Why American investors love European defense startups

As European defense spending takes off, just about half of the funding in Europe's defense tech industry is coming from American investors this year. One reason why: European investment firms have restrictions on how they can invest.

<img src='undefined' alt='A Ukrainian air defense soldier gets ready to repel Russia's drone attack in Kyiv, Ukraine, Saturday evening, Sept. 19, 2026.'/><p>As European defense spending takes off, just about half of the funding in Europe's defense tech industry is coming from American investors this year. One reason why: European investment firms have restrictions on how they can invest.</p><p>(Image credit: Efrem Lukatsky/AP Photo/Efrem Lukatsky)</p><img src='https://media.npr.org/include/images/tracking/npr-rss-pixel.png?story=nx-s1-5995606' />