European defense industry investments rose to a new record high in 2024, with the United Kingdom topping direct private equity investments in the sector, new research from Heligan Group shows.
According to the Birmingham, England-based investment bank analysis, European startups received venture capital funding of about $5.2 billion, almost a fivefold jump in six years, Calibre Defence reported Tuesday.
Heligan counted 191 direct private equity investments in the U.K. defense sector between 2018 and 2024, and 202 U.K. defense companies that received venture capital investments from 2022 to 2024.
The research attributed the investment increase to geopolitical tensions in the region, particularly the Russia-Ukraine war. It highlighted allied efforts, such as the European Union’s $10.8 billion European Defence Fund budget to co-finance research and development partnerships from 2021 to 2027. Another growth driver is the $1.3 billion NATO Innovation Fund for deep-tech startups.
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After Brexit, the United Kingdom has also advanced its innovation programs, including the National Security Strategic Investment Fund. In addition, London has committed to increasing defense spending to 2.5 percent of the country’s gross domestic product by 2027.
Meanwhile, the British Ministry of Defence plans to allocate at least 7 percent of its budget to research and development by 2030, almost doubling its annual funding. The unprecedented increase in British defense companies’ mergers and acquisitions further supports the rise in U.K. defense investments.