Europe’s defence and security landscape is undergoing a profound transformation. Rising geopolitical tensions, increasing defence budgets, and a growing focus on technological sovereignty are driving unprecedented investment into military capabilities and strategic technologies. At the same time, a new generation of defence and dual use startups is emerging across the continent, developing advanced solutions in areas such as autonomous systems, space technologies, artificial intelligence, cybersecurity, sensing, and advanced manufacturing. Despite this momentum, many European companies have historically struggled to access the growth capital required to scale globally. To address this challenge, venture capital firms Earlybird and AVP have joined forces to launch a major new investment vehicle dedicated to strengthening Europe’s defence innovation ecosystem.
The two firms have announced the launch of E2D, a €500 million growth stage fund focused on investing in European defence and dual use technology companies.
The fund represents a strategic partnership between Earlybird and AVP and aims to support companies developing technologies that can strengthen Europe’s security, resilience, and industrial capabilities.
The first close of the fund is scheduled for June 30 and has already attracted support from major financial institutions and corporate investors.
Addressing a Critical Funding Gap
The launch comes at a time of rapidly increasing defence investment across Europe.
Governments throughout the region are committing substantial resources to modernising military capabilities and strengthening strategic autonomy.
At the same time, technology driven defence companies are becoming increasingly important contributors to national security and industrial competitiveness.
However, while early stage investment in defence innovation has improved in recent years, many companies continue to face challenges securing the large growth rounds needed to scale internationally.
This funding gap has often forced promising European businesses to seek support from overseas investors.
E2D has been created specifically to address this issue by providing substantial growth capital to companies developing strategically important technologies within Europe.
Combining Deeptech and Growth Expertise
The partnership brings together two firms with complementary strengths.
Earlybird has built a strong reputation as one of Europe’s leading deep technology investors, supporting innovative companies across multiple sectors for many years.
AVP contributes extensive experience in growth stage investing and international market expansion, particularly through its transatlantic network.
Together, the firms aim to provide portfolio companies with both capital and strategic support as they move from emerging innovators to large scale industry leaders.
The investment team includes specialists who have been active within defence and dual use technology markets for more than a decade, providing deep sector expertise and industry knowledge.
Focus on High Growth Defence Technologies
E2D plans to invest in approximately 20 companies, with an average investment size of around €25 million.
The fund will target growth stage businesses developing technologies across a broad range of domains including space, air, land, maritime, and subsurface systems.
The strategy encompasses both purely defence focused applications and dual use technologies that can serve commercial and government markets simultaneously.
By supporting companies operating across multiple sectors, the fund aims to accelerate innovation while helping create technologies capable of delivering both economic and strategic value.
This dual use approach reflects a growing trend within the European technology ecosystem, where innovations developed for commercial purposes increasingly have relevance for defence and security applications.
More Than Capital
Beyond financial investment, E2D intends to provide portfolio companies with access to an extensive network of industry experts, operators, defence leaders, procurement channels, and major industrial organisations.
This support is expected to help companies navigate complex defence procurement processes, build strategic partnerships, and accelerate market adoption.
The fund is also supported by an international strategic committee comprising military leaders, NATO experts, armed forces representatives, and executives from leading European defence companies.
This network provides portfolio businesses with valuable operational insight and direct exposure to end user requirements.
Strengthening Europe’s Defence Ecosystem
As Europe seeks to build greater technological sovereignty and strengthen its defence industrial base, access to growth capital is becoming increasingly important.
Through E2D, Earlybird and AVP aim to help create a stronger pipeline of globally competitive defence technology companies capable of addressing critical capability gaps while supporting broader commercial innovation.
With €500 million dedicated to growth stage investment, the fund represents one of the most significant commitments to European defence and dual use technology in recent years and highlights growing confidence in the sector’s long term potential.
