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Russia’s war turn Europe’s drone startups into billion-euro giants

As fierce battles rage on in Ukraine to push Russian occupiers away from its borders, the West actively invests in its defense tech companies, fearing it could be the next target.
byOlena Mukhina
06/05/2025
3 minute read
A Ukrainian soldier holds the Leleka-100, an aerial reconnaissance drone equipped with optical and thermal imaging cameras. Credit: Communications Unit of the 82nd Separate Air Assault Bukovyna Brigade, Air Assault Forces of the Armed Forces of Ukraine
Russia’s war turn Europe’s drone startups into billion-euro giants

The war in Ukraine is not only reshaping geopolitics—it is igniting a defense tech explosion across Europe. With the continent striving to reduce reliance on the US, European military startups are rapidly transforming into billion-euro powerhouses, The Financial Times reports.

Russia’s war has exposed Europe’s military vulnerabilities and the urgent need to strengthen its defense capabilities. Simultaneously, shifts in US foreign policy under the Trump administration have created uncertainty about the reliability of the transatlantic security architecture that Europe has depended on since 1945. 

According to the journalists, citing data from NATO’s Innovation Fund and research firm Dealroom, investment in European defense and dual-use tech startups skyrocketed by 24% in 2024, reaching $5.2 billion.

At the forefront are two drone manufacturers—Germany’s Quantum Systems and Portugal’s Tekever—each now valued at over €1 billion thanks to massive new funding rounds.

Quantum Systems, based in Munich, secured €160 million in a landmark investment led by Balderton Capital, marking the UK firm’s first foray into defense tech. Strategic defense giants Hensoldt and Airbus Defence and Space also joined, alongside tech billionaire Peter Thiel, co-founder of Palantir.

“The goal is to make the battlefield transparent and have real-time aerial intelligence from every part of the front line. You can only shoot if you know where to shoot. So you need eyes in the sky,” says Quantum co-founder Florian Seibel. 

Tekever, which builds AI-powered surveillance drones and operates in the UK, announced tens of millions in new funding from existing investors. CEO Ricardo Mendes told the journalists that the company is now valued at over £1 billion.

Mendes says that Russia’s war made everyone “in Europe aware that the nature of the technology being used in the field has changed.”

Tekever is now doubling its production capacity each year to meet demand and expects to deliver more than 200 drone systems in 2025.

The company’s AR3 and AR5 drones, already battle-tested in Ukraine, enable pinpoint strikes with real-time intel. Other clients include the European Maritime Safety Agency and the UK Home Office.

Europe’s defense sector, long considered stagnant, is now accelerating like never before, driven by war, fear, and the urgent need to defend itself on its own terms.

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