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The launch of “Tough Tech by the Tough Ten” report — a first-of-its-kind map of defence, dual-use, cyber, and space innovations in the EU frontline states

November 24, 2025 – Vilnius, Lithuania


Coinvest Capital, NATO Innovation Fund (NIF), Depo Ventures, BSV Ventures, Balnord, and New North Ventures unveil the first-of-its-kind mapping of tough tech ecosystems spanning mission-critical defence, dual-use, and space innovations in the tough ten countries on the eastern frontline of the European Union -, from the Baltic to the Black Sea, including Finland, Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Romania, Hungary and Bulgaria.

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“When the going gets tough, the tough get going,” said former President of USA, Joseph P. Kennedy — and across Europe’s Eastern Flank, the phrase has taken on a literal dimension. NATO launched Operation Eastern Sentry, the European Union (EU) is building the European Drone Wall and Eastern Flank Watch, Baltic countries and Poland are creating the Eastern Shield and Baltic Defence Line.

 

Today, six VC funds actively investing in dual-use and defence, in partnership with market intelligence platform Dealroom, are launching the inaugural Tough Tech by the Tough Ten report. 

 

The report examines how these “Tough Ten” nations are mobilising talent, capital, and technology in response to shifting security realities. It covers priority innovation domains identified by NATO, from artificial intelligence and quantum technologies to hypersonics, energy, and next-generation communications. Publicly available market data, enriched by insights of contributing partners with “booths-on-the-ground”, are provided in a standardized non-sensitive manner, creating the first reliable baseline for cross-border comparison. It invites further collaboration ahead of its planned annual editions, positioning the Eastern Flank as an investment-ready frontier of strategic technology.

 

The report highlights the true dynamics of defence innovations in the region. Key findings include: 

  • The Tough Ten nations are outpacing the rest of Europe in mission-critical innovation. 

    • Between 2019–2022, tough-tech ventures made up 7% of all startups in these countries, compared to 5% across the rest of Europe. 

    • By 2023–2025, this share more than doubled to 16%, while the rest of Europe lags at 10%. 

  • By 2025, 53% of all Deep Tech and 23% of total VC investment will flow into Tough Tech - a dramatic shift from software convenience to hardware courage. 

 

Across the Tough Ten, defence tech investment remains concentrated in a few deep-tech verticals. Quantum computing, cryptography, and sensing ($606M) and Space and Satellite ($703M) dominate, accounting for most funding since 2019. Broader security segments, such as Energy Security ($253M) and Health Crisis Preparedness ($166M), highlight an expanded notion of defence, linking resilience and infrastructure. Core military areas - C4ISR ($22M), UAVs/UGVs ($28M), and Advanced Materials ($38M) - show steady but limited venture traction, reflecting Europe’s ongoing shift from early-stage R&D to scalable dual-use commercialisation.

 

What began as a necessity to deter and defend is fast becoming the region’s competitive identity. This surge underscores a decisive strategic shift: proximity to geopolitical pressure has translated into faster mobilisation, deeper investment in dual-use capabilities, and a sharper focus on technologies with defence and resilience applications. The - Tough Ten are no longer catching up; they’re leading Europe’s tough-tech race.

 

The steady climb since 2020 signals ecosystem maturity, where early-stage experimentation is giving way to scalable, capital-intensive breakthroughs in defence, autonomy, and deep industrial tech - proof that the region no longer only invents, but begins to industrialise innovation. 

 

“With geopolitical tensions on the rise, this report for the first time provides summary insights into the defence innovation trends, key ecosystem players, funding instruments available, and most notable startups to be watched and partnered with. Living at the borders of the European Union, having experienced in our own lifetime the Soviet Russian occupation, makes each of us very much aware of the price we all have to pay to protect our freedom and way of life. Currently, the highest price is being paid by the freedom fighters and people of Ukraine. Here in Europe, we must ensure that the time we still have is put to the best use, investing in deterrence, building resilience, and advancing innovation, capabilities, and competitiveness. Our region demonstrates just that by actions taken and changes initiated at increasing speed,” said Viktorija Trimbel, Managing Director at Coinvest Capital, who has initiated the report.

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“Tough tech is Europe’s new competitive edge. Founders on the Eastern Flank are proving that innovation is the real deterrent. With unprecedented capital ready to deploy into resilient, dual-use, and industrial tech, Europe has never had a stronger moment—or greater responsibility—to build the technologies that will secure its future,” shared Jarek Pilarczyk, Operating Partner at Balnord.

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“For us, tough tech is more than a category — the world runs on things that can’t fail, and that’s what our founders build. We invest in people who take on the hard problems because they have to, because it's a mission for them, not because it’s fashionable. That’s where real value and real impact come from. As BSV we’re glad to contribute towards this report and the community in the ecosystem, choosing to build and back things that last — and to stand for something that does too”, added Sandra Golbreich, General Partner at BSV Ventures.

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“Strength, not appeasement, preserves peace. True deterrence requires superior technology, skilled personnel who can wield it, and industrial capacity to sustain both. Our edge is synergy: established defense firms provide proven platforms, startups deliver breakthrough innovation, and capital enables rapid scaling. Together, these create an ecosystem that ensures no adversary would dare challenge us,” believes Petr Šíma, Partner at DEPO VENTURES

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"Defending the Alliance’s Eastern Flank isn’t just about presence - it’s about preparedness. Supporting and scaling local innovations is essential to that effort. Their technologies, which are informed by each nation's capability needs - across sensing, autonomy, and secure communications - are helping to ensure that our forward defences are smarter, faster, and more connected. The growth of these innovative companies strengthens not just the Eastern Flank, but the Alliance’s collective technological edge", emphasizes Patrick Schneider-Sikorsky, Partner, NATO Innovation Fund.

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"Europe, the United States, and all non-authoritarian allies are engaged in a global competition for technological and industrial leadership. Investing in innovation and tough tech that strengthens our collective industrial base is essential to ensuring our partners maintain a decisive edge, enhance resilience, and secure critical supply chains. The transatlantic ecosystem of investors, innovators, and operators is coming together—combining experience, capital, and risk-taking—to build the next generation of enduring technologies that will safeguard our shared security, particularly for those on Europe’s eastern flank.  I'm excited to see trust-based frameworks balancing domestic nexus and partnership diversity that is more organic than prescriptive", added Jeremy Hitchcock, co-founder at New North Ventures. 

 

For reasons of confidentiality, a number of active startups remain in stealth mode and are not listed in this inaugural edition.

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The authors invite readers to contribute verified additions and updates ahead of the 2026 annual release, ensuring that Tough Tech by the Tough Ten evolves into the standard cross-border reference for defence and dual-use innovation in Europe.

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The report can be downloaded from www.investingfordefence.com 

 

Contacts for media inquiries and further comments:

 

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About Coinvest Capital

 

Coinvest Capital is an early-stage venture capital fund, established by the national development bank ILTE and co-funded by the European Union and the Republic of Lithuania. We co-invest with business angels and other VCs in promising European start-ups that create value for Lithuania. The fund's portfolio includes 51 startups, with €59.6 million co-invested, of which €26.0 million is Coinvest Capital’s share. Investments in aerospace and defence have reached €13.3 million, including €5.7 million from the fund. 

 

The fund offers a unique profit-sharing programme, available to accredited international private co-investors, capping its IRR at 4%-8% per year. In the event of a successful exit, the fund distributes surplus to co-investors, enhancing their returns and catalyzing private coinvestment. 

www.coinvest.lt 

 

About Balnord

 

Balnord is a high-conviction early-stage investor focused on frontier and dual-use technologies that drive European technological autonomy and re-industrialization. With a strong track record and a network of experienced entrepreneurs and operators, Balnord supports founders in building companies that solve the most complex problems in critical industries across the Baltic Sea Region and beyond. Balnord Fund I is a €70M fund that is well on its way to oversubscription.

www.balnord.vc 

 

About NIF

 

The NATO Innovation Fund is a €1 billion venture capital fund, backed by 24 NATO Allies, that invests in deep tech to address challenges in defence, security, and resilience. The fund invests independently, with 24 nations supporting its portfolio’s success and helping provide deep tech entrepreneurs with access to both commercial and government markets.

 

Participating NATO Allies are: Belgium; Bulgaria; Czechia; Denmark; Estonia; Finland; Germany; Greece; Hungary; Iceland; Italy; Latvia; Lithuania; Luxembourg; Netherlands; Norway; Poland; Portugal; Romania; Slovakia; Spain; Sweden; Türkiye; United Kingdom.

www.nif.fund 


 

About BSV Ventures

 

BSV Ventures is an early-stage deep tech investor backing dual-use and strategic sovereign technologies across the Nordic, Baltic, and CEE regions. Investing at pre-seed and seed in teams building critical capabilities in all deep tech domains - companies with a fundamental scientific or advanced engineering and R&D-based edge or advantage. From AI and advanced compute, autonomy and robotics, sensing and resilient communications, space systems, and to med tech and life sciences – BSV supports founders as they move from scientific validation to real-world deployment and scale across commercial and strategic markets.

https://www.bsv.ventures/ 

 

About DEPO Ventures

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DEPO VENTURES is a Prague based investor backing Baltic’s and CEE’s boldest early-stage innovators, utilizing emerging and disruptive technologies for building critical infrastructure. We invest in pre-seed and inception phase and in founders building companies in sectors like Cybersecurity, Defence & Space, FinTech, SaaS & Infra, Climate & Industry, HealthTech. 

https://depoventures.com/ 

 

About New North Ventures

 

New North Ventures (NNV) invests in unconventional teams to address global challenges in critical technology sectors to advance democracy. The NNV team is a unique blend of national security executives and tech entrepreneurs with an extensive track record of building and investing in companies with outsized returns. NNV is focused on early stage (pre-seed through series A) teams building dual-use tech around AI for decision making, cyber and critical tech. 

https://www.newnorthvc.com/​​​​​

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