No nation in Europe has achieved extra to make itself the house for defence startups than France. Over the previous two years, Paris has been rewriting the foundations of the sport, reforming all the things from immigration laws to enterprise capital funding, from procurement procedures to the best way the navy offers with corporations. The outcome has been placing: France, in my opinion, now affords what might be probably the most enticing ecosystem on the continent for founders who need to construct in defence and dual-use expertise.
It goes with out saying that such a sweeping transformation doesn’t occur by chance. It’s the results of deliberate and sustained state intervention. France grasped that in an age of large geopolitical upheaval, an age through which Russia is waging warfare on the continent and China is rising in navy and financial energy, Europe can’t afford to lag behind in innovation.
Small, agile corporations are sometimes the supply of probably the most disruptive types of expertise. It follows, given the context, that creating the situations that allow them thrive is not only about progress but in addition nationwide resilience.
A regulatory revolution
I’m not the primary particular person to note the progress that France has made regardless of fixed political issues, together with the current dissolution of the federal government. However what few outsiders totally admire is the extent of the federal government’s regulatory overhaul. Immigration guidelines have been streamlined, authorized buildings simplified, and financing channels widened. The flagship measure is the French Tech Visa, a fast-tracked, renewable four-year ‘Expertise Passport’ that lets founders, staff and traders transfer freely. It isn’t a token gesture. For a startup founder attempting to rent specialised engineers from outdoors the EU, months saved on visa processing can imply the distinction between success and failure.
Summer season reforms, efficient since 16 June 2025, have gone even additional. They’ve simplified immigration procedures, sped up EU Blue Card issuance, and set ‘cheap deadlines’ for utility processing. In brief, the bureaucratic wall that when discouraged expertise from settling in France is being dismantled piece by piece.
A single entrance door to the navy
Equally vital has been the creation of a transparent avenue for startups to work with the defence institution. Till just lately, smaller, youthful corporations usually discovered it subsequent to unimaginable to navigate the opaque and labyrinthine procurement buildings of nationwide militaries. That has modified in France with the launch of the Agence Innovation Défense (AID) by the Ministry of the Armed Forces. AID acts as a ‘one-stop store’: a transparent entry level the place startups can submit concepts, achieve suggestions, and, if profitable, win funding. That is unprecedented within the EU and one step in the direction of closing the hole in defence innovation between Europe and the US, the place it’s beneficiant and entrenched.
The numbers communicate for themselves. Within the first quarter of 2025 alone, AID accepted round 75 venture proposals and allotted about €20 million in grants. Corporations resembling Unseenlabs, a pioneer in maritime surveillance, and Exotrail, a pacesetter in in-orbit propulsion, have benefited immediately. The message to entrepreneurs is easy: if you wish to construct for defence, France will provide you with a good listening to. And in case you impress, you’re going to get funding.
Observe the cash
Capital markets have responded. Between 2022 and 2023, French startups raised round €13.5 billion. Between 2023 and 2025, that determine rose to greater than €15 billion. That progress makes France the second-largest enterprise capital market in Europe, behind solely the UK. In contrast to a few of its neighbours, France has recognised that enterprise funding should move to dual-use and defence-related expertise corporations if Europe is to maintain tempo with international opponents.
Germany specifically could be watching with curiosity. For years, Berlin, like others, handled defence expertise as a taboo for enterprise funding. However the warfare in Ukraine shattered illusions. Europe wants drones, satellites, cybersecurity instruments, resilient supplies, and extra apart from. Germany has responded: in 2024, it was the fourth-highest navy spender globally, with roughly $88.5 billion in expenditure – a significant improve from earlier years because of the €100 billion particular fund established after the Russia-Ukraine warfare. Learning the French mannequin might assist the German Defence Ministry guarantee the cash reaches the appropriate corporations immediately.
Certainly, I’d go a lot additional. Germany allocates virtually all of its cash to established gamers and larger startups. The overwhelming majority of small corporations wrestle to get any funding in any respect. Sure, France has massive corporations, and so they profit from the defence increase too. The distinction is that France understands that solely by taking a broad defence funding strategy can it succeed. Germany should see this.
Collaboration, not isolation
Some of the placing options of France’s strategy has been its willingness to work with exterior companions. Some European governments have fallen into the lure of seeing sovereignty as a synonym for autarky. France has averted that lure: it sees that whereas sovereign capabilities are very important, collaboration with trusted allies is equally important and unavoidable.
Joint procurement and manufacturing should not indicators of weak spot however of energy. By pooling assets with NATO allies and European companions, France has ensured that its startups can scale quicker, attain wider markets, and contribute extra successfully to collective safety. That is the trail Europe should comply with whether it is to discipline the quickest, simplest drive potential.
The choice is unappealing. If the most important nations, resembling France and Germany, succumb to nationalism and refuse to work in good religion with their companions, the outcome shall be fragmentation. Contracts and EU-level agreements that bind us collectively internationally are far safer than remoted nationwide tasks that may be undone on the poll field.
However there’s one other component. Huge points can come up when nationwide pursuits collide – take, for instance, the Future Fight Air System, the next-generation ‘system of methods’ beneath improvement by Dassault Aviation, Airbus and Indra Sistemas. Progress has stalled as a result of massive company pursuits are colliding. Energy struggles and workshare disputes are hindering progress. Startups can’t afford that. They have to cooperate or they die, and so supporting them will allow fast innovation throughout Europe.
A lesson for Europe
France’s ascent as a defence-startup hub carries classes for the entire continent. It exhibits that regulatory reform, clear navy engagement, and openness to capital and expertise, all formed by a prevailing angle of realism and pragmatism, can remodel a rustic’s prospects in just some years. That is excellent news. It exhibits that with political will, Europe can create ecosystems to rival these of the USA and Asia.
What France has constructed just isn’t excellent, however it’s a sturdy mannequin for rearmament and innovation at this level in historical past. It’s a reminder that with the appropriate mix of reform, funding, and collaboration, Europe can flip ambition into actuality. Will others comply with?
They need to. The answer just isn’t for startups to maneuver to France, however for all of Europe to be taught from the French instance and undertake comparable insurance policies to safe peace on the continent. If France’s buddies and neighbours rise to the problem, the area will consolidate its technological benefits, strengthen its resilience, and safeguard the liberty of its individuals. If it doesn’t, it dangers falling behind these powers extra prepared to mobilise the state to supercharge entrepreneurial vitality.
