PARIS — European defense startups could raise a record $10.5 billion this year, according to a forecast by Dealroom, a company that tracks venture capital investments.
The total would be about four times the $2.6 billion raised a year earlier. Investment in companies developing drone technologies is driving the increase.
As of September 20, 2026, funding had already reached $7.4 billion. The figure comes from the annual State of Defence Tech report, published Monday by Dealroom and Resilience Media.
Fundraising was supported by so-called mega-rounds by two German companies, Helsing and Quantum Systems. In the previous September, the 2025 report showed funding of $1.5 billion.
Europe increases its share
Europe is capturing a growing share of investment in defense technology. By September, the European Union accounted for 21% of funding for startups in the sector, up from 15% last year.
The United States' share, meanwhile, fell to 75%, the lowest level ever recorded in Dealroom's data. «It is Europe catching up, not the United States slowing down,» the company said.
According to Dealroom, funding in the 27 EU countries more than doubled in one year. Mega-rounds accounted for more than 85% of the venture capital invested this year in European defense startups.
These include Helsing's $1.8 billion Series E round in July. Since 2023, according to the report, German startups have set every fundraising record in European defense technology venture capital.
In NATO countries, defense startups have raised $27.1 billion in venture capital so far in 2026. The figure already exceeds the $14.5 billion raised in all of 2025.
Dealroom forecasts that the total could reach $38.5 billion by the end of December.
Drones and autonomous systems lead
In Europe, the largest share of venture capital is flowing into drones and autonomous systems. The sector absorbed 74% of funding in the EU and 77% in the United Kingdom, compared with 57% in the United States.
European startups in the segment that have raised capital include Germany's Helsing, Quantum Systems and Stark, France's Harmattan AI, and the UK's Cambridge Aerospace.
In the European market, unmanned aircraft raised $4.7 billion by September. Earth observation and satellite imagery followed, with $1.8 billion.
Counter-drone solutions and launch vehicles each raised $1.2 billion. Maritime robotics received $796 million.
European startups active in ground robotics, including unmanned ground vehicles, remain somewhat behind for now. This year, they secured $77.6 million in venture capital.
Germany leads, Munich heads the ecosystem
Germany is the leading European country for defense venture capital in 2026, with $3.5 billion. It is followed by Finland with $1.2 billion, the United Kingdom with $932 million, and France with $376 million.
Munich leads Europe’s sector hubs: as of September 20, it had attracted $3 billion. Helsinki, London, Berlin, Cambridge, and Paris follow.
«Munich is the leading hub of Europe’s defense technology ecosystem,» Dealroom said. Helsing and Quantum Systems account for much of that and are worth a combined $25.7 billion.
According to the firm, they are followed by an emerging group of younger companies in ground robotics, counter-drone systems, and hypersonic technologies.
As the sector grows, funding sources for defense startups are diversifying. Dealroom forecasts that total private investment in defense startups across NATO countries could reach $42.7 billion.
The figure includes venture capital, private equity, debt, and grants. A year earlier, the total stood at $16.9 billion.
According to Dealroom, defense is Europe’s fastest-growing sector for startup fundraising, ahead of space and robotics. In the EU, it accounts for 15% of total venture capital funding, compared with 6.2% a year earlier.
Across NATO countries, defense had attracted 4.9% of venture capital funding by September.
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