American VC Bets on European Defense Tech, Bucking the Trend
In a landscape where venture capitalists often move as a collective, Eric Slesinger is charting a different course. The former CIA officer is focusing on European defense tech startups, a sector largely overlooked by American investors who tend to chase AI or U.S.-based defense ventures. Slesinger’s firm, 201 Ventures, recently closed a $22 million fund specifically for seed-stage European defense tech companies.
Slesinger’s transition from developing technology for CIA agents to becoming a VC investing solely in European defense tech is driven by a belief that the private sector is playing an increasingly significant role in global competition. He shared in a StrictlyVC Download podcast interview that he left the CIA after realizing the growing importance of the private sector in areas traditionally dominated by governments.
With degrees from Stanford in mechanical engineering and Harvard Business School, Slesinger possesses the background needed to bridge the gap between defense technology and commercial applications. His willingness to defy conventional wisdom has drawn attention from investors, founders, and the media, including The New York Times.
Slesinger noted three key factors that U.S. VCs are missing: the presence of highly capable entrepreneurs in Europe, the delayed response of European governments to evolving security needs, and Europe’s increasing role as a site of “gray zone competition,” involving activities between peace and war.
One of the most surprising aspects of Slesinger’s venture has been the cultural resistance he encountered regarding defense investments in Europe. In 2022, he founded the European Defense Investor Network to connect entrepreneurs, investors, and policymakers. In a Medium post, he described how his European VC peers were hesitant to publicly discuss their defense-related investments, a stark contrast to the U.S.
The landscape is now evolving, partly due to the NATO Innovation Fund, backed by 24 NATO allies, which is a significant investor in 201 Ventures. Furthermore, the rise of defense tech startups like Munich-based Helsing, valued at over $5 billion, and Delian Alliance Industries, an Athens-based surveillance technology company, is attracting more attention and investment.
201 Ventures, with eight investments to date, focuses on technologies addressing gray zone competition in Europe. Slesinger sees these market dislocations as opportunities for generating alpha. His portfolio includes Polar Mist, a Swedish startup producing maritime drones.
Slesinger acknowledges the challenges of longer development timelines in defense tech, which can clash with the typical 10-year venture fund cycle. He also believes European companies should engage in lobbying efforts earlier in their development.
Despite potential challenges, Slesinger’s vision of a more independent European defense ecosystem is gaining traction as geopolitical tensions rise and Europe reevaluates its security strategies. Data from the NATO Innovation Fund and Dealroom indicates that European defense tech startups raised 24% more capital in 2024 than in 2023, surpassing even AI funding, reaching $5.2 billion according to the Financial Times. This trend is likely to continue, especially with potential shifts in U.S. foreign policy.
