- Klaus Hommels, the European venture capitalist known for backing Spotify, Revolut, and Klarna, has shifted his focus to defence. BAE Systems has invested €25 million in its firm to support this move.
- BAE Systems is investing €50 million in Lakestar and Expeditions through its Launchpad programme. Instead of developing everything internally, the company is supporting early-stage European defence-tech startups.
- In 2025, European defence and security startups raised a record $8.7 billion, a 55% increase from the previous year. Now, major defence companies are starting to follow venture capitalists into the sector.
Throughout his career, Klaus Hommels became known for backing successful consumer tech companies like Skype, Spotify, Airbnb, Klarna, and Revolut. Last year, he stepped down as chair of the NATO Innovation Fund and said he would stop raising generalist VC funds. Now, his focus is on defence, aerospace, and resilience.
Today, BAE Systems validated that pivot with €25 million.
BAE Systems, the UK’s largest defence contractor with more than 110,000 employees in 40 countries, has announced a €50 million investment. The money will be split equally between two European defence-tech funds: Hommels’ Lakestar and Expeditions, which is based in Warsaw and co-founded by Mikolaj Firlej.
The investments form the second phase of BAE’s Launchpad programme and are subject to final agreement expected before the end of June.
Hommels’ shift in late 2025 is now becoming clearer. After more than a decade of investing in consumer tech unicorns, he believes there is more potential in focusing on these companies than in investing in another round of SaaS or fintech startups.
“Europe is at a pivotal moment in redefining its security and technological sovereignty and supporting the next generation of defence tech founders will be critical to that effort. BAE Systems’ investment is significant as it brings together capital, deep sector expertise and access to markets to accelerate the development and deployment of the capabilities Europe needs to remain secure in an increasingly complex world,” Hommels says.
Expeditions offers a different set of strengths
The fund has invested in European defence-tech with a strong sense of urgency, even before it became popular. Its close ties to the frontline help founders move quickly from idea to deployment.
“Our security can no longer be assumed; it has to be built. Its architects will be the founders deploying innovative products at scale, in weeks and months rather than years, drawing on lessons from the frontline,” Firlej notes.
The current market matches this timing
In 2025, European defence, security, and resilience startups raised a record $8.7 billion, 55% more than the previous year and almost four times as much as five years ago, according to the NATO Innovation Fund and Dealroom.
According to FCF Corporate Finance, the European defence tech VC market grew at a compound annual rate of 69% from 2021 to 2025. US competitor Lockheed Martin recently increased its own corporate venture fund to $1 billion. In this context, €50 million across two funds may seem small, but for BAE, the main value lies in gaining access rather than in high returns.
Launchpad aims to bridge the gap between prototype and deployment, which often prevents defence-tech startups from growing. BAE describes the programme as a two-way approach: it spins out its own technologies into commercial markets and also connects external founders with its customers in energy, advanced manufacturing, and defence.
“Building on our long-standing investment in innovation, we recently set up Launchpad as a win-win, aiming to spin out some of our own defence technologies to commercial markets while also backing start-ups who can bring something new to defence. This latest step means we’re full steam ahead on making that a reality,” Dave Ewing, head of technology commercialisation at BAE Systems, concludes.
The main question this deal raises is not whether European defence tech needs more funding, as it clearly does. Instead, the question is whether founders who can move quickly, as the UK’s Defence Industrial Strategy requires, will find that taking money from a major contractor slows them down due to additional conditions.
