Defence, Security and Resilience: The state of startups and venture capital 2026 (NATO Innovation Fund / Dealroom)

Summary

• Venture capital funding in European Deep Tech Defence, Security and Resilience reached an all-time high of $8.7B in 2025, up 55% year-over-year.p.3
• Defence, Security and Resilience startups captured 13% of all European VC funding and 43% of all European Deep Tech funding in 2025.p.4
• Late-stage mega-funding tripled from the previous year to reach $4.7B in 2025.p.3
• The United Kingdom led European VC funding in the sector with $2.9B in 2025, followed by Germany with $2.1B.p.3
• Artificial intelligence underpinned 44% of all Defence, Security and Resilience venture capital funding in 2025.p.3
• Debt financing to sector startups multiplied 26x over five years to hit $1.4B in 2025.p.20
• Mergers and acquisitions increased 4x compared to four years ago, while no public listings took place in 2025.p.3

Key insights

1. European Defence, Security and Resilience VC investment expanded by 55% in 2025 compared to 16% for the broader European VC market.p.4
2. Central and Eastern Europe recorded a 2.7x increase in deal velocity since 2020, led by Bulgarian space tech company EnduroSat.p.3
3. Munich was the top European city hub for sector VC investment in 2025 with $1.7B raised, driven by Helsing.p.4
4. VC funding for Security of critical technologies startups grew 2.4x in 2025 to hit $2.4B, driven by Quantum and AI chips.p.49
5. VC investment in Awareness, understanding and decision making reached $1.8B in 2025, representing a 7.4x increase since 2020.p.46
6. Freedom of operations and mobility startups raised $845M in 2025, up 1.6x year-over-year.p.47
7. Ukraine produced approximately 4 million drones in 2025 with a target of 7 million set for 2026.p.46