Introduced by Andreas Munk Holm, this EUVC Live at GoWest series spotlights the thought leadership of policymakers, institutional investors, GPs, corporates, and public capital leaders around one defining question:
How does Europe mobilize its own capital to secure its technological future?
Across the sessions, one theme emerges repeatedly:
Europe does not lack talent.
It does not lack innovation.
It does not lack savings.
It lacks coordination.
Over the past three years, European venture capital has undergone a rapid reputational shift. Defense is no longer a taboo category. It is increasingly framed as resilience, sovereignty, and strategic necessity. But as the category normalizes, a more uncomfortable question emerges.
Is Europe building real defense capability? Or is it simply relabelling existing startups as “dual use” to align with the political moment?
Karl-Christian Agerup from NATO Innovation Fund, Nicholas Nelson, General Partner at Archangel Ventures, and Sebastian von Ribbentrop, Managing Partner at Join Capital, address that question directly. The discussion is not performative. It is intentionally polarizing because the stakes are not reputational.
They are operational.
Why NATO Built a Venture Fund
The episode begins with the rationale for the NATO Innovation Fund (NIF), a €1B deep-tech vehicle backed by 24 NATO nations. Karl-Christian Agerup argues the fund exists because Europe’s defense weakness is not primarily a budget problem. It is an innovation pipeline problem.
Europe has underinvested in deep tech. Venture infrastructure remains thin outside a handful of hubs. Defense needs are poorly integrated with startup ecosystems. Sovereign capital for strategic technologies has been insufficient. Procurement and data-sharing systems remain fragmented across allied nations.
The argument is systemic. If Europe wants a defense capability, it cannot rely on procurement alone. It must finance and scale the technologies that determine modern security: autonomy, sensing, cyber resilience, advanced manufacturing, and critical infrastructure software.
Sovereignty is not declared.
It is built upstream.
Defence Tech Is Now a Venture Growth Category
The episode also reflects a clear market shift. Deep tech has become one of Europe’s fastest-growing VC categories, and defense, security, and resilience investing has increased sharply. Capital markets are beginning to respond to the geopolitical reality.
But the discussion remains grounded in scale. Europe is still far behind the United States and China in absolute volume, particularly in growth and the late stages. The category may be culturally normalized, but the capital depth required to build champions remains insufficient.
The result is momentum without dominance.
A growing sector without the infrastructure to scale it.
Dual Use as a European Coping Mechanism
The central conflict in the episode is the meaning of “dual use.” Nicholas Nelson argues that in Europe, dual use is often less a strategy than a reputational shield. A startup can sell a single product into a ministry once and claim the defense label without building net-new capability or committing to the operating realities of defense markets.
The critique is structural. Dual-use positioning can reduce clarity, dilute product focus, and produce mediocre outcomes—financially and operationally. At the seed stage, founders face two competing go-to-market motions, two sets of engineering requirements, and two compliance regimes. The result is dispersion: teams attempt to do both and do neither well.
In this framing, dual use becomes a coping mechanism. It allows founders and investors to signal strategic alignment without fully accepting the constraints of defense-first execution.
The Defence-First Argument
The defense-first position is built on a specific claim: early-stage defense-only startups have outperformed dual-use startups in Europe over the last fourteen years. The logic is not ideological. It is operational.
Defense-first companies can sequence their build. They can focus on one customer archetype, one compliance system, and one procurement reality. They can mature product reliability and security standards before attempting to expand commercially.
The episode uses Palantir as a case study. Palantir did not pursue commercial revenue meaningfully for roughly its first eight years. It scaled inside the defense and intelligence markets first. Only later did it bifurcate into commercial markets.
The implication is important. Defense-first is not anti-commercial. It is sequencing.
The Dual-Use Counterargument
Sebastian von Ribbentrop offers a different perspective. The opposing argument is less about identity and more about risk management. Venture is already high risk. Customer diversification reduces fragility.
A company with the same core technology solving both civil and defense problems can reduce concentration, accelerate revenue, access non-dilutive defense contracts, and use defense procurement as a shortcut through slow civil adoption cycles. The episode gives a concrete example: a company that began in energy monitoring and later expanded into underwater surveillance without rebuilding its entire product stack.
In this framing, defense is not the end market.
It is an accelerant for deep tech.
Dual use is not necessarily dilution. It can be leveraged if the underlying technology genuinely transfers and the company maintains execution discipline.
Procurement and Data Are the Real Battlefield
Beyond the defense versus dual-use debate, the episode converges on the actual choke points: procurement and data.
Europe’s defense market is structurally fragmented. Even within NATO, sovereign data constraints and national procurement rules make it difficult to deploy products seamlessly across allied nations. Startups face not one defense market, but many. The result is slow scaling, high integration cost, and limited repeatability.
The episode suggests that technology is not the only constraint.
Governance is.
Without cross-border procurement alignment and interoperable data frameworks, Europe will struggle to scale defense capability regardless of how many startups it produces.
The Flag Question
The conversation ends on the most strategic issue: whether European defense companies will ultimately be forced to pick a flag.
Europe lacks late-stage capital depth. As a result, even European “champions” often rely on US growth investors, Middle Eastern capital, or non-European balance sheets. A company can remain operationally European while becoming financially dependent on foreign capital.
This creates a governance reality. Ownership influences decision-making. Capital determines incentives. And in strategic categories, dependence is vulnerability.
The discussion is skeptical that Europe can produce a true “European Palantir” under the current market structure because Europe is effectively a collection of fragmented markets. The most plausible path forward may be coalitions of the willing: smaller multi-country blocks with aligned procurement and shared industrial priorities.
The Core Thesis
Europe’s defense renaissance is real. But it is structurally constrained by procurement fragmentation, growth capital scarcity, data sovereignty barriers, and cultural discomfort with defense-first positioning.
Dual use is often a label.
Defense-first is a strategy.
And Europe’s long-term question is not whether it can invent defence technology.
It is whether it can scale it without exporting ownership, control, and strategic leverage in the process.
