Investments in Nordic defence and dual-use technology are rapidly increasing. Since 2019, over 1.7 billion dollars have been invested in the region's startups, but in larger funding rounds, Nordic companies are losing ground to European, American, and Asian players. This is shown in a new report from Danske Bank.

– Up to 15 million dollars, about half of the investors are Nordic. But above that level, the proportion drops significantly, says Stefan Granlund, one of the report's authors and Head of Growth at Danske Bank Sweden, to Nordic Defence Sector.

The report Nordic Defence Tech Report 2025, produced by Danske Bank Growth together with Dealroom, maps over 150 companies in the Nordics within the category of defence and dual-use tech. It covers everything from space technology and quantum communication to autonomous systems and cybersecurity.

Few funds with a defence profile

According to Granlund, the uneven investment picture is not a result of a lack of capital, but rather an effect of investment policies and structural limitations.

– There are few pure defence funds in the Nordics. It then falls to pension funds and other institutional investors to step in – and in Sweden, they often have more restrictive mandates compared to, for example, Finland or Denmark.

The report shows that Finland leads the Nordics in defence and dual-use investments per capita, partly due to scaleups like ICEYE and Kelluu.

Next wave: autonomous systems

According to the report, the investment volume in the Nordics has more than doubled since last year, with a continued strong focus on space and quantum technology. At the same time, a new area is emerging as the next technological leap: autonomous systems.

– It is a natural development following advancements in areas such as sensors, AI, and C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance). We see a growing interest in autonomy in land, sea, and airspace applications, says Granlund.

Increased need for clarity from authorities

For more investors to dare to enter the sector, increased transparency regarding future capacity needs and technological gaps is required, according to Granlund.

– Investors need to understand where their money will be most beneficial – and thus have the greatest chance of return.

He also points out differences in perspectives between countries. In both Denmark and Finland, defence investments are less controversial than in Sweden.

– There is a more pragmatic approach. In Finland, the proximity of war is still vivid in memory and affects the view of the defence sector, and in Denmark, being a NATO member since the start also contributes to a different attitude, he says.

More companies entering the sector

The question of whether the latest wave of defence-related startups would also be the last is dismissed by Stefan Granlund directly.

– No. Compare it to the tech scene earlier – those who were early in companies like Klarna or Spotify have since started their own successful companies. We will see the same thing here, he says.

As defence and dual-use companies grow, spin-offs are expected where experienced employees see new gaps in the market and move on to start their own businesses. Even individuals from authorities or the Swedish Armed Forces (Försvarsmakten) may take the step.

– This is just the beginning. We will see more companies founded by people who are already in the sector and understand the needs in depth.

At the same time, Granlund sees a continued stream of new entrepreneurs from other parts of the business world, not least from the tech and industrial sectors.

– It is a clear trend. Nordic Air Defence is a good example: a new company with roots outside the traditional defence industry, but which has already received much attention.