Germany snaps up 90% of Europe’s record defence tech funding
Funding focus is a new series analysing cash flow into the European tech ecosystem. Last week, we looked at the largest investment rounds in fusion energy this year, and now we’re honing in on Europe’s booming defence tech arena.
Europe’s defence tech startups secured $971mn in funding in the first half of this year, as VCs look to capitalise on the continent’s push to rearm amid heightened geopolitical tensions.
Funding in H1 2025 has already shot past the whole of 2024 — the previous record year — which saw defence startups raise $605mn, according to Dealroom data. German startups led the charge, raising $881mn — 90% of Europe’s total defence tech investments.
Munich-based Helsing took the lion’s share. In June, the startup secured a whopping €600mn ($660mn) in Europe’s largest funding round of the year so far. The deal, led by Spotify CEO Daniel Ek’s VC firm Prima Materia, valued Helsing at €12bn ($13.2bn), making it one of the continent’s most valuable private companies.
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Founded in 2021, Helsing develops AI software for weapons, vehicles, and military strategy. Its tech has been integrated into battlefield simulations, electronic warfare for fighter jets, and drones in Ukraine. The company also recently unveiled plans for a fleet of autonomous reconnaissance submarines to boost Europe’s maritime defences.
The year’s second biggest cash injection went to another German company — Quantum Systems, which raised €160mn ($176mn) at a valuation north of €1bn ($1.1bn).
Quantum Systems builds electric, AI-powered autonomous surveillance drones that are dual-use, meaning they can serve both military and civil purposes.
Defence forces can use the unmanned aerial vehicles (UAVs) to spy on enemies and gather intel. The drones can also be used by farmers to inspect their crops, by energy companies to check power lines, and by search and rescue teams to look for survivors.
The third biggest round also went to a German company: ARX Robotics, headquartered near Munich, which bagged €31mn ($34mn) in April to expand its fleet of autonomous land drones. The round came shortly after ARX announced plans to invest £45mn ($58mn) into a new UK factory.
ARX’s machines drive around on treads and can be fitted with equipment such as radar, mine-sweeping devices, or medical stretchers. The largest carries military payloads weighing up to 500kg — including injured soldiers — across the battlefield.
Other notable defence tech deals this year include a $20mn round for Britain’s Skyral — a startup founded by former Prime Minister Tony Blair’s son, Nick. The company is developing military simulation tech for the British Army and NATO. Another German business also got a big funding boost: Swarm Biotactics. The startup raised €10mn ($11mn) to advance its unusual biorobotic system, which equips live cockroaches with sensors to monitor extreme environments.
The investments come amid a broader defence tech boom in Europe, with governments turning to technologies like drones, submarines, and AI-based weaponry.
Kate Leaman, chief market analyst at online broker AvaTrade, previously told TNW that military tech companies have “huge potential” for growth — particularly those with AI-driven solutions.
“We’re already seeing a shake-up in the defence sector, with AI-focused players like Palantir outperforming more traditional defence giants,” Leaman said. “This suggests that cutting-edge, tech-centric firms could possibly capture a sizeable share of the market.”
