Warsaw has become an unlikely epicenter of Europe's latest venture capital obsession: turning existential dread into investment returns. Expeditions Fund's €100 million raise, with plans for €150 million total, represents more than just another defense tech fund launch. It's a window into how European capital markets are processing the uncomfortable reality that peace was always temporary, and the future will be decided by whoever builds the best algorithms first.
The numbers tell the story of an industry awakening to its own strategic vulnerability. European defense tech funding jumped 26% in the first half of 2025 to €946.3 million, making it a top-five funded sector for the first time. Meanwhile, the NATO Innovation Fund reports that defense, security, and resilience funding reached $5.2 billion in 2024—a 30% increase over two years, even as overall VC funding contracted 45%.
This isn't just growth; it's a fundamental reordering of investment priorities. When Munich emerges as Europe's top VC hub for defense tech, when Polish funds are backing quantum cryptography startups, when the EU commits €5.4 billion through its Defense Fund since 2021, we're witnessing more than market dynamics. We're watching an entire continent hedge against its own survival.
Expeditions Fund's portfolio reveals the practical reality of modern conflict: it's less about tanks and more about algorithms. Their investments span cybersecurity firm BotGuard (€12 million Series A), quantum company Project Q (€7.5 million seed), and privacy-focused Proofs (€2.4 million). These aren't traditional defense contractors—they're dual-use technology companies that happen to have military applications.
The distinction matters because it represents a fundamental shift in how warfare gets funded and developed. Unlike previous defense booms driven by government procurement, this wave is powered by venture capital seeking commercial applications with strategic upside. German drone unicorn Quantum Systems raised €160 million not just for military contracts, but because its AI-powered drones work for mining, energy, and disaster response.
Dr. Mikolaj Firlej, Expeditions' co-founder, frames this explicitly: "Europe no longer has the luxury of time or waiting on the sidelines." The urgency isn't subtle. When venture capitalists start talking about "geopolitical renewal" and "the economic future that will define Europe's role in the 21st century," they're not discussing market opportunities—they're discussing survival strategies.
This dual-use approach creates something historically unprecedented: a defense industry that doesn't depend entirely on government contracts. When Helsing raised €600 million at a €12 billion valuation for AI battlefield software, they weren't just building military tools—they were creating commercial AI platforms that happen to excel at warfare.
The geopolitical subtext becomes explicit when examining the fund's limited partners. The NATO Innovation Fund appears as an investor in Expeditions Fund II, alongside the Polish Development Fund and "early executives from Skype, Wise, Bolt, and Snowflake." This isn't venture capital—it's strategic alignment disguised as investment strategy.
NATO's €1 billion Innovation Fund represents the Alliance's first venture into sovereign venture capital, backing startups across 24 member nations. Their mandate reads like a strategic defense document: "investing in cutting-edge science and engineering startups to strengthen the defence, security and resilience of our nations." When military alliances start acting like venture funds, the boundaries between diplomacy, defense, and capitalism blur beyond recognition.
The timing is telling. Expeditions launched in 2021, before Ukraine made defense tech politically acceptable. Their Fund I achieved top 0.01% global performance, according to Cambridge Associates benchmarks, by betting on European security companies before it became obvious. They backed 30% of Europe's top 30 most-funded defense startups—not because they predicted war, but because they understood that peace was always an aberration.
Now that thesis has become conventional wisdom. European defense tech deals jumped 54% in the first half of 2025, with most early-stage investments flowing to companies building AI-powered autonomous systems, quantum encryption, and cyber warfare tools. The technologies that seemed like science fiction five years ago are now essential infrastructure.
There's particular irony in Warsaw becoming a defense tech hub. Poland, having experienced both Nazi occupation and Soviet domination, understands existential threats more viscerally than most Western European nations. When Polish venture capitalists fund quantum cryptography and autonomous weapons, they're not just seeking investment returns—they're building insurance policies against historical patterns.
Expeditions' geographic focus reflects this reality. Their portfolio spans from Munich (Project Q's quantum computing) to London (Labrys' cybersecurity) to Tallinn (BotGuard's AI defense). They're not just funding companies; they're building a distributed defense technology ecosystem that can't be eliminated by targeting a single location.
The fund's emphasis on "breaking down institutional resistance and driving policy changes" reveals the political dimension of their work. European defense procurement has historically favored established contractors over innovative startups. When venture funds start advocating for policy changes, they're not just seeking market access—they're reshaping how nations think about security.
The cynical reading is obvious: venture capitalists are capitalizing on geopolitical anxiety to justify massive investment returns in sectors previously considered toxic. When Expeditions claims they're "investing in the early-stage Founders who will define the future European economic and defensive security," it sounds like marketing speak designed to make weapons development feel like social impact investing.
But dismissing this wave as opportunistic misses the underlying technological shift. Modern warfare increasingly resembles software development, with success determined by who can deploy better algorithms faster. When Ukrainian drone operators collaborate directly with domestic manufacturers to iterate battle-tested designs in real-time, you're watching the future of defense innovation.
The companies Expeditions funds aren't building traditional weapons—they're building the infrastructure for algorithmic conflict. Quantum cryptography protects communications. AI-powered drones provide surveillance and strike capabilities. Cybersecurity platforms defend critical infrastructure. These technologies don't just serve military applications; they define the parameters of modern statecraft.
Europe's defense tech boom reveals a continent coming to terms with its own vulnerability. Whether that translates to sustainable businesses or just expensive insurance policies depends on factors beyond venture capital modeling: geopolitical stability, regulatory frameworks, and the uncomfortable question of whether preparing for conflict makes it more or less likely.
But here's what's certain: the companies building the tools for tomorrow's conflicts are being funded today, by investors who understand that in a world where software eats everything, it eventually eats warfare too.
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