US VC Eric Slesinger Bets on European Defense Tech Amid Shifting Geopolitics

Eric Slesinger, a former CIA officer and founder of 201 Ventures, is carving a unique niche in the venture capital landscape by focusing exclusively on European defense technology startups. While many American investors chase AI or U.S.-based defense tech, Slesinger, with his background in developing gadgets and software for intelligence agencies, is hunting for deals across the Atlantic. He recently closed a $22 million fund dedicated to seed-stage European defense tech ventures, a move that appears prescient given the evolving global security environment.

From CIA to Contrarian VC

Slesinger's journey from the CIA to venture capital is driven by a keen observation of market shifts. He noticed the increasing role of the private sector in defense, a domain previously considered solely governmental. This realization, coupled with his degrees in mechanical engineering from Stanford and an MBA from Harvard Business School, equipped him to bridge the gap between defense technology and commercial ventures. His willingness to defy conventional wisdom—going where others don't—is a hallmark of his approach, inspired by his time at the CIA where the motto was to 'go where others don't go and do what they can't do.'

The European Defense Tech Opportunity

Slesinger identifies several key reasons why U.S. VCs might be overlooking Europe for defense tech investments:

European Entrepreneurial Talent: He emphasizes that Europe possesses entrepreneurs who are just as driven, high-conviction, and intelligent as anywhere else in the world.
Governmental Reassessment: European governments were perceived as slow to re-evaluate their security arrangements, creating a gap that private sector innovation could fill.
Gray Zone Competition: Europe is increasingly becoming a focal point for 'gray zone competition'—activities by state or non-state actors that fall between peace and outright war. This necessitates advanced technological solutions.

Overcoming Cultural Hesitation

One of the significant challenges Slesinger encountered was the cultural resistance to defense investments in Europe. Upon moving to Madrid in 2022, he founded the European Defense Investor Network. He noted that many European VC colleagues were hesitant to discuss their defense-related investments, viewing it as 'uncouth' or something not to be spoken about in polite company. This cultural perception, he believes, discouraged founders from building companies in the defense space.

However, this landscape is changing. The NATO Innovation Fund, launched in the summer of 2022 after the Russia-Ukraine war, has become a significant backer of 201 Ventures, signaling a broader shift in European defense investment.

Promising Startups and Market Growth

Slesinger's portfolio includes companies like Munich-based Helsing, which develops AI for battlefields and is valued at over $5 billion, and Athens-based Delian Alliance Industries, creating surveillance towers. Other focus areas include hypersonics and subsurface mapping. These investments address the 'gray zone competition' that Slesinger believes will define security for decades.

The market data supports this trend. European startups in defense and related technologies raised 24% more capital in 2024 than in 2023, reaching $5.2 billion, surpassing even AI funding. This growth is further fueled by geopolitical uncertainties, such as potential shifts in U.S. commitment to European defense.

Challenges and Future Outlook

Slesinger acknowledges the longer development timelines inherent in defense tech, which require careful management within typical venture fund lifecycles. He also advocates for increased lobbying efforts by European companies at earlier stages. Despite these challenges, his vision for a more autonomous European defense ecosystem is gaining broader acceptance. As geopolitical tensions rise, the demand for innovative defense solutions is expected to continue its upward trajectory, validating Slesinger's contrarian bet on European defense tech.