CEE Venture Funds Driving Europe’s Defense Transformation

Key Takeaways

The EU has approved a proposal to boost defense investments within its budget in response to evolving security needs.
Central and Eastern European venture capital is increasingly focusing on defense technologies as a long-term strategy.
Several funds are actively supporting defense and dual-use tech startups across the region, aiming to enhance military capabilities.

EU’s Defense Investment Initiative

Last week, EU member states backed a proposal to stimulate defense-related investments as part of the ReArm Europe initiative, aimed at enhancing military capabilities and overcoming bureaucratic obstacles. This strategic shift reflects the changing security landscape in Europe.

In this context, venture capital in Central and Eastern Europe is pivoting towards defense as a long-term investment strategy. Investment funds are beginning to support technologies that align with the EU’s security objectives and are seen as crucial for the continent’s future.

Several notable venture capital funds are currently backing defense and dual-use technologies within the region:

Angel One Fund (Ukraine): Funded by the Ukrainian Catholic University, it invests in various sectors, including defense. Typically, it acts as an intermediary for private investors looking to engage with dual-use startups.
BSV Ventures (Baltics): This firm has closed a €15 million fund, aiming to support pre-seed and seed stage startups in dual-use and deep tech. It has backing from the NATO Innovation Fund and focuses on innovation in mechatronics, AI, and more.
D3 Venture Capital (Ukraine): Launched in early 2023, this early-stage fund invests in defense tech startups specializing in areas like drones and AI, offering capital and tailored support.
Double Tap Investments (Ukraine/British-Finnish): Focuses on global scaling potential for defense tech solutions, making investments typically between $100,000 and $300,000.
Expeditions (Poland): A Warsaw-based firm investing in early-stage dual-use companies, it aims to raise €150 million by the end of 2025, with backing from NATO and Polish development funds.
Green Flag Ventures (Ukraine): This fund invests in Ukrainian startups developing defense-focused technologies, with ticket sizes ranging from €100,000 to €600,000.
MITS Capital (Ukraine/Denmark): Focused on scaling Ukraine’s defense technologies, it has invested in 11 firms and recently launched a defense technology initiative.
NEZLAMNI Fund (Ukraine): A seed-stage fund established in mid-2024, it invests in defense startups, with tickets typically between $100,000 and $400,000.
Presto Tech Horizons (Czech Republic): Launched in 2024, this fund prioritizes dual-use solutions in NATO and allied countries, aiming to support 30–50 companies with investments of €300,000 to €3 million.
OTB Ventures (Poland/Netherlands): Although primarily focused on deep tech, it aligns with dual-use ambitions and has received support from the NATO Innovation Fund.
SMRK (Ukraine): Primarily investing in IT startups, it also participates in adjacent defense deals through co-investments.

These funds reflect a broader trend in venture capital towards investing in technologies that will shape the continent’s defense capabilities and technological landscape for years to come.

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