Investment in European defense and security start-ups jumped 24% in 2024 to $5.2 billion, outpacing AI venture capital growth on the continent over the past two years. A report by the NATO Innovation Fund and Dealroom highlighted growing investor confidence in companies like defense AI firm Helsing and drone maker Tekever, despite a broader downturn in European VC funding. Germany overtook the UK as the leading destination for defense tech investment, with Munich attracting nearly $1 billion in funding last year. The NATO fund, launched in 2022 with €1 billion, aims to bridge Europe’s funding gap in defense innovation, as U.S. investment in the sector remains significantly higher at $4.3 billion in 2024. While slow government procurement remains a challenge, experts emphasize the need for faster acquisition processes to attract more private capital and sustain the sector’s growth.
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