How private investment is transforming defence sector

Defence Tech investors shared valuable insights at today’s Engaged Investments Conference. Long procurement times, limited exit options, and often extensive R&D require a different approach to investing in Defence Tech. Despite these challenges, institutional investors appear to show a growing appetite for this sector.

Private investment in defence is accelerating—and 2025 marks a generational shift. Realigned public policy, dual-use technologies and the rise of DefTech are transforming the sector from niche to mainstream. Our latest blog post from Andrew Bozzato and Bishoy Attia explores: ➡️ Canada’s historic defence spending commitments ➡️ The role of dual-use technologies in attracting private capital ➡️ Global trends driving VC and private equity interest in defence tech ➡️ Opportunities and challenges for investors in this evolving landscape Read the full post here: https://ow.ly/1cGR50XrYLi #DefenceTech #PrivateEquity #Investment #Policy

Great news for innovators in aerospace and defence industries in AB. The Opportunity Calgary Investment Fund, along with PrairiesCan and Boeing Canada, is investing into the Xpand Commercialization Hub by ConvergX, a project valued at $9 million. The first-of-its-kind initiative is designed to accelerate the commercialization of dual use technologies for both civilian and defence applications.   https://lnkd.in/g5DTgvPn

Ottawa mayor Mark Sutcliffe today unveiled a defence innovation hub strategy, spearheaded by Invest Ottawa, that hopes to attract up to $3 billion in public-private investment in the region’s defence innovation sector over the next five years. #CDNTech #DefenceTech #Innovation

🇪🇺 Europe’s defence tech market isn’t what most investors think it is. More than €5 billion has already flowed into European defence and dual-use ventures this year, and over 10% of all venture capital across the continent. But for many of those writing the cheques, this is unfamiliar terrain. ⏩ Capital is moving fast. ⏪ But speed isn’t strategy. The real complexity isn’t in the technology; rather, it’s in the translation... export controls, NATO procurement, interoperability standards, security clearances. What once looked like friction is quickly becoming the competitive moat. The next few years will separate fast money from smart money. ✅ One will chase headlines. ✅ The other will build enduring companies. The difference won’t be who invests in national security, sovereignty and resilience, it'll be who understands it. And, who can translate between founders, regulators, and policymakers at the point where national security meets market opportunity. Read more → https://lnkd.in/epUTY9pK #DefenceTech #DefenceInvestment #StrategicAutonomy #SmartCapital #DualUseTechnology #EuropeanInnovation #VentureCapital #PrivateEquity #SecurityInnovation Fulcrum

Forbes suggests Canada’s new defense investment pledge might do more than strengthen security. It could help close the country’s long-standing innovation and IP gap. By funding high-tech, dual-use projects, Canada could create the long-term opportunities that keep great ideas and talent at home. 📖 Read more from Forbes Technology Council: https://hubs.li/Q03QWHqB0 #CanadianInnovation #TechStrategy #IPProtection #DefenseSpending #TeleGlobal

ccelerating Europe’s Defense Modernization and Innovation Ecosystem Europe’s defense and infrastructure sectors require rapid modernization to meet emerging threats and technological challenges. Private equity funds and fund of funds like ours serve as catalysts in this transformation, providing the necessary capital, strategic guidance, and industry connections. Our investment approach is designed to identify disruptive technologies and innovative startups that can revolutionize defense capabilities. Partnering with us allows European governments to access these high-growth sectors without bearing all the risks alone. We support early-stage R&D, scale-up efforts, and technology commercialization, which are crucial for maintaining strategic sovereignty. Equally important is the ability to bring a global perspective. Our extensive network of international investors and industry partners enables us to facilitate cross-border collaborations, joint ventures, and access to global markets. This connectivity accelerates the deployment of best-in-class technologies and best practices across Europe. Furthermore, private equity funds like ours have a proven track record of transforming small and mid-sized firms into sector leaders. This scaling process creates robust supply chains, fosters innovation clusters, and enhances Europe’s competitiveness on the world stage. By partnering with us, Europe can leverage this expertise to develop a vibrant, sustainable defense industry. In sum, collaboration with private equity funds is not just a source of capital but a strategic partnership that fuels innovation, accelerates modernization, and builds a resilient, forward-looking defense ecosystem for Europe.

Canada's new defence commitment - 5% of GDP by 2035 - could be the move that changes everything for our startup ecosystem. Here's what makes defence a game-changer:  ➡️ Multiyear contracts in a tough VC market, giving founders stability to scale.  ➡️ Dual-use tech with market potential. One investment, multiple payoffs.  ➡️ Capital-heavy tech that builds real competitive advantages and stronger IP. Done right, this isn't just about defence commitments, it's about anchoring world-class innovation in Canada. More on why this matters and how we capitalize on it in my latest Forbes piece. https://lnkd.in/gquWs77z 

Some useful info in this new report regarding the European Defence Technology Innovation System from the @European Institute of Innovation and Technology's 28DIGITAL "The European defence tech start-up ecosystem lags about five years behind its U.S. counterpart in terms of maturity. European start-ups often face bureaucratic hurdles and a lack of coordinated efforts across EU Member States. These barriers hinder their ability to scale quickly and attract significant investment, slowing the development of innovative defence solutions." "Despite these barriers, a report on the state of Defence, Security and Resilience in Europe published in February 2025 by the Nato Innovation Fund and research group Dealroom, reveals a record-breaking year for investing in this segment." "This highlights the critical role that the sector is playing in maintaining Europe’s technological edge and sovereignty. In particular, VC funding in the sector reached $5.2 billion in 2024, which is up nearly 5x in the last six years. In Europe, Germany and the UK are emerging as regional leaders. In particular, Munich emerged as Europe’s top hub, attracting almost  $1 billion in funding in 2024, followed by Oxford in the UK and Paris in France." "By requiring companies to first establish commercial viability before engaging with military applications, this approach creates delays in adopting cutting-edge technologies for defence purposes. In contrast, China’s civil-military fusion system ensures rapid integration of emerging technologies, giving it a competitive advantage. Instead of reforming slow and bureaucratic procurement processes, many defence agencies encourage private sector adaptation, shifting the burden of speed and innovation onto startups while maintaining outdated acquisition cycles." "In the European context, this issue is compounded by the lack of a cohesive defence industrial policy. While the EU has taken steps toward greater defence cooperation through PESCO (Permanent Structured Cooperation) and the EDF, significant barriers remain in streamlining procurement and scaling dual-use innovations across member states. Without more agile funding mechanisms and faster procurement processes, European defence actors may struggle to keep pace with global competitors." https://lnkd.in/dTXxci7b

𝐖𝐡𝐲 𝐓𝐫𝐚𝐝𝐢𝐭𝐢𝐨𝐧𝐚𝐥 𝐕𝐂𝐬 𝐑𝐞𝐣𝐞𝐜𝐭 𝐌𝐨𝐬𝐭 𝐃𝐞𝐟𝐞𝐧𝐜𝐞 𝐃𝐞𝐚𝐥𝐬 𝐁𝐞𝐟𝐨𝐫𝐞 𝐃𝐮𝐞 𝐃𝐢𝐥𝐢𝐠𝐞𝐧𝐜𝐞 𝐒𝐭𝐚𝐫𝐭𝐬 Most defence M&A opportunities never reach formal diligence. Not because the technology isn’t compelling, but because most investors ask the wrong questions first. Here’s what happens: A VC sees a dual-use venture with strong tech, credible founders, and a clear market. They run their standard playbook. Then, three weeks in, they discover the company can’t legally export, can’t access security clearances, or has no pathway to government procurement. Deal dead. Time wasted. Opportunity lost. The problem isn’t the company, it’s the 𝐞𝐯𝐚𝐥𝐮𝐚𝐭𝐢𝐨𝐧 𝐬𝐞𝐪𝐮𝐞𝐧𝐜𝐞. In commercial venture capital, you evaluate technology first. In defence, that’s backwards. At d5n, we’ve built 𝐓𝐡𝐞 𝐍𝐞𝐰 𝐃𝐞𝐟𝐞𝐧𝐜𝐞 𝐏𝐥𝐚𝐲𝐛𝐨𝐨𝐤, a framework that reorders how VCs, CVCs, and founders evaluate dual-use and defence ventures. 𝐕𝐞𝐭𝐨 → 𝐒𝐮𝐬𝐭𝐚𝐢𝐧𝐚𝐛𝐢𝐥𝐢𝐭𝐲 → 𝐃𝐞𝐟𝐞𝐧𝐬𝐢𝐛𝐢𝐥𝐢𝐭𝐲 → 𝐅𝐢𝐭 → 𝐄𝐱𝐞𝐜𝐮𝐭𝐢𝐨𝐧 It’s designed to catch regulatory, compliance, and strategic veto factors before you fall in love with the technology and the team. The result: faster decisions, lower risk of compliance surprises, and better alignment between capital and capability. We’ve just released the 𝐄𝐱𝐞𝐜𝐮𝐭𝐢𝐯𝐞 𝐒𝐮𝐦𝐦𝐚𝐫𝐲, a concise brief for investors and operators building the next generation of defence-grade ventures. If you’re building or backing defence tech in Europe, I’d like to share it with you. Like this post and drop a ‘𝐏𝐥𝐚𝐲𝐛𝐨𝐨𝐤’ in the comments or send me a DM. #NewDefence #DualUse #DefenceTech #VentureCapital #SovereignTech #EuropeanDefence