Lakestar closes $300M fund for European defense tech

Key Takeaways

• Lakestar closed a $300 million Resilience I Fund focused on European defense and dual-use technologies
• Portfolio companies have raised over $5 billion and generate billions in government contracts
• The fund aligns with EU efforts to reduce dependence on American technology providers

Lakestar, one of Europe's top venture capital firms, has closed a $300 million fund dedicated to defense and dual-use technologies. The Resilience I Fund, announced July 17, backs startups building products for militaries and governments across Europe and allied nations.

The timing is deliberate. Brussels is growing increasingly anxious about Europe's dependence on American tech companies, and Lakestar is positioning itself as the financial engine for the continent's push toward technological independence.

What Lakestar is betting on

"Freedom is not for free," wrote Klaus Hommels, Lakestar's founder and chairman, in a statement last year that the firm cited in its announcement. "Sovereignty and Europe's capabilities in critical technologies are a core concern for all of us."

The firm already has skin in the game. Its existing portfolio includes 20 founders building defense and dual-use products, plus others operating in stealth. Collectively, these companies have raised over $5 billion in private capital and employ more than 5,000 people. Lakestar calls this cluster "one of the most important and fastest-growing talent pools in European technology."

Notable names in the portfolio include Helsing, a defense AI company, and Auterion, which builds software for autonomous drones. Lakestar has also backed tech giants outside defense, including Revolut and Spotify.

Why European governments are paying attention

The fund arrives as EU policymakers escalate their rhetoric about technology sovereignty. In June, the European Union unveiled a strategy to reduce dependence on American companies in cloud computing, AI, semiconductors, and digital infrastructure. Officials described it as both an economic and national security imperative.

The European Systemic Risk Board added weight to these concerns on July 7. Its report warned that the concentration of top AI companies outside the EU exposes the region to "strategic dependency and geopolitical risks." The board urged the EU to expand its "capacity, expertise and strategic autonomy" in artificial intelligence.

Lakestar's fund is a direct response to these warnings. Defense tech VCs in Europe have seen funding increase roughly 340% between 2021 and 2024, according to industry estimates. But the gap remains large. Munich Security Report estimates suggest Europe needs roughly €47 billion in annual defense tech investment to achieve strategic autonomy.

The dual-use calculus

Dual-use technologies sit at the heart of Lakestar's thesis. These are products built for commercial markets that can also serve military applications. Think autonomous systems, secure communications, satellite imaging, and AI for logistics.

The appeal for VCs is clear: dual-use startups can generate commercial revenue while pursuing government contracts, reducing the risk profile compared to pure defense plays. They also face fewer stigma issues with limited partners who remain skittish about funding weapons systems directly.

For founders, the path is still harder than building a SaaS product. Government procurement cycles stretch months or years. Export controls limit which markets you can enter. And hiring security-cleared engineers is expensive.

But the revenue, when it arrives, tends to be sticky. Governments do not switch defense contractors on a whim.

What this means for European fintech

Defense tech and fintech might seem like separate worlds, but they share infrastructure concerns. Both depend on secure cloud computing, both require compliance with complex regulations, and both are increasingly shaped by AI.

If Europe successfully builds domestic alternatives to American cloud and AI providers, fintech companies benefit too. They gain options beyond AWS, Azure, and Google Cloud for meeting data residency requirements. They access European AI models trained without concerns about US surveillance laws.

The inverse is also true. If Europe's tech sovereignty push stalls, fintech companies will continue navigating the tension between EU regulations that demand data localization and American platforms that dominate the market.

Frequently Asked Questions

What is Lakestar's Resilience I Fund?

A $300 million venture capital fund focused on European defense and dual-use technologies. It invests in startups building products for militaries and governments.

What companies has Lakestar previously invested in?

The firm has backed Revolut, Spotify, Helsing (defense AI), and Auterion (autonomous drone software), among others.

Why is Europe pushing for tech sovereignty?

EU officials view dependence on American technology providers as both an economic vulnerability and a national security risk, particularly in AI, cloud computing, and semiconductors.

What are dual-use technologies?

Products designed for commercial applications that can also serve military purposes, such as autonomous systems, satellite imaging, and secure communications.

How much investment does Europe need for tech sovereignty?

Munich Security Report estimates suggest roughly €47 billion in annual defense tech investment would be needed for Europe to achieve strategic autonomy.

Source: PYMNTS | / PYMNTS