Defense tech startups German-based Quantum Systems and Portugal’s Tekever have reached billion-euro valuations after securing major funding rounds, highlighting investors’ interest in Europe’s expanding defense technology sector.
Quantum Systems, with its self-flying drones, raised $180 million (about €160 million) in a Series C round led by Balderton Capital. Other European defense tech investors included Hensoldt, HV Capital, and Omnes Capital. Surveillance drone expert Tekever turned into a unicorn with a new round led by Ventura Capital. Baillie Gifford, the NATO Innovation Fund, and Iberis Capital also invested for the second time.
These rounds are part of a larger trend, venture investment in defense tech unicorns has already hit $1.9 billion this year, according to PitchBook over half as much as was invested in the previous year. If this pace continues, 2025 could be a record year for the sector.
Why Business Is Booming for Military AI Startups?
Ukraine conflict and realignment of US defense priorities compelled European governments to ramp up their own security measures for defense tech startups. The EU launched an $860 billion (€800 billion) budget plan earlier this year, while the UK has committed to investing 2.5% of its GDP in defense by 2027.
The funding upsurge is creating opportunities for both established big AI for defense and intelligence contractors as well as new tech-savvy players.
Quantum Defense Systems plans to invest its new funds in expanding into new markets based on recent acquisitions like AirRobot and Nordic Unmanned UK, focusing on unmanned aerial vehicles. Some of the investment by Tekever will go toward a $500 million (£400 million), five-year program of developing defensive AI technology based in the UK.
The two startups now sit alongside Helsing, a $5.4 billion (€5 billion) German defense AI startup, as Europe’s only defense tech unicorns. What brings all three together is that they focus on dual use technologies products with military and civilian use.
AI defense tech innovation is becoming ever more necessary as these defense tech startups are showing that Europe’s technology future of Europe might be just as much about security as software.
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