Europe is finally taking defense seriously. A proposed 150-billion euro ($171 billion) intergovernmental fund marks a decisive shift from the days of disarmament and dependency.
But money alone won’t deliver strategic autonomy. For that, we also need a cultural shift — especially among our entrepreneurs, investors, and institutions.
In recent decades, defense budgets shrank, and procurement focused on a few large contractors. These companies delivered predictable results but at the cost of speed and innovation.
Startups, despite being hungry, creative, and agile, were dismissed as risky and unnecessary. That model no longer works in a world where threats move fast and technological advantage is fleeting.
To build a new model, we can look to biotech.
Lessons From Biotech
In the 1980s and 1990s, big pharmaceutical companies realized they couldn’t innovate fast enough in-house. They stepped back from early-stage research and let venture capital fund a wave of biotech startups. Many failed. But the ones that succeeded developed breakthrough drugs, and then the big players acquired them.
The model worked because it embraced risk, backed talent, and was supported by a funding ecosystem that accepted failure as part of the process.
European defense needs the same structure. Legacy contractors still matter, but they are slow to adapt.
Meanwhile, a generation of small, high-tech science-led startups is eager to move fast, test bold ideas, and protect the continent they call home. What they lack is funding — and permission to fail.
Financial Backing
Our experience at Cailabs has shown what’s possible when capital and innovation align. But too many promising European defense and dual-use startups never scale — not for lack of talent, but because they can’t get the funding.
Venture capitalists have traditionally favored software-as-a-service companies: low-risk, capital-light, and easy to scale.
Defense startups, by contrast, often involve hardware. That means factories, inventory, and patient capital. Until recently, there was also stigma: defense was seen as unethical, controversial, or simply too difficult to understand. Many funds still steer clear, and Europe’s capital markets have done little to close the gap.
That is starting to change. But not fast enough.
Fear of Failure
In the US, failure is seen as a stepping stone to success. Try, fail, learn, try again — that’s how most of Silicon Valley was built.
In Europe, failure carries stigma. Founders can be cautious, not because they lack ambition, but because the system punishes risk.
That caution is understandable. But it is incompatible with strategic autonomy.
We need a startup culture that celebrates experimentation and accepts that failure is part of progress. Not every venture will succeed. But the wins will more than pay for the losses.
That’s why defense innovation demands what economists call a “barbell strategy:” hedge your bets with conservative institutions, but take bold risks through startups.
Momentum Is Building
Defense agencies are opening up to off-the-shelf solutions.
Dual-use tech — long the norm in space — is gaining traction. And geopolitical instability, from Ukraine to the Indo-Pacific, has jolted Europe into a more realistic mindset.
But the window is narrow, and the clock is ticking.
We need venture capital funds willing to gamble. Banks that understand defense. Clear exit paths for investors. And founders brave enough to fail, get back up, and try again — publicly, proudly, relentlessly.
Strategic autonomy won’t be achieved by playing it safe. It will come from backing bold ideas, betting on talent, and embracing the risk that real innovation demands.
Jean-François Morizur is Founder and CEO of Cailabs.
The views and opinions expressed here are those of the author and do not necessarily reflect the editorial position of NextGen Defense.
