Europe’s $10.5B Defence-Tech Forecast Rests on Two Munich Firms and American Money
Dealroom forecasts a record $10.5B for European defence startups in 2026, but mega-rounds are over 85% of it and US investors supply 47%. Russia's jet drones set the test.
Mega-rounds make up more than 85% of Europe’s record defence-tech funding, and US investors supply 47%. Russia’s jet-powered drones make interceptor output and state orders the test.
Europe’s forecast $10.5 billion defence-tech venture year rests on a concentrated, increasingly foreign-funded market. Dealroom and Resilience Media’s October 5 report projects that total against $2.6 billion in 2025, with $7.4 billion already raised by September 20. The increase is real; the year-end figure remains a forecast. Mega-rounds absorb more than 85% of the money, and US investors supply 47%. Whether that capital strengthens defence now depends on procurement converting investment into products that answer the demand for faster, affordable interceptors.
Helsing and Quantum Systems’ July rounds
Dealroom’s record is anchored by two Munich companies. Helsing raised a $1.8 billion Series E on July 13 at an $18 billion valuation, less than two weeks after Quantum Systems secured a $1.2 billion Series D at an $8 billion valuation. The deals set consecutive European defence-tech fundraising records. Across NATO and allied countries, the report identifies seven rounds exceeding $1 billion, involving Anduril, Helsing, Saronic, Shield AI, Quantum Systems, ICEYE and Castelion.
The report puts US investors’ contribution at 47% of European funding, against 44% from European backers. Its active American investors include Axon, Accel, Founders Fund, Y Combinator, General Catalyst and Lightspeed.
Dealroom characterises the shift as Europe catching up rather than the US slowing. The EU’s share of defence startup funding across NATO and allies rose from 15% to 21%, while the US still accounted for 75%. Europe has gained ground, but its record depends heavily on large deals and American money. The demand it must answer is already on the front: Ukraine’s air force counted 2,800 Russian jet-powered drones launched in August, against 350 in June.
Frequently Asked Questions
How much will European defence startups raise in 2026?
Dealroom and Resilience Media forecast $10.5 billion, against $2.6 billion in 2025. $7.4 billion had been raised by September 20.
Why is the record considered concentrated?
Dealroom says mega-rounds made up more than 85% of the money. Helsing raised $1.8 billion at an $18 billion valuation and Quantum Systems $1.2 billion at $8 billion.
Who is funding European defence tech?
US investors supplied 47% of the funding this year against 44% from European backers, per Dealroom.
What does the front demand from these companies?
Zelenskyy said Ukraine downed 55% of Russian jet-powered drones in September, against rates above 90% for propeller-powered models. Germany's Merz announced turbojet-powered interceptors as part of roughly €1 billion in aid.
What could stop the money turning into capability?
Procurement. Dealroom and Resilience Media report that German startups struggle to move from trials to contracts, and that 4% of the UK MoD's direct spend with domestic industry went to SMEs.
AI-generated summary, reviewed by an editor. More on our AI guidelines.
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Marcus Schuler
Marcus Schuler edits BattlePolicy, a daily defense-technology brief connecting the companies and capabilities behind modern war to the contest among Europe, the US, Russia, and China.