defence startups. Its one public funding within the sector is Fashionable Intelligence.
Adara Ventures (Madrid)
Adara is a VC agency investing in early-stage deeptech corporations in Iberia, France, the UK and Eire. Notable investments in defence tech embody CounterCraft, Constella Intelligence and 42Crunch.
Open Circle Capital (Vilnius)
Open Circle Capital is an early-stage Lithuanian VC, centered on tech corporations in ICT, robotics and deeptech.
Frst (Paris) NEW
Frst is a French generalist seed-stage VC agency with investments within the defence area. The VC has invested in Darkish House, a French spacetech startup in addition to Unseenlabs and Exotrail.
360 Capital (Paris) NEW
The French VC agency with workplaces in Paris and Milan invests in early-stage startups throughout Europe. Its most up-to-date defence funding is in French AI startup Preligens.
This text was first revealed on February 6, 2023.
Mimi Billing is Sifted’s Nordic correspondent and tweets from @MimiBilling
