Balnord, Casimir Pulaski Foundation, and the Polish Development Fund (PFR) have launched the second edition of the Dual-Use Founder's Handbook. The comprehensive guide, titled "From Foundation to Scale," features contributions from 36 industry experts and launches as European dual-use and defence technology investments reach a record $3.881 billion in 2025.
The handbook is available for download HERE.
The handbook debuts at the Warsaw Security Forum, gathering 2,500+ participants from 90 countries to address Europe's most pressing security and technology challenges. The timing reflects the sector's rapid evolution from the first edition's focus on "opportunities and challenges" to this edition's emphasis on practical scaling strategies.
$14.76B investments create unprecedented founder opportunities
The numbers tell a compelling story: European investments in dual-use and defence technology have reached $14.76 billion since 2016, with over $9.35 billion flowing into the sector since the full-scale war in Ukraine began. The sector reached new heights in 2024 with $2.22 billion in funding, but 2025 has already set unprecedented records with $3.88 billion year-to-date, making it the highest annual investment total in the sector's history.
"The second edition of Dual-use Founder’s Handbook reflects how rapidly the dual-use landscape is evolving," said Marcin P. Kowalik, General Partner at Balnord. "With record investments flowing into the sector, founders need updated guidance to navigate both commercial and government markets effectively. This handbook provides the strategic framework and practical tools necessary to build successful dual-use companies in today's geopolitical environment."
The surge in financing reflects fundamental market dynamics. Dual-use companies command valuation premiums, with the handbook revealing that dual-use startups consistently raise significantly higher amounts compared to purely commercial counterparts across all funding stages. This premium is driven by extended development cycles and technology sovereignty imperatives.
M&A analysis reveals acquisition rush
The handbook delivers the first comprehensive analysis of European dual-use mergers and acquisitions (M&A) ever conducted, based on 293 dual-use exit transactions and 37 secondary transactions since Russia's annexation of Crimea. The data reveal a dramatic shift in the market after the outbreak of full-scale war in Ukraine in 2022.
Defence contractors tripled their acquisition market share from 6.5% to 21% during the 2019-2021 period, pivoting from outsourcing models to building capabilities in-house. Space operators nearly doubled their activity to 8.1%, signaling that orbital infrastructure has become a critical asset class. A new category emerged — startup-to-startup consolidation now accounts for 3.77% of deals, with companies like Quantum Systems pursuing aggressive acquisition strategies to build integrated platforms faster than traditional R&D cycles allow.
The data reveals crucial insights for founders: strategic buyers consistently value companies with genuine dual-use DNA. The top 10 buyers account for 34% of the total transaction volume, while intra-European deals represent 67% of the activity, demonstrating that European buyers actively seek European solutions.
The Baltic Sea region has emerged as Europe's fastest-growing dual-use innovation corridor, encompassing the Nordic countries, the Baltic states, Poland, and Germany. In 2025, the region accounted for 25.93% of all European dual-use M&A transactions, led by German and Nordic buyers consolidating critical technologies.
Practical guidance from industry veterans
The handbook addresses the complete scaling journey with contributions from industry practitioners who have successfully built dual-use companies. The European Investment Fund provides a detailed analysis of Safran's acquisition of Preligens, offering insights from a public Limited Partner's perspective on how AI-powered satellite analysis companies achieve strategic exits in the defence sector.
The guide maps Europe's dual-use funding infrastructure, identifying over 50 active investors, including dedicated VC funds backed by the European Investment Fund and PFR Ventures, corporate venture arms from aerospace leaders like Airbus and Thales, and accelerators ranging from NATO DIANA and Estonia's Darkstar to Poland's FORT Kraków and government platforms, including Ukraine's Brave1 and PFR's IDA Bootcamp.
The European Investment Fund's €175 million Defence Equity Facility is expected to mobilize approximately €500 million in private capital for dual-use startups. In contrast, national programs like PFR's Deep Tech initiative aim to target around €150 million in VC fund investments across the AI, robotics, cybersecurity, quantum computing, and space sectors. European sovereign funds are playing an increasingly strategic role in catalyzing private investment.
For instance, Estonia's SmartCap has launched a €100 million defence fund targeting NATO-aligned dual-use companies, while BGK plans to deploy PLN 1.1 billion in Polish strategic sectors, including dual-use technologies. This institutional capital acts as a catalyst, with every euro of public investment typically mobilizing five euros of private capital.
Strategic partnership and expert contributions
The collaboration between Balnord, PFR, and Casimir Pulaski Foundation combines venture capital expertise, institutional support, and policy insight.
"In today’s geopolitical environment, dual-use technologies are not just about defense, they are about Europe’s capacity to innovate and shape its own future. At PFR, we see founders as the key architects of this transformation. Our role is to make sure that Polish entrepreneurs have the tools, capital, and partnerships they need to scale globally while strengthening Europe’s technological sovereignty," said Eliza Kruczkowska, Director of Innovation Development at Polish Development Fund (PFR)."
The handbook features contributions from military leadership, including General Tomasz Piotrowski, former Operational Commander of the Polish Armed Forces, and General Karol Molenda, Commander of Poland's Cyber Command (DKWOC), alongside representatives from Estonia's Ministry of Defence. Institutional contributors include the Defence Policy & Innovation unit, Directorate-General for Defence Industry and Space (DG DEFIS), the European Investment Fund (EIF), PFR Ventures, BGK, NATO DIANA, and Poland's Ministry of Defence.
Industry perspectives come from leading companies, including ICEYE, APS, Palantir, and ATMOS Space Cargo, while the investment community is represented by major European VCs, including Project A, Lakestar, Expansion Ventures, and Balnord, and institutional investors. Innovation hubs and defence tech accelerators provide additional insights into ecosystem development.
Europe's path to technological sovereignty
The handbook addresses Europe's critical transition from defence dependency to technological sovereignty. Recent geopolitical shifts have accelerated the convergence of commercial and government technologies, creating unprecedented opportunities for entrepreneurs who can effectively navigate both markets.
The publication examines how European institutions have systematically developed comprehensive ecosystem infrastructure capable of identifying, funding, and scaling technologies crucial to both commercial success and strategic autonomy. This infrastructure spans from dedicated VC funds backed by the European Investment Fund and PFR Ventures to corporate venture arms and government-supported accelerators.
Future outlook: €800B reshapes the market
Looking toward 2030, the handbook maps how Europe's dual-use landscape will be transformed by the €800 billion ReArm initiative and national defence programs. For dual-use companies, this creates a unique moment. Governments and European primes are now urgent buyers, operating with more risk tolerance, stronger demand for technological superiority, and large pools of liquidity to fund it.
The publication identifies key technology domains that will define Europe's future competitiveness: space and satellite infrastructure, cybersecurity and data protection, energy resilience systems, autonomous platforms, physical logistics infrastructure, and biosecurity solutions. Success in these areas will determine whether Europe achieves technological sovereignty or remains dependent on external solutions.
"Building dual-use technologies means creating Europe's backbone — its technological autonomy, societal resilience, and ability to act independently. This is a civilizational project." summarizes Marcin P. Kowalik, General Partner at Balnord.
