8 European Defense Tech Startups to Watch
A European push to stop relying on the US military has spawned a new generation of companies.
Vladimir Putin’s full-scale invasion of Ukraine three and a half years ago shocked European powers into a consensus that they need to rearm. But it was Donald Trump’s wavering commitment to NATO that unleashed the biggest wave of defense spending in Europe since the Cold War.
Swelling defense budgets have fueled a new generation of startups on the continent, with a handful valued at over a billion dollars and others coming up fast. Many of the largest ones got there by building drones and navigation software for unmanned vehicles, an emerging type of weapon that's proven indispensable in the war in Ukraine. AI-powered aircraft have become a buzzword for militaries looking to modernize, with European officials proposing a “drone wall” to protect against Russia. Other newcomers are designing tools for battlefield management or seeking to develop Europe’s nascent space industry.
Venture capital investment in the European defense sector through September hit an annual record of $1.5 billion, 50% more than in all of 2024, according to Dealroom.
Here are eight of the most dynamic European defense startups you’ll be hearing more about in the coming years:
Company Destinus
CEO Mikhail Kokorich
Valuation $1 billion+
INDUSTRY Attack and surveillance drones
Headquarters Hengelo, The Netherlands
Russian entrepreneur Mikhail Kokorich founded Destinus in 2021 to develop hypersonic strike drones, loitering munitions and interceptors. Following Putin’s full-scale invasion of Ukraine, Kokorich renounced his citizenship and has been supplying Kyiv with weapons to defend against Russian aggression. Destinus this summer bought Daedalean, a Zurich-based startup that builds machine learning software and camera systems, for $223 million. The acquisition will help Destinus’s weapons systems steer without relying on satellite navigation systems, which the Ukraine war has exposed as susceptible to electronic warfare and jamming.
Company Cambridge Aerospace
CEO Steven Barrett
Valuation ~$400 million
INDUSTRY Missile interceptors
Headquarters Cambridge, UK
This British firm hasn’t shown any devices in public, signed any deals or even posted any info on its website – but it has won plenty of investors. It raised around $100 million in early financing from blue-chip firms like Lux Capital and Accel to build an “Iron Dome” defense system for Europe. Its first product, called Skyhammer, is meant to be a low-cost interceptor for drones and cruise missiles. CEO Steven Barrett recently said Cambridge Aerospace has incorporated in Germany and Poland, a signal that it may want to take part in the so-called drone wall. It counts former UK defense minister Grant Shapps as a cofounder and chairman.
Company Iceye
CEO Rafal Modrzewski
Valuation ~$2.5 billion
INDUSTRY Radar satellite imaging
Headquarters Espoo, Finland
Iceye (pronounced ice-eye) operates the world’s largest constellation of synthetic-aperture satellites, which are spacecraft with radar designed to monitor the planet in any weather and regardless of if it’s day or night. The company began monitoring melting glaciers – hence the name – for shipping and other commercial purposes, but now also helps militaries gather intelligence. Iceye’s niche has been growing fast as sovereignty concerns push more countries to wean their dependence on the US. The Financial Times reported earlier this month that the company is looking to raise at a valuation of about $2.5 billion.
Company Kela Technologies
CEO Alon Dror
Valuation Not disclosed
INDUSTRY AI software
Headquarters Tel Aviv, Israel
Alon Dror founded Kela last year with partners including Hamutal Meridor, the former country head of Palantir Technologies in Israel. They’re working to help militaries integrate commercial tech like tablets and cameras into their platforms. Sequoia Capital, Lux Capital and In-Q-Tel, the investment arm of the CIA, have all contributed to the $100 million Kela has raised to date. Kela’s software, initially developed for border defense after the Oct. 7, 2023, attack by Hamas, collects and processes huge amounts of data from various sources like sensors and drones into a single interface, making it easier for armies to quickly respond to threats.
Company Isar Aerospace
CEO Daniel Metzler
Valuation €1 billion
INDUSTRY Space
Headquarters Ottobrunn, Germany
Isar Aerospace is seeking to become the first company to reach orbit from a European spaceport ex-Russia. If it can succeed, it’ll play a key role in making Europe less reliant on Elon Musk’s SpaceX and other US firms for satellite launches. Isar trumpeted its first flight of its 28-meter Spectrum rocket in March in Norway as a success, even though it only flew for about 30 seconds before crashing. Isar’s now gearing up for another attempt. While its operations are a work in progress, companies are lining up to book space on Isar’s launches. Capacity is sold out until the beginning of 2027, with more than 10 missions planned by then, CEO Daniel Metzler said earlier this year.
Company Quantum Systems
CEO Florian Seibel, Sven Kruck
Valuation ~€3 billion
INDUSTRY Surveillance drones, AI software
Headquarters Gilching, Germany
Florian Seibel, a former German army pilot, started his drone company well ahead of the current defense boom. He set out in 2014 to build unmanned aircraft for civilian uses like mapping and monitoring farmland. After Russia’s invasion of Ukraine in 2022, his drones were quickly sent to the frontline to observe Kremlin forces. Since then, Quantum Systems has produced different drone models and expects to nearly triple its sales in 2025 from a year earlier to €300 million. The startup is developing AI software for battlefield management and planning to raise capital later this year at a valuation as high as €3 billion, Bloomberg reported. Seibel, meanwhile, has started another company, Stark Defence, that produces attack drones and has also raised money at a rapid pace.
Company Helsing
CEO Gundbert Scherf, Torsten Reil
Valuation €12 billion
INDUSTRY AI software, drones, hardware
Headquarters Munich, Germany
Helsing raised €600 million in June, the biggest round for a European defense startup ever, making it the clear leader among the continent’s new names in military tech. The company was founded to develop AI solutions for the military in 2021 and received early backing from Spotify Technology SA billionaire Daniel Ek’s fund. Helsing is working alongside Swedish partner Saab AB to develop radar solutions for the Eurofighter and last year pivoted to start building its own hardware. In addition to the HX-2, a strike drone that is currently undergoing testing by the Germany army, Helsing is developing autonomous autopilot software for jets and underwater surveillance drones. The startup’s chiefs say they intend to build a company that can protect land, air and sea.
Company Tekever
CEO Ricardo Mendes
Valuation €1.3 billion+
INDUSTRY Drones
Headquarters Lisbon, Portugal
This Portuguese company makes drones for aerial surveillance to monitor everything from pipelines in Nigeria to smugglers in the English Channel. Tekever’s AR3 fixed-wing drone has flown in combat missions in Ukraine and can stay aloft for up to 16 hours. The company’s 2024 funding round was led by the NATO Innovation Fund and Baillie Gifford & Co. This year, Tekever inked a deal with the Royal Airforce in the UK to provide drones that can jam enemy radars. CEO Ricardo Mendes says his company is already profitable.
With as Thomson