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A top European venture capitalist is warning the European defense sector to reduce its reliance on U.S. defense and space companies such as SpaceX, according to the Financial Times.
It’s creating a “huge risk,” Bernard Liautaud, managing director of London-based Balderton Capital said Oct. 6 at Italian Tech Week in Turin. “We need to be more self-sufficient.”
Instead, Liautaud said, Europe needs to accelerate the development of its own space and defense technologies.
His comments come despite a surge in European defense spending, including in startups, that preceded Russia’s 2022 invasion of Ukraine, and that has since accelerated.
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Liautaud added that startups will play an important role if Europe’s defense sector is to catch up to that of the United States, according to the FT.
Balderton was formed 25 years ago as a spinoff of Benchmark Capital, and has since backed more than 250 startups and made a name for itself as a premier investor in European technology.
It has also invested in several defense and space startups. In May the VC was part of a 160 million euro ($140.7 million) round into Quantum Systems, a 10-year-old German company that produces aerial intelligence technology such as image collection software used in drones, robots, and other equipment. In July, Balderton co-led a 70 million euro ($60.2 million) funding round into Exein, an Italian cybersecurity startup whose technology is used in the defense sector.
And last year, Balderton co-led a $160 million round for The Exploration Company, a French-German startup that is developing a capsule that can transport cargo to the International Space Station, a rocket, and a lunar lander.
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European defense tech startups have raised more than $2 billion in capital since 2018, according to a February 2025 report from McKinsey & Company. Nevertheless, European defense tech startups still made up for only 1.8% of Europe’s VC funding in 2024.
At the same time, U.S. deal volume for defense tech startups is about 2.4 times more than in Europe, McKinsey said. The report also noted that the “emerging European defense tech startup ecosystem is about five years behind the United States’ in terms of maturity.”
The discrepancy hasn’t been lost on European military leaders. “If we don’t spend more together now to prevent war, we will pay a much, much, much higher price later to fight it,” NATO Secretary General Mark Rutte told NATO members last December in Brussels.
Europe’s need for more defense and space startups will present a major opportunity for both the sector and the investors who invest in it, McKinsey said.
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According to the report, Europe has been focused on rearming and expanding its existing weapons capabilities, as well as developing new weapons based on lessons learned on the battlefield.
Startups will play an especially important role in developing these new defense technologies, the report said.
Indeed, there are already many existing firms that are already working on drones, battlefield software, and other advanced defense tools.
Balderton’s Liautaud, however, would like to see more work done in technologies meant for defense capabilities in space. A growing part of “military supremacy” is going to be fought in space, he said, according to the FT.
However, with SpaceX, valued at around $400 billion, already dominating the space defense arena, catching up will be difficult.
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This article Europe’s Top VC Warns Reliance on SpaceX Is a ‘Huge Risk’ – Says Europe Must Build Its Own Space and Defense Tech Fast originally appeared on Benzinga.com