Germany Grabs 90% of Europe’s Defence Tech Funding in 2025
Europe’s defence tech startups raised a record $971 million in funding in the first half of 2025 — and Germany claimed over 90% of it.
The vast majority of that money was funnelled into a handful of startups that are building some of the most cutting-edge weapons and surveillance tech in the world. Leading the way was Helsing, an AI-powered military software company that raised $524 million in June. The Munich-based startup supplies NATO and recently partnered with European defence giant Saab to develop AI-driven electronic warfare systems.
Another big winner was Quantum Systems, which builds long-range drones with onboard edge AI. The Munich-based company raised $63 million in March from European investors including HV Capital and Project A, as well as NATO’s Innovation Fund. It supplies Ukraine with drones and recently struck a deal to deliver hundreds of them to Germany’s armed forces.
Also based in Munich, ARX Robotics raised $9 million in April to scale its fleet of unmanned ground vehicles that transport supplies, evacuate casualties, and perform surveillance on the battlefield.
A Growing Appetite for Autonomous Weapons
These three startups made up over 90% of Europe’s total defence tech funding for the first six months of the year — and they’re all based in the same city. That’s no accident. Munich has become the nerve centre of Europe’s military AI movement, fuelled by close links to NATO and the Bundeswehr, Germany’s armed forces.
It’s also home to the Bundeswehr University’s dtec.bw, a key research hub for defence AI, and to a growing group of military-focused investors. Among the most active is Vsquared Ventures, an early backer of Helsing, Quantum Systems, and ARX Robotics, as well as newer entrants like DeepScenario and blackshark.ai, which creates 3D simulations of real-world terrain for military planning and training.
At the same time, Germany has quietly become Europe’s largest defence spender and weapons exporter, with one of the world’s most advanced military AI ecosystems.
Europe’s Pentagon Moment?
The war in Ukraine has galvanised political and investor interest in autonomous weapons, as militaries race to build drone-powered arsenals and software to coordinate them. “We believe that in the future, wars will be won and lost in the invisible realm of software,” Helsing co-founder Gundbert Scherf told TNW last year.
Startups across Europe are now building everything from underwater drone swarms (like the UK’s Windracers) to AI-powered satellite surveillance systems (like France’s Preligens) to battlefield-ready simulation tools (like Germany’s blackshark.ai and Skyral).
While Europe’s defence sector is still dwarfed by the US and China, its tech industry is carving out a role as a key player in autonomous systems, AI-enabled surveillance, and swarm-based tactics — one that could shape the future of warfare in profound ways.
