Estonia Backs Europe’s First Defence-Only VC Fund with €10M

Estonia is doubling down on DefenceTech. SmartCap has invested €10M into Darkstar, Europe’s first venture capital fund focused solely on defence innovation.

Darkstar takes a hands-on approach: instead of fintech or SaaS, it looks for battle-tested technologies, proven on the frontlines in Ukraine. Startups are invited to five-day bootcamps with elite military units, ensuring products work in real combat conditions.

The €25M fund has already made its first deals, with pre-seed tickets up to €1M per company. Its first portfolio startup, Farsight, has moved its HQ to Estonia and started hiring locally.

Economy Minister Erkki Keldo calls this part of Estonia’s largest industrial growth plan ever — a €100M Defence Fund designed to strengthen security while boosting economic growth and exports.

With strong government backing and founder-friendly conditions, Estonia is fast becoming Europe’s leading defence innovation hub.