A region shaped by proximity to conflict, cyberattacks, and legacy system failures is now emerging as Europe’s fastest-moving innovation frontier in defense and cybersecurity, with €2.81B publicly announced funding to date, a new report by The Recursive shows.
Titled “Who Is Protecting Europe’s Future?”, the report maps innovation activity across 19 countries and identifies the startups, investment flows, and public-private partnerships defining a growing and resilient ecosystem. This report aims to showcase not only the opportunities but also the existing gaps and limitations.
Developed with the support of leaders from across the ecosystem — including Wiser Technology, Presto Tech Horizons, Warsaw Equity Group, Plainsea, Pentest-Tools, Bronia AI, Kikimora, Nordic Recruitment and Consulting, NATO DIANA Accelerator Czechia, European Defense Tech Hub, Dealigence, DEFENDER Media, and Invest in Bravery, the report offers both quantitative mapping and qualitative analysis.
Across the region, more than 170 defense and dual-use tech startups and over 280 cybersecurity product companies are active. Unlike legacy players in Western Europe, many of these startups are advancing under high-pressure conditions, where proximity to threat creates not just urgency, but direct access to operational feedback.
What sets CEE apart in defense tech
From Ukraine’s battlefield-tested robotics and communications systems, to Estonia’s streamlined regulatory frameworks for defense procurement, the report outlines how CEE countries are moving from experimentation to deployment at a pace rarely seen in traditional military-industrial contexts.
Ukraine stands out with 65 early-stage defense startups, many of which were born out of immediate wartime needs. Estonia is pioneering a model in which private investors — not only state-backed funds — are allowed to support purely military technologies. In Poland, despite a record defense budget, public involvement still defines the investment landscape, creating constraints on venture-led innovation.
In cybersecurity, the region already hosts several globally recognized companies — Bitdefender in Romania, ESET in Slovakia, and Nord Security in Lithuania — which anchor emerging ecosystems of privacy, encryption, and AI-based threat detection tools.
The report also documents a rapid expansion in capital formation. While much of the early activity in CEE security tech was bootstrapped or grant-funded, the past two years have seen a structural shift.
New dedicated vehicles — such as Presto Tech Horizons’ €150 million fund and Warsaw Equity Group’s late-stage platform — are enabling dual-use startups to scale beyond national boundaries. Between January 2023 and November 2024, companies in the region raised more than €220 million in VC investment specifically for defense and dual-use technologies.
Startups are increasingly able to move from seed round to pilot deployment in a matter of months. In the Baltics and Ukraine, procurement cycles have shortened dramatically, creating conditions in which even small companies can iterate based on real-time field data.
Interoperability, security, and speed
Until now, the story of security innovation in CEE has remained scattered — captured in isolated announcements or national strategies. The report provides the first integrated view, combining company data, policy analysis, and insights from dozens of interviews with founders, investors, defense officials, and ecosystem enablers.
Country profiles in the report offer data on startup volumes, funding patterns, defense budgets, national cyber strategies, education systems, and international cooperation frameworks. Thematic chapters explore how the region is approaching critical topics such as interoperability, supply chain security, acoustic AI, and penetration testing — all within the context of rising geopolitical pressure and regulatory shifts at the EU level.
The last five years have tested Europe’s resilience — through war, energy shocks, pandemics, and digital disruption. In this environment, security technologies are no longer the exclusive domain of governments and legacy contractors. They are increasingly shaped by startups, dual-use applications, and transnational collaboration.
CEE’s response to these pressures is not simply to build local alternatives, but to design faster, leaner, and more adaptive solutions. As the report makes clear, this is no longer a peripheral story, but a core part of how Europe is redefining its strategic autonomy.
