“Tough Tech By The Tough Ten” is first-of-its-kind overview of defence, dual-use, cyber, and space innovations in the EU frontline states.

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Launched by a joint effort of VC funds Coinvest Capital, NATO Innovation Fund (NIF), Depo Ventures, BSV Ventures, Balnord, and New North Ventures in partnership with ILTE Lietuva and Dealroom.co, it maps mission-critical defence, dual-use, and space innovation and investment activity, funding availability, ecosystem stakeholders, startups to watch, and key policy developments in a standardized, non‑sensitive format, emphasizing cross-country cooperation, collaboration, and the sense of urgency.

The countries covered in this report include the "Tough Ten" countries: so-called Bucharest Nine (B9) - Poland, Romania, Bulgaria, Estonia, Lithuania, Latvia, Slovakia, the Czech Republic, and Hungary, - with the addition of Finland, which joined NATO in April 2023.

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The startups covered in this report operate in NATO’s 9 innovation priority technology areas, with the addition of cybersecurity of critical infrastructure:

 

• Artificial intelligence (AI)

• Autonomous systems

• Quantum technologies

• Biotechnology and human enhancement technologies

• Space

• Hypersonic systems

• Novel materials and manufacturing

• Energy and propulsion

• Next-generation communications networks

• Cybersecurity of critical infrastructure (excluded from summary charts)

The report examines how these “Tough Ten” nations are mobilising talent, capital, and technology in response to shifting security realities. It covers priority innovation domains identified by NATO, from artificial intelligence and quantum technologies to hypersonics, energy, and next-generation communications. Publicly available market data, enriched by insights of contributing partners with “booths-on-the-ground”, are provided in a standardized non-sensitive manner, creating the first reliable baseline for cross-border comparison. It invites further collaboration ahead of its planned annual editions, positioning the Eastern Flank as an investment-ready frontier of strategic technology.

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The report highlights the true dynamics of defence innovations in the region. Key findings include: 

• The Tough Ten nations are outpacing the rest of Europe in mission-critical innovation. 

  • Between 2019–2022, tough-tech ventures made up 7% of all startups in these countries, compared to 5% across the rest of Europe. 

  • By 2023–2025, this share more than doubled to 16%, while the rest of Europe lags at 10%. 

• By 2025, 53% of all Deep Tech and 23% of total VC investment will flow into Tough Tech - a dramatic shift from software convenience to hardware courage. 

 

Across the Tough Ten, defence tech investment remains concentrated in a few deep-tech verticals. Quantum computing, cryptography, and sensing ($606M) and Space and Satellite ($703M) dominate, accounting for most funding since 2019. Broader security segments, such as Energy Security ($253M) and Health Crisis Preparedness ($166M), highlight an expanded notion of defence, linking resilience and infrastructure. Core military areas - C4ISR ($22M), UAVs/UGVs ($28M), and Advanced Materials ($38M) - show steady but limited venture traction, reflecting Europe’s ongoing shift from early-stage R&D to scalable dual-use commercialisation.

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What began as a necessity to deter and defend is fast becoming the region’s competitive identity. This surge underscores a decisive strategic shift: proximity to geopolitical pressure has translated into faster mobilisation, deeper investment in dual-use capabilities, and a sharper focus on technologies with defence and resilience applications. The - Tough Ten are no longer catching up; they’re leading Europe’s tough-tech race.

 

The steady climb since 2020 signals ecosystem maturity, where early-stage experimentation is giving way to scalable, capital-intensive breakthroughs in defence, autonomy, and deep industrial tech - proof that the region no longer only invents, but begins to industrialise innovation.