AVP and Earlybird launch E2D, a €500M European dual-use and defence growth fund
What's the deal? Berlin-based Earlybird and Paris-based AVPDealroom has a profile for this one. Try Dealroom → have launched E2D, a €500M growth-stage fund targeting European defence and dual-use technology companies. The Franco-German vehicle plans to invest in roughly 20 companies at an average ticket of about €25M, spanning space, air, land, maritime, and subsurface domains. Its first close is set for June 30. Limited partners include large financial institutions and corporates.
Why now? Europe is in the middle of its biggest defence spending surge in a generation. France has committed €76B, Germany €152B, and the EU has outlined an €800B European defence plan. Yet the continent's fast-growing defence startups have historically had to turn to US investors to raise growth capital — shipping capital, talent, and intellectual property across the Atlantic in the process.
E2D is explicitly designed to plug that gap. The fund's partner team includes investors who have backed dual-use and defence tech for over a decade, well before most European funds could, given LP restrictions on the sector that have only recently begun to lift.
What could go wrong? Defence procurement cycles are notoriously slow and bureaucratic, which can test the patience of venture-style return timelines. The fund also enters an increasingly crowded space — a wave of European defence-focused vehicles have launched since 2024, meaning competition for the best deals will intensify. And while political momentum for defence spending is strong today, budget priorities can shift quickly.
The signal: E2D reflects two converging trends. First, European investors are finally treating defence tech as a legitimate — even desirable — venture category after years of avoidance. Second, there's growing alarm that Europe's best startups default to US capital at the growth stage, undermining the sovereignty goals that defence spending is meant to achieve.
"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."
The partnership pairs AVP's transatlantic platform and growth-stage expertise with Earlybird's deep-tech track record. A dedicated team drawn from both firms will work exclusively on the fund. If the thesis plays out, E2D could become a template for how Europe finances its own strategic autonomy — with venture capital, not just government cheques.
Read more: Tech.eu · AVP · Tech Funding News
