BAE Systems invests €50M in European defence-tech startups
▼ Summary
– BAE Systems is investing €50m into European defence-tech venture capital funds, with €25m going to Lakestar and Expeditions as part of its Launchpad programme.
– The Launchpad initiative aims to spin out BAE’s own lab technology and back outside founders to bring new ideas to defence.
– By funding smaller, faster startups that could disrupt traditional primes, BAE hedges against being blindsided while offering startups access to its customer base.
– The investment capitalizes on the defence-tech boom driven by Russia’s war on Ukraine and the EU’s ReArm Europe plan, which has made the sector a VC hotspot.
– The €50m sum is small relative to BAE’s revenue, serving more as a strategic signal to gain early insight into emerging defence founders and funds.
BAE Systems, the UK’s largest defence contractor, is committing €50 million to venture capital, betting that the startups it supports today could define the weapons it sells in the future. The funding will be directed toward European defence-tech VC funds, with €25 million allocated to two specific vehicles: one managed by Klaus Hommels’ Lakestar and another by Polish firm Expeditions. This marks the second phase of BAE’s ‘Launchpad’ programme.
An incumbent backing its disruptors
BAE is unusually candid about the dual purpose of this initiative. Launchpad is designed both to spin out the company’s own laboratory innovations into commercial startups and to invest in external founders who, as commercialisation chief Dave Ewing put it, “can bring something new to defence.” In effect, a prime contractor is funding the small, agile companies that, in another narrative, exist to disrupt primes like BAE. This is as much a hedge as a gift: better to own a piece of the insurgents than to be blindsided by them. For startups, the real incentive is access to BAE’s customer base across defence, energy, and advanced manufacturing.
Riding the rearmament boom
The timing is deliberate. Russia’s war on Ukraine and the EU’s ReArm Europe plan, which aims to mobilise up to €800 billion, have transformed defence-tech from a VC pariah into its hottest sector. Companies like Helsing are now among Europe’s most valuable private firms. Capital is pouring in from all sides. The NATO Innovation Fund is seeding its own network of defence VCs, while surging defence stocks have made the entire category fashionable. BAE’s move positions a prime contractor firmly within that flow.
A signal more than a cheque
For all the fanfare, €50 million is a modest sum for a company of BAE’s scale, which generates tens of billions in revenue. This reads more as a strategic signal and a foot in the door of key funds than a market-moving investment. It benefits the VCs beyond the headline number: it adds to Expeditions’ new fund, reportedly approaching €200 million, and Lakestar’s roughly $300 million defence vehicle, while giving BAE early visibility into whatever Europe’s next defence founders build. As Expeditions’ Mikolaj Firlej put it: “Our security can no longer be assumed; it has to be built.”
(Source: The Next Web)
