Tech Business & Industry Moves / Funding rounds

The surge in funding for European defence tech startups is largely driven by rising geopolitical tensions and increased venture capital interest. This trend reflects a broader shift towards investing in defence technologies, including AI, autonomous systems, and cybersecurity, as seen in the growth of funds like the NATO Innovation Fund and the European Defence Fund[2][3].

The European Defence Fund (EDF) plays a crucial role in supporting the development of defence technologies across Europe by providing substantial funding for collaborative research and development projects. It aims to enhance industrial competitiveness, reduce investment fragmentation, and foster interoperability among EU member states. The EDF has allocated significant funds, such as €1.065 billion for the 2025 Work Programme, focusing on areas like ground combat, space, and air combat[1][4].

Dutch startups raised only $503 million in Q1 2025, the lowest quarterly total since the early days of the COVID-19 pandemic, due to a slowdown in investment activity. However, funding rebounded strongly in Q2, with startups securing $856 million, leading to a total of $1.4 billion raised in the first half of 2025. This recovery was largely driven by a surge in biotech investments, which accounted for half of the top 10 funding rounds.

Biotech was the leading sector in the Netherlands for startup funding in H1 2025, with half of the top 10 funding rounds coming from life sciences companies. This dominance highlights the sector's growing importance in the Dutch tech ecosystem and its ability to attract significant investment, even as overall startup funding fluctuated.

Early-stage startup funding refers to investments made in companies that are often under five years old and are still testing their product or market fit. This stage is considered risky for investors but offers high potential rewards if the startup succeeds. In Europe, early-stage startups raised $5.4 billion in Q1 2025, indicating steady investor confidence despite global market caution.

European venture capital investment is seen as resilient because, despite a global market reset and cautious investor behavior, funding levels have remained relatively stable. For example, European startups raised €19 billion in the first half of 2025, with strong activity in sectors like AI, space, and fusion energy. Investors are focusing more on startups with clear paths to profitability and long-term growth, which supports sustained innovation and growth in the region.

Startup funding typically progresses through several stages: pre-seed, seed, Series A, Series B, Series C, and beyond. Pre-seed funding is the earliest phase, often used to develop the initial idea or minimum viable product (MVP). Seed funding supports product launch and early market research. Series A funding marks the start of venture capital investment aimed at optimizing the business and scaling growth. Series B and C funding stages focus on expanding market reach, increasing revenue, and preparing for larger scale operations or an IPO. Each stage corresponds to the startup's maturity and funding needs.

Startup funding provides the financial resources necessary for tech ventures to develop products, hire talent, and expand operations. Each funding round often involves legal agreements that define equity ownership, investor rights, and compliance with regulations. As startups progress through funding stages, they must navigate increasingly complex legal frameworks to protect intellectual property, manage investor relations, and ensure regulatory compliance, which are critical for sustainable growth and successful scaling.