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Funding focus is a new series analyzing cash flow into the European tech ecosystem. Last week, we examined the largest investment rounds in fusion energy for 2025, and now we turn our attention to Europe’s booming defense tech sector.
European defense startups secured $971 million in funding in the first half of this year as venture capitalists capitalize on the continent’s push to rearm amid heightened geopolitical tensions. Funding so far in 2025 has already surpassed the entire amount raised in 2024, the previous record year, which saw $605 million invested in defense tech startups.
German startups took the lead, raising $881 million—90% of Europe’s total defense tech investments. Munich-based Helsing secured €600 million ($660 million) in June, topping all European funding rounds so far this year. This deal was led by Spotify CEO Daniel Ek’s venture capital firm Prima Materia and valued Helsing at €12 billion ($13.2 billion), making it one of Europe’s most valuable private companies.
Founded in 2021, Helsing develops AI software for weapons, vehicles, and military strategy. Its technology has been integrated into battlefield simulations, electronic warfare systems for fighter jets, and drones in Ukraine. The company recently unveiled plans to develop a fleet of autonomous reconnaissance submarines to bolster Europe’s maritime defenses.
The year’s second largest investment went to another German company, Quantum Systems, which raised €160 million ($176 million) at a valuation north of €1 billion ($1.1 billion). Quantum Systems builds electric, AI-powered autonomous surveillance drones that can serve both military and civil purposes. Defense forces use these unmanned aerial vehicles (UAVs) for spying and gathering intelligence, while farmers inspect crops, energy companies check power lines, and search and rescue teams look for survivors.
The third largest round also went to a German company: ARX Robotics, headquartered near Munich, which secured €31 million ($34 million) in April to expand its fleet of autonomous land drones. Shortly after, the company announced plans to invest £45 million ($58 million) into a new UK factory.
ARX’s machines drive on treads and can be fitted with radar, mine-sweeping devices, or medical stretchers. The largest carries military payloads weighing up to 500 kg— including injured soldiers—across the battlefield.
Other notable deals include a $20 million round for Britain’s Skyral, founded by former Prime Minister Tony Blair’s son Nick, who is developing military simulation tech for the British Army and NATO. Another German company, Swarm Biotactics, raised €10 million ($11 million) to advance its biorobotic system, which equips live cockroaches with sensors to monitor extreme environments.
These investments come as part of a broader defense tech boom in Europe, where governments turn 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—especially those with AI-driven solutions.
“We’re already seeing a shake-up in the defense sector,” Leaman said. “AI-focused players like Palantir are outperforming more traditional defense giants.” This suggests that cutting-edge, tech-centric firms could capture a significant share of the market.
