Why defence tech, cybersecurity & reindustrialisation are Europe’s most urgent, and most compelling investment opportunities.
The world has changed. Is Europe ready?
In 2022, Russia invaded Ukraine and reset every assumption on the continent. In 2024 and 2025, the United States began signalling a reduced role in NATO, and strategic autonomy stopped being a slogan. By 2026, Europe is mobilising capital at historic scale and still short on innovation.
This is structural. Not cyclical and not reversible.
For founders building in this space today, the conditions are unusual: demand is committed through public budgets, the buyer is rebuilding how it buys, and the European cap table is still mostly empty at pre-seed and seed. The question is no longer whether the money is coming. It’s who is building the technology it will fund and whether they are European.
The Scale of Europe’s Response
In March 2025, the European Commission launched ReArm Europe / Readiness 2030 : up to €800 billion in additional defence capacity over the decade. Three months later at the NATO Hague Summit, allies agreed a new 5% of GDP defence target by 2035 3.5% on core military, 1.5% on broader security including cyber, critical infrastructure, and resilience.
This is the largest peacetime defence spending expansion in European history. And it is structural, not cyclical. The political consensus that built it spans left and right, east and west, and has been cemented by events on the ground that none of the signatories can reverse.
“The question for investors is not whether the money will flow. It’s who builds the technology that makes it count.”
– Cristóbal Alonso
Europe is funding its own defence with American capital:
In 2024, two out of three European defence tech deals were led by US investors. In 2025 it worsened: US investors contributed roughly 85% of total VC into NATO defence tech. Domestic European share: 6-10%.
Europe is outsourcing its own strategic future to foreign investors. That is both a failure of foresight and an extraordinary opportunity for those who act now.
The exceptions are growing, the NATO Innovation Fund, Lakestar, Earlybird, and Wolver Ventures itself are actively writing pre-seed and seed cheques across the corridor. But supply is still well below demand, especially for European-led rounds in dual-use hardware and industrial AI.
Three Pillars of Opportunity
Pillar I – Defend
Ukraine proved the model with cheap drones, AI targeting, mesh communications, and software-defined warfare are beating legacy hardware on contact. The battlefield has become the most demanding testing ground a startup can have, and the cycle times are measured in days, not procurement years.
Helsing (Europe’s first AI-for-defence prime, valued at €18B), Quantum Systems (autonomous ISR, €100M+ raised, supplying the Bundeswehr and NATO allies), and a long tail of Ukrainian hardware startups are setting the standard for what this looks like in practice.
Every nation is a target now. Hybrid warfare runs 24/7. Telecom networks go dark, energy grids are destabilised, railways are disrupted, all without a single shot. Protecting national infrastructure is now as urgent as protecting borders.
Procurement is broken because western countries still buy €100M jets on 10-year cycles. The future is fast, cheap, and software-upgradeable. The gap between what is needed in the field and what traditional channels deliver is enormous and that gap is the founder’s market.
Critical Infrastructure: The Invisible Front Line
Telecoms. Energy. Railways. The next battlefield is invisible and already under attack.
5G networks and satellite links are primary targets for jamming and infiltration. Aviation GNSS interference across European airspace is up 220% since 2021. Power grids and pipeline SCADA systems are under continuous cyber assault. Rail signalling and logistics networks are high-value sabotage targets.
Where regulation creates opportunity: NIS2
The EU NIS2 Directive extends mandatory cybersecurity obligations to roughly 160,000 entities across 18 critical sectors. Only 4 of 27 Member States met the October 2024 transposition deadline. Germany only transposed in December 2025. Fines reach €10M or 2% of global turnover.
This creates a rare dynamic in venture. Startups are not selling to convinced buyers, they are selling to required buyers. The compliance gap is enormous, the demand is regulation-driven and multi-year, and the buyer base is captive.
For early-stage companies focused on OT/ICS, telecoms, energy, and rail security, this is the least-crowded, highest-urgency vertical in defence tech.
Space: No longer just for superpowers
Ukraine didn’t just prove drones work. It proved that whoever controls the satellites controls the battle. Europe has zero sovereign alternatives to US constellations. That is not a gap, it is a vulnerability. The global space economy is projected at $1.8T by 2035.
The white space is clear: anti-jamming and signal resilience, sovereign European ISR constellations, space-based AI and Earth observation.
Companies like ICEYE (Finnish SAR constellation, €500M+ raised), Isar Aerospace, and Mynaric (laser comms, listed on Nasdaq, supplying DARPA, SDA, and ESA) are already operating in this gap.
Pillar II: Innovate: defence as Europe’s innovation engine
Defence has always been an innovation engine. GPS, the internet, radar are all defence-born. The next wave is already in motion.
The most successful companies in this category will be dual-use by design with the same core technology, two buyers, with commercial revenue derisking the long government sales cycle.
Pillar III: Reindustrialize
Defence spending is the most powerful industrial policy Europe has ever deployed. Rheinmetall has grown from about 80,000 to over 100,000 employees since 2022. In Ukraine, defence-tech companies have created an estimated 200,000+ direct and indirect jobs, proof that defence is a real industrial multiplier, not a budget line.
The shift goes beyond software: batteries, magnets, rare earths, semiconductors, robotics, additive manufacturing, and the industrial AI layer that runs across all of it. Supply chain sovereignty is the through-line. Europe cannot rely on Asian or American components for its own security.
The Cyber Dimension
Gartner’s July 2025 forecast puts global information security spending at $213B in 2025, with 12.5% growth projected for 2026. NATO has explicitly named cyber and critical infrastructure resilience as a structural spending mandate. The 1.5% GDP allocation translates to roughly €12–15B per year in Germany alone.
Cyber is not a niche vertical. It is the invisible infrastructure layer of the modern economy: identity and access, threat intelligence, cloud security, AI-driven SOC, quantum readiness.
Geography is the Edge: Eastern lab, western scale
Innovation in this space is not evenly distributed. Wolver’s framing is simple:
Eastern Europe is the lab and western Europe is the scale corridor.
Eastern Europe is the live testing environment. Ukraine, through Brave1, operates on iteration cycles measured in days. Poland is running a €30B+ defence procurement pipeline. The Baltics Estonia, Latvia, Lithuania are NATO’s frontline states with cyber and drone expertise at scale.
Western Europe provides the scale. Germany is the largest EU economy committing to the new 3.5% GDP defence target. The Nordics host the most advanced cyber and autonomy ecosystems on the continent. Spain is the strategic HQ for Iberian and Latin American expansion.
Romania deserves special mention. Rheinmetall opened a €47M munitions factory in 2024. Hanwha Aerospace is building a new APC production line. Lockheed Martin and Aerostar Bacau opened a dedicated Black Hawk MRO centre in early 2024. The startup layer is just starting and the combination of industrial prime, MRO, sovereign ammunition production, and near-zero VC market is rare in Europe today.
The corridor through Ukraine to Spain, via the Baltics, Poland, Romania, Germany, and the Nordics is where the next generation of European defence and dual-use companies will be built.
Real companies. Real progress.
Europe’s Next Defence Giants Are Being Built Now
Quantum Systems grew from a university spin-out to a defence prime supplying the Bundeswehr and NATO allies. Helsing is Europe’s leading AI-for-defence company at €18B, supplying AI sensor fusion to Eurofighter and allied armed forces.
The pattern is clear: deep-tech startup – sovereign supplier – prime.
Europe faces an existential security challenge. Solving it requires a generation of new companies and those companies will be worth billions. They are pre-seed right now. US stepping back from NATO creates an irreversible imperative for European strategic autonomy; the spending is committed and is not reversible.
Europe has the talent, the engineers, and the startups, but lacks dedicated early-stage capital from local investors who understand both tech and geopolitics. Eastern Europe is the world’s most advanced defence innovation lab, and the corridor from Ukraine to Spain is where the next category leaders will emerge. Compressed valuations + absent capital + structural demand = asymmetric entry. The institutional wave has not arrived yet but it will, and soon.
Let’s Talk
If you are a founder building in this space in Kyiv, Tallinn, Vilnius, Helsinki, Stockholm, Warsaw, Bucharest, Madrid, or anywhere along the corridor, and if you are one of them, we want to talk.