Hello followers! Today, we’re diving into a spicy new trend in defense tech investments in Europe. Buckle up!

European venture capital is breaking old rules by pouring money into Ukraine’s raw, battle-hardened defense solutions. Unlike typical investors demanding civilian applications, Estonian firm Darkstar is betting solely on military tech, aiming to modernize Europe’s defense using proven Ukrainian technologies. This shift is crucial for future security, says Darkstar’s Ragnar Sass.

Darkstar’s hands-on approach involves helping startups navigate NATO standards, ensuring their products can be procured by military agencies. They’ve already invested in geospatial analytics firm FarSight Vision and drone ammunition developer Deftak, both Ukrainian-Estonian startups. Sass, previously involved in successful ventures like Pipedrive, found his calling in defense tech after witnessing Ukraine’s innovative frontline solutions firsthand.

The fund is targeting €25 million for early-stage investments, focusing on startups with products already tested in combat. Now, Sass is moving from angel investments to a broader fund, supported by European entities like SmartCap and Coinvest Capital, driven by a sense of urgency due to regional threats.

He emphasizes that understanding the end user—Ukrainian military units—is vital. His frequent trips to Ukraine and direct meetings with commanders have taught him that elite units operate like startups, with their own R&D. Innovations like fiber-optic drones have transformed frontline warfare, making Ukrainian defense tech highly sophisticated and rapid.

Darkstar also runs bootcamps in Kyiv for startups to test and validate their tech in combat conditions. Ukrainian startups are often well-established, with some operating for over two years, a surprising fact considering social and legal hurdles like mobilization and export restrictions are easing. Women-led startups are notable contributors in this space.

Investing geographically across Europe, Sass advocates for a diversified portfolio beyond Ukraine itself, including Central and Eastern Europe, the UK, and Germany—forming a pan-European defense hub. The portfolio covers areas like autonomous systems, air defense, cybersecurity, and electromagnetic warfare, with the potential to be acquired by larger contractors or go public, as seen with companies like Anduril.

Overall, Sass highlights the urgent need for tech community involvement in defense—warning that Russia’s relentless war economy requires swift innovation from European startups. Europe’s newfound boldness in defense investment signals a major shift away from traditional, cautious approaches into a proactive stance for future security and innovation.