Key Takeaways
- • European defense-tech startups have raised a record $7.4 billion in venture capital so far in 2026, according to the source article, with mega-rounds accounting for more than 85% of that funding.
- • US investors now account for 47% of European defense-tech funding, up from 17% in 2020, raising concerns among panelists about sovereignty and reliance on American capital.
- • Erin Hallock of the NATO Innovation Fund said any deal where a company raises more than $100 million includes US money, describing this as "the gap" in European funding.
- • Petr Šíma estimated that three or four major players capture roughly 80–90% of capital flowing into the sector, calling it "kind of a bubble, yes, or a missed opportunity."
- • Panelists urged investors to fund silicon, battery technologies and other underlying components, and to prioritise battlefield validation paired with proof of commercial demand from NATO buyers.
Summary
European defense technology has become the continent's fastest-growing major venture capital segment, with startups raising a record $7.4 billion in 2026 so far. Mega-rounds drive the bulk of this activity, accounting for more than 85% of European defense-tech funding this year. US investors now represent 47% of that funding, compared with 17% in 2020. The source article reports these figures alongside concerns about where the capital is going and whether European companies can scale without relying on American money.
The discussion took place on a panel titled "How VC Can Participate in Building European Defense Resilience" at the Engaged Investments Conference. Sandra Golbreich of BSV Ventures moderated, with Erin Hallock of the NATO Innovation Fund, Petr Šíma of DEPO Ventures and Cristobal Alonso of Wolver Ventures. Šíma said capital is concentrated in a small number of companies, while Hallock compared the current cycle with the 2020–2022 climate tech boom. She argued that defence spending by NATO allies and ongoing conflicts are the main drivers, and cited European defence, security and resilience investment of nearly €9 billion in 2025, with 2026 potentially more than double that.
Panelists raised sovereignty concerns. Golbreich described a French defense startup reportedly warned that accepting American investment could jeopardise its French contracts. Hallock questioned whether national ownership is the right test of sovereignty, pointing instead to shareholder control, supply-chain security and customer geography. Alonso said Europe currently lacks the component base to build most defense hardware companies with EU-sourced parts, noting difficulty sourcing thousands of drone components at predictable prices.
On investment priorities, Hallock called for more funding of silicon, batteries and other enabling components, and criticised investors for crowding into popular categories such as autonomous systems once valuations rise. Panelists also discussed battlefield validation. Alonso and Šíma both emphasised testing in Ukraine, but Hallock noted that combat success does not guarantee NATO procurement. Šíma identified fragmented national procurement and locally focused funds as major barriers, and proposed greater cooperation among early-stage investors.
The discussion took place on a panel titled "How VC Can Participate in Building European Defense Resilience" at the Engaged Investments Conference. Sandra Golbreich of BSV Ventures moderated, with Erin Hallock of the NATO Innovation Fund, Petr Šíma of DEPO Ventures and Cristobal Alonso of Wolver Ventures. Šíma said capital is concentrated in a small number of companies, while Hallock compared the current cycle with the 2020–2022 climate tech boom. She argued that defence spending by NATO allies and ongoing conflicts are the main drivers, and cited European defence, security and resilience investment of nearly €9 billion in 2025, with 2026 potentially more than double that.
Panelists raised sovereignty concerns. Golbreich described a French defense startup reportedly warned that accepting American investment could jeopardise its French contracts. Hallock questioned whether national ownership is the right test of sovereignty, pointing instead to shareholder control, supply-chain security and customer geography. Alonso said Europe currently lacks the component base to build most defense hardware companies with EU-sourced parts, noting difficulty sourcing thousands of drone components at predictable prices.
On investment priorities, Hallock called for more funding of silicon, batteries and other enabling components, and criticised investors for crowding into popular categories such as autonomous systems once valuations rise. Panelists also discussed battlefield validation. Alonso and Šíma both emphasised testing in Ukraine, but Hallock noted that combat success does not guarantee NATO procurement. Šíma identified fragmented national procurement and locally focused funds as major barriers, and proposed greater cooperation among early-stage investors.
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