EU military startups are reportedly turning the country into a warfare testing lab in the race to arm Kiev
The Ukraine conflict has triggered a “gold rush” for EU arms manufacturers amid a boom in weapons technology investment, with the battlefield becoming a testing ground for innovations, the New York Times reported on Tuesday.
According to the outlet, Western governments are channeling billions into warfighting and dual-use startups to accelerate the move from prototype to combat, diverting capital away from traditional defense contractors.
The NYT cited the example of Munich-based Helsing, which has armed Ukraine with drones and upgraded them every few weeks to counter battlefield shifts. Founded in 2021 with seed backing from Spotify co-founder Daniel Ek, Helsing is now valued at about $12 billion, making it one of Europe’s most valuable startups.
”Before, no European V.C. [venture capital] was interested in defense,” Helsing co-founder Torsten Reil told the NYT, adding that now “everyone wants to invest in defense.”
Global venture-capital funding for defense firms jumped 33% last year to $31 billion, according to consulting firm McKinsey. Private investment in European military startups between 2021 and 2024 was five times higher than in the previous three years, the NYT said.
The Ukraine conflict battlefield has become a proving ground for emerging systems, the outlet writes, noting that Germany’s Quantum Systems is deploying AI-powered reconnaissance drones that detect enemy artillery by sound.
”The whole development in the drone industry is coming right from the Donbass, not from Silicon Valley,” Matthias Lehna, Quantum’s business-development director, told the newspaper.
According to the report, 17,619 dual-use tech scale-ups (companies beyond start-up stage) now operate across NATO states – about 27% of all scale-ups in the region. Investment in dual-use tech rose to $1.2 trillion as of May 2025, up 25% from late 2024.
Moscow has repeatedly warned that Western arms shipments only prolong the Ukraine conflict and human suffering with little impact on the front lines and only risk further escalation, potentially leading to a direct conflict between Russia and the West.
Russian officials have also accused Ukrainian forces of misusing Western-supplied weapons, including for deliberate strikes on civilians.
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