Dual-use technologies – those that serve both civilian and military applications – were considered a niche domain. Often viewed through a regulatory lens, they occupied a grey area between commercial opportunity and political sensitivity.
Today, that grey zone is vanishing. In 2025, dual-use technologies are not only mainstream – they are structural enablers of security, innovation, and long-term value creation.
Civilian Innovation Is Shaping Modern Conflict
The war in Ukraine, escalating tensions around Taiwan, and the global fragmentation of supply chains have redefined the nature of security. What was once reserved for defense ministries is now built in startup labs, university spinouts, and cloud-native platforms.
Commercial satellites now deliver real-time battlefield intelligence and infrastructure monitoring (TechCrunch, 2024).
Consumer-grade drones, retrofitted with simple software, have disrupted centuries-old assumptions about air dominance and ground mobility (Forbes Ukraine, 2025).
Enterprise AI and cybersecurity tools originally designed to protect digital assets now safeguard critical infrastructure, logistics corridors, and operational data (Financial Times, 2025).
This is not an improvisation born of crisis. It’s a strategic reallocation of innovation capacity — from abstract digital transformation to applied geopolitical resilience.
Ukraine: Dual-Use Innovation at Scale
No country exemplifies this transformation more clearly than Ukraine.
According to Forbes Ukraine (March 2025), over 90% of drones used by the Ukrainian Armed Forces are now produced domestically — a shift from near-total import dependency in 2021.
These platforms — developed by companies such as Brave1, Vyriy, and Delfast — are not just battlefield assets. They represent a new industrial layer of the Ukrainian economy: adaptive, scalable, and built on dual-purpose logic.
Their technologies are now finding applications far beyond defense:
Autonomous mapping for infrastructure and agriculture
Energy monitoring and disaster response
Logistics and last-mile transport in low-connectivity regions
In other words, dual-use innovation is becoming an export category — not just a wartime necessity.
Europe’s Institutional Shift: From Caution to Capital
Until recently, Europe remained cautious in financing dual-use ventures. Regulatory fragmentation, ethical concerns, and risk-averse capital slowed development across the EU.
But 2025 marks a pivot. Institutions are no longer asking if they should support dual-use; they are asking how fast they can catch up.
In April 2025, the European Commission issued a directive urging Member States to coordinate export control policies for dual-use tech, particularly in AI, semiconductor design, and autonomous systems (EU Trade Bulletin, 18 April 2025).
The European Investment Bank (EIB) officially lifted its prior exclusion on funding security-related technologies, aligning with strategic autonomy objectives.
The NATO Innovation Fund continues its €1 billion deployment plan, focusing on high-potential dual-use ventures in AI, space, and resilience infrastructure (NATO Innovation Fund Annual Report, 2024–2025).
These shifts are already attracting capital. Notable funding rounds include:
ICEYE (Finland) – $136M to expand dual-use satellite platforms (TechCrunch, 2024)
Helsing (Germany) – $209M to scale AI-powered surveillance and situational awareness software (Financial Times, 2025)
Europe is no longer just protecting itself — it is positioning itself as a global hub for technologies that protect societies and power economies.
A Clear Investment Thesis
At Mercaton Investment Group, we view dual-use innovation not as a fringe sector — but as a strategic category.
One that intersects with three core pillars of capital deployment:
Resilience – Systems that operate reliably amid volatility are not a luxury — they are a necessity.
Return – Demand for cyber-secure, autonomous, and adaptive solutions will not diminish. It will accelerate.
Regional Leadership – Technological sovereignty starts by owning the platforms that matter most.
Dual-use readiness is no longer a regulatory obstacle.
It is a competitive advantage — one that creates durable equity value while strengthening the strategic posture of an entire region.
Where We Invest
Through our Growth Equity Fund and Peacemaker Fund, we invest in companies that:
Operate in sectors where civil-military crossover is structural: AI, autonomy, robotics, geospatial intelligence, and digital infrastructure
Are rooted in Central and Eastern Europe, with the ambition to scale globally
Have the potential to become anchors of regional stability and economic growth
Require more than capital — they need a partner in governance, growth, and exit strategy
We support transitions, buy-ins, and platform builds that transform engineering capacity into global leadership. Not despite the complexity — but because of it.
The Strategic Imperative
Dual-use innovation sits at the intersection of industrial renewal, defense resilience, and long-term competitiveness.
It is not simply about technology. It is about how Europe defines its autonomy — not through declarations, but through ownership of what matters.
In 2025, the convergence of capital, policy, and innovation in dual-use sectors is no longer optional.
It is a generational opportunity.