[Edaily Marketin YunJi Kim Reporter] Funds are pouring into European defense tech—an area that was once considered too risky for venture capital (VC) firms to readily invest in. Since the war in Ukraine, the battlefield effectiveness of drones, artificial intelligence (AI), and autonomous driving software has been proven, and this trend, combined with the global trend toward increased defense spending, has led to a surge in investments in companies specializing in drones, unmanned systems, and battlefield software.

According to industry sources on the 4th, the German drone company “Quantum Systems” recently secured $1.2 billion (approximately 1.835 trillion won) in investment from traditional aerospace and defense firms—including Airbus, Blackstone, and Advent—as well as global asset managers.

Quantum Systems, which started out with agricultural and industrial reconnaissance drones, is being reevaluated as a defense tech company amid rising demand for military reconnaissance and surveillance following the war in Ukraine. As the utility of drones on actual battlefields has increased, expectations for the company’s growth potential have also risen, and with this investment, the company has been valued at approximately $8 billion (about 12 trillion won).

Norwegian defense tech startup Six Robotics also recently secured 12 million euros (approximately 21 billion won) in seed funding. Six Robotics develops autonomous software capable of simultaneously operating multiple unmanned systems. It is drawing attention because capital markets are pouring funds not only into drone hardware but also into the software sector that powers unmanned systems.

In addition, Stark, a German military drone startup, recently secured 500 million euros (approximately 874.8 billion won) in funding from Sequoia Capital, Founders Fund, the NATO Innovation Fund, and Advent, among others. Founded last year, Stark develops unmanned weapon systems, including suicide drones, and is rapidly expanding and gaining recognition among European defense tech startups.

Capital markets view the investment boom in defense tech as more than just a short-term trend. Regardless of the possibility of a ceasefire or an end to the war, European nations are already in a situation where they must replenish depleted ammunition, air defense systems, and drone countermeasures. As the utility of low-cost drones and AI-based battlefield software becomes evident, the focus of defense investment is shifting from large-scale weapon systems to autonomous systems and software.

Europe’s efforts to reduce its dependence on U.S. security are also fueling related investments. As the trend toward increased defense spending continues, led by the EU and NATO, private capital—anticipating future government procurement demand—is flowing into defense tech startups. Industry observers note that European venture capital (VC) funds, which had long been concentrated on climate tech, fintech, and generative AI, are now spreading to drones, unmanned systems, and battlefield software.

Regarding this, an industry insider stated, “The boom in European defense tech investment is a bet on how the European security order will change after the war, rather than on when the war will end,” adding, “Even if the war ends, challenges such as drone threats, cyberattacks, electronic warfare, ammunition shortages, and reducing dependence on the U.S. will remain.” They continued, “The war may end someday, but the security anxiety felt by Europe will not disappear easily,” adding, “That anxiety is currently driving up the valuations of startups developing drones, AI, and autonomous systems.”