The global landscape has significantly shifted since the Russian invasion of Ukraine in 2022 and Hamas’s attack on Israel on Oct. 7. With global military spending soaring to a staggering $2.4 trillion last year, startups are eager to tap into this market share, attracting previously hesitant investors willing to support them.
The United States boasts the largest military budget, with major tech firms securing contracts worth $53 billion between 2019 and 2022. However, the trend of investing in defense technology is emerging on a global scale.
An example of this is German-based AI startup, Helsing, which illustrates the considerable capital available for tech companies with military applications.
Investor interest is particularly high in tech solutions with dual-use capabilities, serving both civilian and military purposes. The growing concept of “resilience tech” reflects the belief that defense technology can enhance broader societal benefits.
Rather than simply focusing on “defense,” the term “resilience” emphasizes how innovation can strengthen democratic societies against threats and aid in quicker recovery after incidents.
Helsing’s co-CEO, Gundbert Scherf, articulated the importance of AI in defending democratic values, resonating with mainstream investors like Spotify founder Daniel Ek. This shift in mindset denotes a change in societal perceptions and venture capital strategies.
Previously restricted from investing in weapons, even large funds now support international startups in resilience tech space, with backing from major limited partners such as the European Investment Fund.
Venture capital firms across the EU, Ukraine, and Israel are increasingly backing resilience tech ventures beyond U.S. borders.
NATO Innovation Fund
The NATO Innovation Fund, a $1 billion venture, plays a crucial role in conversations around resilience tech. Despite maintaining a low profile since its inception in August 2023, it has recently disclosed its initial investments across various sectors, focusing on advancing defense, security, and resilience.
Investments from NIF are limited to startups from its 24 LP countries, ensuring fresh funding reach locations traditionally underserved in the capital realm, reinforcing resilience tech concepts.
NIF’s partnerships with VC firms like Alpine Space Ventures, Join Capital, OTB Ventures, and Vsquared Ventures further expand its reach and impact in the resilience tech landscape.
OTB Ventures
OTB Ventures, established in 2017, has evolved its deep tech focus with support from NIF and the European Investment Fund. Its emphasis on real tech areas aligns with resilience tech goals, covering space tech, AI, cybersecurity, and more.
OTB recognizes the value of dual-use technologies, noting the increasing integration of civilian technologies into defense sectors, reflecting changing startup realities.
MD One Ventures
MD One Ventures, based in the UK and established in 2021, prioritizes dual-use technologies in its investments, supporting applied deep tech innovations across various sectors and technology types.
The VC firm’s portfolio includes startups like Labrys Technologies and Materials Nexus, focusing on military and humanitarian scenarios, along with AI-driven material discovery.
Israel Resilience Fund
Launched post the Hamas attacks, the Israel Resilience Fund aims at raising $50 million to support startups impacted by the conflict or contributing towards immediate needs in Israel. The fund’s success in securing commitments underscores the resilience of Israeli startups amid challenging times.
Collaboration with public and private sources further bolsters the fund’s efforts, indicating a positive trajectory for the Israeli tech sector despite adversities.
D3
Dare to Defend Democracy, or D3, is an early-stage fund backing founders leveraging technology to bolster Ukraine’s defense and enhance national security. The fund’s investments cover diverse areas, from drones to AI, reflecting the spectrum of innovation driving resilience tech scenarios.
D3’s active involvement in defense tech hackathons signals a growing pipeline for investments in startups aligned with resilience tech concepts.
