Central and Eastern Europe has long been viewed by international investors through the lens of geopolitical instability. Russia’s annexation of Crimea in 2014 and the full-scale invasion of Ukraine in 2022 reshaped not only the region’s security landscape but also the way global capital approaches risk in CEE.
Yet despite the war and broader political uncertainty, the region has remained firmly on the venture capital radar. For many investors, the rise of defence and dual-use technologies is turning CEE into one of the most compelling venture opportunities of the next decade, forcing a reassessment of the relationship between geopolitical risk and innovation.
At the CEE VC Summit 2026, partners from 1991 Ventures, OTB Ventures, Balnord, Roosh Ventures, and Vesna Capital discussed how investors are approaching deals next to war zones, not only in Ukraine but across Europe more broadly.
The need to strengthen Europe's sovereignty
One of the clearest themes emerging from the discussion was that some investors increasingly see geopolitical instability not only as a source of risk, but also as a structural opportunity.
Marcin P. Kowalik, GP at Balnord, pointed to a long-standing imbalance in the European market: while CEE produces around 33% of Europe’s engineering and tech talent, the region receives only a fraction of the continent’s venture capital. For Adam Niewiński of OTB Ventures, this shift is also tied to a broader geopolitical decoupling between the US and Europe.
As the US becomes more protective of domestic technologies and strategic government contracts, Europe, he argued, will need to strengthen its own technological sovereignty. That, in turn, is changing what many regional VCs are looking to back — moving beyond SaaS toward sectors such as defence, cybersecurity, and space infrastructure.
War breeds innovation
War has a way of accelerating technological development that, under normal circumstances, would take years of R&D, testing, and market adoption. Petro Sovyak-Krukovskyy of Vesna Capital described this process as a “rebalancing” — when existing systems break down, whether supply chains, energy infrastructure, or communication networks, societies are forced to build new and often more efficient alternatives.
Energy is one of the clearest examples. Because large centralized power plants are highly vulnerable during wartime, Ukraine has been pushed toward a more distributed energy model, based on municipal-level generation and personal battery storage in homes and apartments. According to the investors, neighboring countries are increasingly recognizing that decentralized grids can be not only more resilient, but also more efficient than traditional 20th-century infrastructure.
The same dynamic is reshaping the space sector. OTB Ventures’ early investments in companies such as ICEYE, which provides satellite imaging capable of operating through clouds and darkness, were once viewed as niche technologies. Today, they are becoming part of Europe’s security infrastructure.
Marcin P. Kowalik argued that while Europe may have lost the “rocket race” to launch providers like SpaceX, the region is developing a strong position in satellite data and analytics. In particular, he noted, CEE talent is well-suited to solving complex real-world problems through data analysis and advanced engineering.
Underwriting the risk
While the long-term opportunity in the region may be clear, investing during geopolitical instability requires a different approach to risk assessment. Across the panel, investors argued that the focus is increasingly shifting away from “jurisdiction risk” and toward founder resilience.
Kyle Ukho, GP at Roosh Ventures, described a framework built around operating under pressure. For founders coming from high-risk regions, the bar is often higher: investors look for teams that have already demonstrated an ability to adapt quickly, rebuild operations, or relocate without disrupting growth.
Revenue diversification is another key factor. A startup may be founded in Kyiv or Warsaw, but its customer base needs to be international. According to the panelists, global revenue exposure acts as a natural hedge against local political and economic instability.
Building European champions
As European countries become more protective of domestic technologies and procurement, investors increasingly prefer to back companies tied to their own markets. Marcin P. Kowalik argued that one solution is building a “resilient cap table.” By creating syndicates with investors from multiple countries — for example, Poland, Denmark, and France — startups can position themselves as “European champions” rather than purely local players, making expansion across markets easier.
Denis Gursky, Partner at 1991 Ventures, pointed to another emerging opportunity: the “middle layer” of defence technology. While public attention is focused on drones and weapons systems, a growing market is forming around the components, infrastructure, and software powering them. According to Gursky, these companies often face fewer export restrictions than final-stage defence products, making them easier to scale and potentially more attractive for traditional VC exits.
Dual-use goes mainstream
The panel repeatedly returned to the idea that dual-use technologies should no longer be treated as a niche category, but as one of the most promising areas for venture capital. For firms like OTB Ventures, that shift initially came through space infrastructure rather than traditional defence systems.
Niewiński pointed to early investments in ICEYE and SpaceKnow as examples of commercial technologies that gradually became strategically important. “We don't think of dual-use as a market, but rather a framework for how you develop your company,” he said.
Incentivising European talent
The panel closed on a theme that surfaced repeatedly throughout the discussion: Europe already has the technical talent needed to build globally significant companies. The bigger question is whether capital, procurement systems, and industrial policy can evolve quickly enough to support them.
“The largest natural resource of Europe is not gas, oil, or coal — it is tech talent,” said Niewiński. “If Europe stops talking about agricultural subsidies and starts focusing on stimulating innovation, we can become a global leader.”
