A New €500 Million Fund for European Defence

Earlybird and AVP, two prominent players in the European investment landscape, have joined forces to announce the launch of E2D, a €500 million growth-stage fund. This initiative focuses on defence and dual-use technologies, aiming to support European deeptech companies. The fund represents a strategic collaboration between the two firms, combining AVP's growth-stage and transatlantic investment experience with Earlybird's established track record in European deeptech investing.

The E2D team includes professionals with over a decade of experience in the defence and dual-use technology sector. The fund's Limited Partners comprise major financial institutions and corporates, with a first close scheduled for June 30. This move underscores the growing focus on innovation and technological sovereignty within a rapidly evolving sector.

Bridging a Strategic and Technological Gap

The launch of E2D comes at a time of significant increase in defence spending across Europe. France has committed €76 billion to defence investments, Germany €152 billion, while the European Union has outlined an €800 billion defence plan. Against this backdrop, E2D seeks to address a longstanding funding gap that has historically hampered European defence and dual-use companies, often forcing them to rely on overseas investors for growth capital.

Benoit Fosseprez, General Partner at AVP, emphasized the importance of this Franco-German alliance to move swiftly and invest in companies with the greatest potential impact. The goal is to support a new generation of European technology champions, essential for safeguarding the continent's sovereignty. This approach is particularly relevant for those evaluating on-premise deployment of critical solutions, where direct control over hardware and data is fundamental for security and compliance.

Investment Strategy and Expected Impact

E2D plans to invest in approximately 20 companies, with an average ticket size of around €25 million. The fund will focus on growth-stage businesses operating across key domains including space, air, land, maritime, and subsurface technologies, supporting both defence-focused and dual-use applications. This strategy aims to strengthen the operational capabilities of European armed forces and major industrial players, while also contributing to the development of commercial markets.

Roland Manger, co-founder of Earlybird, expressed enthusiasm for backing the best European high-growth, deeptech companies that will be instrumental in closing defence capability gaps. Beyond capital, the partnership aims to provide portfolio companies with access to a vast network of technology experts, operators, defence leaders, military procurement channels, and major industry players. The fund is also supported by an international strategic committee comprising military and industrial leaders from NATO, armed forces, and leading European defence companies, solidifying a resilient and sovereign ecosystem.

Prospects for European Technological Sovereignty

The E2D initiative reflects a growing awareness in Europe regarding the need to develop and control its own strategic technological capabilities. Reliance on external investors or providers for critical sectors like defence can entail significant risks in terms of security, data sovereignty, and decision-making autonomy. Investing in European deeptech companies not only stimulates innovation but also builds a more robust and independent technological infrastructure.

This approach aligns with AI-RADAR's philosophy, which emphasizes the importance of control and data sovereignty, often achievable through on-premise or self-hosted deployments. For organizations operating in sensitive contexts, the ability to manage their local stacks and hardware for LLM inference and training becomes a distinguishing factor. E2D, while not specifically an AI fund, indirectly contributes to this objective by financing the technological foundations that can enable such solutions in the near future.