Hi there, Welcome to the 130th edition of Heartcore Insights, curated with 🖤 by the Heartcore Team. If you missed the past newsletters, you can catch up here. Now, let’s dive in! Prepared Mind – DefenceEurope’s Tech Sovereignty DilemmaOn September 22nd, Copenhagen airport was shut down for hours as drones loitered above its runways. Just days before, three Russian military aircraft violated Estonian airspace. Earlier this month, Polish defences fired live rounds at nineteen Russian drones crossing their skies, the first NATO country forced to do so since the war began. In Romania, another Russian drone was spotted flying over national territory. These incidents illustrate a new normal: Europe’s security environment is shifting fast, and the technologies that underpin sovereignty are no longer abstract concepts but immediate necessities. The world is tilting into a new era of great power competition, where blocs are forming and the global economy is fragmenting. Europe cannot afford to sleepwalk into dependency. Why now? For decades, defence was outside the European VC playbook. Ethical debates, slow procurement cycles and the dominance of traditional primes kept startups and investors at a distance. But the war in Ukraine has been an accelerator: it has forced governments, societies and investors to confront the reality of asymmetric threats, and sparked a wave of defence startups across the continent. That posture of VC disengagement now feels increasingly misaligned. Many institutional investors who were once cautious now urge us to take a closer look, though most often through the lens of dual-use. Budgets are rising, but industrial capacity is threadbare, and procurement still favours risk aversion over rapid adoption. The funding paradox is already visible. In AI, Europe has shown it can spawn global champions like Mistral, BlackForest Labs or ElevenLabs, but only because US growth investors stepped in after the early rounds. If we want to build sovereign defence champions, Europe cannot rely indefinitely on foreign capital to scale them. And the opportunity is not niche: Saab trades at ~$27B, Rheinmetall at ~$90B and Dassault at ~$53B. Defence is both strategically essential and capable of producing some of Europe’s most valuable industrial companies. New asymmetric threats, from cheap attack drones to quantum-secure comms, demand faster innovation than traditional primes can deliver. Startups are uniquely positioned to fill these gaps, and venture capital has a role to play in enabling them. At Heartcore, we acknowledge that many institutional investors see dual-use as the safer entry point. But our conviction goes further. We believe Europe can and must build both dual-use leaders and dedicated defence champions. Supporting them is not just a bet on financial returns. It is a bet on Europe’s future autonomy. As always, we would love to speak with any and all founders working in these spaces. ~ Bérenger Teboul-Danguin, Associate, Heartcore Capital
🇪🇺 Notable European early-stage rounds
🇺🇸 Notable US early-stage rounds
🔭 Notable later stage rounds
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Wednesday, October 1, 2025
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