In the evolving geopolitical landscape, military dominance is no longer shaped by conventional arms races. Instead, decisive advantage is being created at the intersection of civilian innovation and national defense — through the rise of dual-use technologies.
Ukraine: A Real-Time Laboratory of Dual-Use Adaptation
The war in Ukraine has accelerated a long-term industrial shift:
Over 90% of drones deployed are produced domestically, often by dual-use startups formed during the conflict (Forbes Ukraine, 2025).
Technologies such as low-cost FPV drones, commercial satellite systems, and civilian cybersecurity platforms have been adapted to disable high-value military targets (Euromaidan Press, 2025).
Disruption no longer comes from inside the defense establishment — it is being driven by private-sector innovation.
The Investment Landscape: Dual-Use Technologies Lead Growth
In 2024, European defense tech startups raised $5.2 billion, a 24% year-on-year increase, significantly outpacing the broader venture capital market (Financial Times, 2025).
Helsing raised €450 million to expand its AI-based defense capabilities (TechCrunch, 2024).
ICEYE continues scaling its radar satellite constellation, vital for surveillance and logistics in both civilian and military applications (TechCrunch, 2024).
Investors are increasingly recognising that dual-use means double value — strategic relevance and financial return.
Strategic Public Funding and Policy Alignment
Governmental support is reinforcing this transformation:
The European Union has pledged €700 billion to Ukraine’s reconstruction, prioritising resilient infrastructure, energy systems and dual-use innovation (European Commission, 2024).
The European Defense Industrial Strategy (EDIS) has increased defense R&D budgets to reinforce European strategic autonomy in key technologies (European Commission, 2025).
Dual-use development is becoming a cornerstone of Europe’s industrial and security policy.
Institutional Capital Is Evolving
Major financial institutions are adjusting to the realities of dual-use innovation:
The European Investment Bank and NATO Innovation Fund have removed legacy restrictions on funding dual-use sectors like AI, robotics, autonomy, and space (NATO Innovation Fund, 2025).
In April 2025, the European Commission introduced stricter export controls to protect sensitive dual-use technologies from authoritarian regimes (European Commission Trade Update, 2025).
The result: policy and capital are aligning to build secure, sovereign technology ecosystems.
What This Means for Investors
This is not a temporary wartime trend — it is a permanent industrial realignment that will define investment strategies for the next generation. At Mercaton Investment Group, we treat dual-use capability as a strategic advantage — not a regulatory constraint.
Why we invest in dual-use innovation:
Technologies that span civilian and military applications offer long-term, resilient returns.
Strategic capital must enable capabilities that strengthen both economic competitiveness and national security.
The future of private equity lies in supporting companies with dual-purpose potential and international scale.
Mercaton: Strategic Capital for a Resilient Future
At Mercaton Investment Group, we operate at the intersection of defense, innovation, and strategic investment. Through our Peacemaker Fund and Growth Equity Fund, we identify businesses capable of redefining resilience, scale and sovereignty. Dual-use is is the backbone of Europe’s industrial transformation.
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