Earlybird and AVP launch €500m E2D defence-tech fund
Earlybird and AVP have launched E2D, a €500 million growth-stage fund targeting European defence and dual-use technology companies, in what the two firms describe as one of the most significant Franco-German investment collaborations in the continent's tech ecosystem. The fund's first close is set for 30 June, with limited partners drawn from large financial institutions and corporate investors.
The timing is deliberate. France has committed €76bn to defence spending, Germany €152bn, and the European Union has outlined an €800bn pan-European defence plan, collectively the largest structural shift in European security spending in a generation. Despite that political momentum, many of the continent's fastest-growing defence-tech companies have historically depended on US investors to scale, leaving capital, intellectual property, and engineering talent outside European borders. E2D is positioned, explicitly, to close that gap.
Capital at scale, conviction in depth
E2D will operate as a growth-stage vehicle, targeting around 20 companies at an average ticket of approximately €25 million. Its investment mandate spans all five operational domains, space, air, land, maritime, and subsurface, with an emphasis on businesses that serve both defence-native and commercial dual-use markets. A dedicated team drawn exclusively from Earlybird and AVP will run the fund, supported by a strategic committee that includes military leaders, NATO figures, and senior executives from several European prime contractors.
AVP brings a transatlantic growth-stage platform managing more than €2.5bn in assets, alongside direct access to US procurement networks. Earlybird contributes nearly three decades of pan-European deep-tech investing, €2.5bn under management, and a track record that includes nine IPOs and 41 trade sales. The two firms argue that the combination of cross-Atlantic reach and European market intimacy is precisely what defence-tech founders at growth stage currently lack.
"European defence is at a historic turning point, requiring a new generation of technology champions to safeguard sovereignty," said Benoit Fosseprez, General Partner at AVP. "The best European defence companies need investors who bring real sector conviction and pan-European reach; that's exactly what this partnership delivers."
The structural shift beneath the headline number
The E2D launch sits inside a broader structural reconfiguration of European venture capital that deserves attention beyond the fund's size. For much of the past decade, a significant proportion of European LP mandates, pension funds, endowments, family offices, explicitly excluded defence-sector investments on ESG grounds. That constraint has been unwinding rapidly since 2022, accelerated by Russia's full-scale invasion of Ukraine and the subsequent political consensus around European strategic autonomy. E2D's own press materials note that its partner team has been investing in dual-use and defence for over a decade, well before most European funds could, given those LP restrictions.
That structural shift has capital-allocation consequences across multiple sectors. As LP mandates loosen, European defence-tech is competing for growth-stage capital against deep-tech verticals, quantum, semiconductors, space infrastructure, that previously had fewer ethical barriers to institutional investment. For sovereign wealth allocators and cross-sector growth funds watching from outside the continent, the emergence of dedicated, at-scale European defence vehicles also signals a narrowing window for US and Gulf investors who have previously found little competition when backing European dual-use champions at growth stage.
The dual-use framing itself carries commercial logic that macro investors should not discount. Technologies developed for defence procurement, autonomous systems, secure communications, advanced sensing, increasingly have direct commercial applications in logistics, maritime monitoring, and industrial automation. A fund backing companies that straddle both revenue streams is, in effect, making a leveraged bet on the convergence of defence modernisation and the broader automation economy. Whether E2D's 20-company portfolio can deliver the "superior value for investors" that Roland Manger of Earlybird promises will depend on how quickly European procurement cycles can absorb new entrants, historically the continent's weakest link in translating defence-tech ambition into deployed capability.