Hi there, Welcome to the 136th edition of Heartcore Insights, curated with 🖤 by the Heartcore Team. Going forward, we will share short commentary from our Partner team on the markets shaping European tech and venture. Let us know what you think about the new format. If you missed the past newsletters, you can catch up here. Now, let’s dive in! Brief Market CommentaryDay 90 of 2026 (only). Day 437 of Trump 2.0 (70% of term remaining). The third energy crisis for Europe in recent memory (pandemic + Ukraine + Iran). And yet… “geopolitics don’t always matter in the way that market participants expect”… Despite the confluence of political, technological and economic moments of maximum uncertainty, there is palpable excitement in the Euro VC market about the diffusion of AI and progress in quantum technologies. We are seeing a steepening of the power law, where the top 5% of companies can raise almost unlimited capital. For the rest, it is a long, steady build and capital availability seems more similar to historical average. We think this is a good thing as we have always preferred long-term compounding over blitzscaling, not least to limit dilution for founders. ~Max Niederhofer, Partner, Heartcore Capital Why Did We Invest in EGIDE?Investing in defence is not neutral. It forces you to take a position, implicitly or explicitly, on what role technology should play in conflict. For a long time, we were not comfortable crossing that line. And yet, last week we announced our participation in EGIDE’s €8M Seed round. It is our first investment in defence at Heartcore Capital. A New Era of Warfare, and a European ParadoxThe war in Ukraine has made something very visible: we have entered a new era of warfare. Cheap, mass-produced system, particularly drones, can now overwhelm highly sophisticated and expensive defence infrastructures. Shahed drones cost $20-30k and can be produced in days. They are used for saturation, not precision. On the other side, interception systems such as Patriot missiles can cost millions per shot and take months to produce. Even when interception works, the economics don’t. This shift has exposed a structural imbalance, and Europe is not ready. Despite rising defence budgets, many systems remain designed for a different era. Recent incidents: from unidentified drones near major infrastructure to repeated airspace violations in countries like Poland and Romania, highlight a recurring issue: slow response times, unclear attribution and inconsistent interception capabilities. Europe is already being tested at the margins. From Ethical Hesitation to Investment ConvictionFor a long time, this translated into a real hesitation on our side, not only from a pure “investor” standpoint, but also an ethical one. Defence comes with everything venture capital tends to avoid: long sales cycles, concentrated customers, complex procurement processes and unclear exit paths. But over time, a different picture emerged. Europe faces a structural innovation gap, driven by years of underinvestment, and combined with a renewed willingness from governments and stakeholders to support new players. And precisely because the space is so difficult, it creates strong barriers to entry for the teams that can navigate it. Why EGIDEThis is where EGIDE stood out. Simon and Florian both from MBDA, have spent years building complex defence systems from the inside. They understand not only how these systems work but where they break.
Their core insight is that the issue is not just cost, it’s how these systems are built, with architectures that make them hard to iterate, scale or adapt. Traditional systems are hardware-first, optimised for performance but not for iteration or scale. EGIDE takes the opposite approach: a software-defined platform, where guidance, sensing and control are modular, enabling faster adaptation and scalable deployment. At the core is Mystique, a hardware-agnostic platform integrating sensors, AI-driven detection and layered response capabilities. EGIDE is not building a single product, but a platform designed to evolve into a broader family of systems, and ultimately a new kind of defence company. What convinced us most was the team. They combine a rare technical depth with a clear vision of what needs to be built, in what order and why. Europe is entering a new phase, where security and sovereignty are central again. This will require not just more capital, but new types of companies that are faster, more adaptable and built of modern conflict. We believe EGIDE is one of the first credible teams in Europe attempting to do exactly that. And we are proud to support them! As always if you are building in this space, we’d love to talk. ~Bérenger Teboul-Danguin, Associate, Heartcore Capital
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