Defence Finance Monitor Digest #94
Defence Finance Monitor is designed to help professionals interpret how NATO, EU and allied strategic priorities are reshaping capability development, industrial policy and technological pathways. Each edition clarifies the structural shifts—rather than the news cycle—that redefine institutional demand, procurement choices and the strategic relevance of companies across the defence and dual-use ecosystem.
DFM provides a coherent analytical layer that connects strategic intent, industrial capacity, technological evolution and capital allocation, allowing readers to understand how these dimensions interact and create long-term effects across the system.
The purpose is to offer a stable, decision-oriented framework for recognising which capabilities are emerging as priorities, which technologies are gaining structural importance, and which enterprises align with the enduring requirements of liberal democracies. Each briefing contributes to this framework, enabling decisions to be anchored in institutional signals rather than fragmented indicators.
Without an integrated perspective, signals from NATO, the EU and allied governments tend to remain disjointed, making it difficult to assess their implications for industrial positioning, investment decisions and long-term capability planning. DFM consolidates these strands into a single interpretive structure.
For a limited time, annual subscriptions to Defence Finance Monitor are available with a 30% discount. Upgrading now provides full access to the structured company database, the complete library of analytical reports and continuous coverage of the defence–finance interface.
The years ahead will be shaped by rapid institutional, industrial and financial decisions; having a clear, reliable view of how these movements align is becoming essential for anyone operating in this domain.
Special Report
Securing Europe’s Defence Microelectronics: Challenges, Dependencies, and Strategic Solutions
The ability of European defence systems to function, evolve, and maintain strategic relevance increasingly hinges on access to advanced microelectronics, semiconductors, and integrated electronic subsystems. These components underpin virtually all modern military capabilities—from radars, communication systems, and guided munitions to autonomous platforms and cyber-defence infrastructure. Yet, the European defence ecosystem faces a critical structural bottleneck: a dependency on non-European supply chains for the design, fabrication, packaging, and qualification of key electronic components. This vulnerability is compounded by the complexity of global semiconductor markets, the concentration of production capacity in geopolitical hotspots, and the limited ability of national or continental actors to secure priority access in crisis scenarios. While Europe possesses centres of excellence in research, niche manufacturing capacities, and leadership in select technology segments, it lacks the vertically integrated, scalable, and sovereign value chain required to sustain autonomous defence innovation and readiness. The bottleneck is not only technological or industrial—it is strategic. The capacity to develop and deploy next-generation capabilities such as software-defined radars, AI-enabled ISR platforms, or resilient C4ISR networks is now directly constrained by electronics access. This situation reflects long-term trends of offshoring, underinvestment, fragmented procurement, and regulatory inertia. It is further exacerbated by the accelerated convergence of commercial and military technology, where dual-use semiconductors—particularly at advanced nodes—are dominated by global players with diverging priorities.
Capital Markets & Investment Flows
Liquidity Events in Dual‑Use: Who Will Buy Defense Startups When IPOs Are Off the Table?
Venture capital in the defense and dual-use technology sector is rising rapidly, but one fundamental question still defines investment behavior: who will ultimately acquire these startups? Dual-use ventures operate at the intersection of civilian and military needs—developing technologies such as autonomous systems, cybersecurity platforms, advanced sensors and AI-based decision tools—yet the traditional path to liquidity through an Initial Public Offering (IPO) remains limited. Public markets remain volatile, ESG filters discourage exposure to defense, and government procurement cycles complicate revenue visibility. As a result, exits through IPOs are rare, leaving venture capitalists with a narrow and uncertain set of options. This report addresses that problem directly: it maps out the likely buyers of defense and dual-use startups over the next five years, offering a forward-looking view of the acquisition landscape. It differentiates between industrial acquirers—prime contractors, tier-two integrators, and adjacent strategic sectors—and financial buyers, such as private equity firms, family offices and SPACs, each with distinct motivations, timelines and deal structures. Examples from the past five years illustrate these dynamics, but the goal is to equip investors with actionable foresight: who will buy their portfolio companies if IPOs remain closed?
Public Expenditure & Procurement
EDIP: Europe’s New Defence Industry Programme
The European Defence Industry Programme (EDIP) marks a further stage in the progressive rearmament and industrial adaptation of the European Union after Russia’s full-scale invasion of Ukraine in 2022. It translates years of fragmented emergency measures and national initiatives into a more structured regulatory and financial framework focused on defence industrial readiness. Rather than addressing only ammunition shortages or isolated capability gaps, EDIP is conceived as a medium-term instrument to consolidate Europe’s defence technological and industrial base, support joint procurement and sustain a steady ramp-up of production capacity. Its approval by the European Parliament in November 2025, by a wide majority and after complex negotiations with the Council, signals a political willingness to move from ad hoc tools to a more integrated architecture that connects industrial policy, defence planning and support to Ukraine. At the same time, the modest size of the programme and the constraints of the EU budget keep alive the debate on whether the Union is moving fast and decisively enough to match the deteriorating security environment.
Asian Security & Defence Industry
Asia-Pacific Defense Procurement Update and Industrial Implications
The accelerating pace of defence procurement across the Asia-Pacific reflects a shifting strategic landscape defined by heightened regional tensions, long-term threat perceptions, and a growing commitment to military self-reliance. As governments in Taiwan, India, South Korea, and Australia react to complex geopolitical pressures — from Chinese assertiveness to alliance expectations — they are reshaping defence spending priorities and acquisition strategies in ways that will define the region’s security posture for years. Recent developments, including Taiwan’s unprecedented $40 billion defence package and Australia’s landmark naval agreement with Japan, illustrate how industrial partnerships, procurement timelines, and interoperability concerns are converging into ambitious, multi-year rearmament agendas. At the same time, the absence of new public deals from India and South Korea underscores that not all defence acceleration is linear or headline-driven; political timing, industrial capacity, and strategic signaling often shape when and how deals materialise. For European and NATO-aligned defence firms, this landscape presents both opportunity and constraint — a region where market access depends not just on cost and capability, but also on local partnerships, geopolitical fit, and willingness to engage long-term. Understanding this environment requires detailed, current, and source-based insight.
Read more
EIB’s €17.7 Billion Push to Strengthen Europe’s Strategic Industries
Defence ETFs: Volatility and Sector Rotation
Voyager’s Acquisition of Estes Energetics: Implications for U.S. Energetics, Propulsion and Industrial Sovereignty
The Rise of Defence-Thematic ETFs and Europe’s Strategic Investment Shift
UK Accelerates Deployment of DragonFire Laser Weapon System
Rheinmetall’s Strategic Stake in Auterion and the Race for Standardised Military Drone Software
Access to the full DFM system provides a structured environment for interpreting how technologies, industrial actors and financial movements contribute to defence readiness and allied autonomy.