European VC breaks out of taboos by investing in pure defense technology from war areas in Ukraine

Defense Tech has moved from a VCS area to the hot investment sector. However, double use – this means that technology must have civil applications – a requirement for most, including NATO Innovation Fund.

Estonian VC company Darkstar It is separated from this trend by investing sometimes in purely military applications, with the aim of helping From Ukraine. “This is very important, not only today, but over the next ten years.”

The company follows a practical approach with this task, which helps startups to bring products to military customers in Ukraine and all over Europe. As for the Ukrainian teams, this funding not only means, but also means supporting compatible entities in NATO countries such as Estonia. “In any company you want to be part of European purchases or even grants, the operational side should be perfect,” said Sas.

With a target to collect donations of 25 million euros (about $ 29.2 million) in the six months to 12, Darkstar intends to focus on pre -seeds and seeds, with a regular examination volume ranging from 500,000 euros. I have already achieved investments: in the Ukrainian and Esone startups Vision PersianWhich specializes in spatial geographical analyzes and drawing 3D maps for drones, and Deftsany It develops ammunition for drones.

For Saas, investment in weapons was not a clear step. A major figure in the ecosystem to start Estonian operation since then Skype founders funded his first startup companySociety for pet owners, continued to participate in the establishment of CRM and the sales tool TubesAnd use the revenues of that Unicorn exit To make More than 50 angel investments.

Some of these investments have become alone, including Virus. But none of them was a defense, even after Russia invaded Ukraine in 2022, Sas pushed to Delivery of trucks and assistance to UkraineWho has a personality and Commercial relations.

Sas said: “It took a long time to understand that I want to participate in arms systems,” Sas said. Ultimately, he chose it a year and a half ago when the Estonian drone starts KrattWorks He became his first defensive investment.

Krattworks was characterized by a turning point for Sas. He was also his last investment as an angel investor. SAS now puts his money in Darkstar, which started a Hackthons and BootCAMPS, benefiting expertise In the Hackathon community Garage48 Between 2010 and 2020. Since then, Sas has continued to finance and sell another company, X jumpAlthough it is not clear whether he earns money from this exit.

Sas is not the only one to support this approach. Darkstar just completed the first end of 15 million euros (about $ 17.5 million) with the support of European entrepreneurs, family offices and LP supported by the Estonian state SmartcapTechcrunch learned exclusively.

Support for a box like Darkstar makes Smartcap as an exception as well, along with the Lithuania VC box Coinvest capitalThat has become eaten Defense investments without the need for civil use issues In 2023, it is not by chance that all of these come from Baltics.

The proximity of Russia and the occupation of the former Soviet Union gives Estonians, such as Saas, a sense of urgency, which is now spread throughout Europe, where investors realize the importance of defense. Sas said: “But if you do not have real knowledge in this field, you are struggling,” Sas said. For Darkstar, building this know -how means speaking to the final users from the first day.

In the case of Darkstar, the final users are Ukraine brigades. While some changes It is implementedThe country has adopted an invisible approach, allowing combat units to make its own decisions. It may be difficult to move in strangers, but Sas got a start.

“In the three and a half years last year, I went to Ukraine 20 times, and I personally met 100 unit commanders more than 100-I spent time with them, spoke with them, and learned from them,” said the businessman, who also found a lot of common ground. “The elite units are more like startups than we imagine.”

Although aircraft aircraft use cheap aircraft from the first person’s show (FPV) The destruction of the equipment is worth millionsSAS says it will be a big mistake to believe that technical developments from Ukraine can be easily copied. There is an evolution – “Most of the drone brigades in Ukraine have its own research and development” – and there is a speed on both sides of the front lines. For example, drones were optical fiber Change the game.

For emerging companies outside Ukraine, this means that the solution that works on paper may become meaningless, and this is the place where dark camps aim to help. The next will be held this summer in Kyiv, and according to it WebsiteIt will give companies “reactions, field test opportunities and check the authenticity of the fighting.”

Some of the flow of Darkstar deal will come from training camps, where the gradual employees work with the teams for five days. But the pipeline is wider, and the qualified Ukraine team highlights 2000. “Many Ukrainian companies we are looking for are not six months old; it was about two years more than two years and they have already managed to build a product and a company with the lowest capital.”

The general mobilization of Ukrainian men is not a big obstacle as it is often assumed. SAS said that the founders build effective combat products can obtain exemptions and travel approval, and a large percentage of the founders of startups in Ukraine are women, including Farsight Vision CEO, VikToria Yaremchuk. As for the restriction of defense technology exports from Ukraine, this obstacle In the process of removing it.

Saas applies a site philosophy similar to the defense of investment. Just as he once argued that “the early northern companies must be Cut off Darkstar will not invest in companies that intend to stay on an exclusive basis in Ukraine. It also speaks to the teams based in Central and Eastern Europe, Latvia, the United Kingdom and Germany, among others.

In agreement with this goal, Darkstar describes itself as the general Europe in the background. Sas was joined by Estonia -based GPS Kaspar Gering, who spent a decade in engineering and data science roles, Martoma, Director Cooperative Cooperative Defense Center in NATO (On the left in the main image). There is the fourth GPIP Jungn, in Germany, with another partner and additional employees in Ukraine.

As for the groups, Darkstar plans to invest in independent systems, air defense, electromagnetic warfare, communications, cybersecurity, sensors, as well as monitoring and intelligence, with individual and second uses.

According to SASS, some of these goals can turn into the goals of acquiring the main contractors who are struggling to provide the rapid solutions that NATO countries are now ready to buy from them. But governments that deal with how to convert the war in Ukraine to modern war feed them, other startups can also reach hundreds of millions of revenues alone and even publicly.

It is unclear whether the defensive startups, especially those that do not have civil requests, can achieve intermittent success on their own. However, the rapid rise and the evaluation of companies like Sensor and Heling Along with a wave of new defense funds, it indicates that the probability of adventure returns is taken seriously.

Either way, what keeps Sas is something bigger. Although he embraces Navo’s humor, a The global movement on the Internet benefit from themes to support UkraineSas also provides a discreet warning about the Russian war economy. “The enemy moves very quickly, and this is exactly the reason why I think we need the technology community to participate in a more way to address this huge and increasing threat.”