Estonia and its central and eastern European neighbors are ramping up investments in defense technology due to heightened security concerns after Russia’s invasion of Ukraine in 2022.

The push is particularly evident in Estonia, which shares a border with Russia and is leveraging its vibrant tech industry to support emerging defense startups.

According to Dealroom.co, European defense tech investments rose from 0.4% to 1.7% of total venture capital funding from 2022 to 2024, totaling nearly US$1 billion.

While much of the funding is directed toward western Europe, central and eastern Europe have experienced a threefold increase in defense funding rounds since the war in Ukraine began.

Estonia’s geographic position allows rapid collaboration with front-line units, enabling the prioritization of military technologies in privately funded ventures.