The Paris-Milan VC’s new initiative indicates European investors integrating defense into their deeptech strategies.
A few years ago, a deeptech fund backed by a major defense prime raising substantial amounts for dual-use technologies would have been surprising. Now, the French-Italian early-stage VC, based in Paris and Milan, managing over €500 million in assets, has secured €85 million for a deeptech vehicle with support from a European defense prime.
The fund signifies a shift towards long-term technologies aligned with Europe’s reindustrialization goals and highlights that deeptech returns may stem from dual-use technologies over the next decade.
## Why Defense Investment is Entering Deeptech VC
360 Capital’s announcement comes as the market has evolved since Ukraine’s invasion in 2022. Historically, European defense primes engaged less with venture ecosystems, focusing on internal R&D and supply chains rather than early-stage funds investing in autonomous systems or AI logistics.
However, the need to rapidly modernize military capabilities and the realization that emerging technologies are developing outside traditional defense channels have led European primes to venture funds for technology access and strategic insight. The European Investment Fund has committed €50 million to Join Capital’s Fund III, focusing on deeptech and dual-use startups, indicating increased institutional support for this model.
For 360 Capital, a prime LP offers more than capital; it provides procurement opportunities for portfolio companies, which is a challenge for European defense startups. The continent’s procurement processes are typically slow and fragmented, but an anchor LP with vested interest in commercial success can influence this.
## 360 Capital’s Track Record and Emphasis
Founded in 2001, 360 Capital has navigated various European technology investment cycles, from internet-era startups to its current deeptech and climate technology focus. Its portfolio includes early-stage companies in AI, robotics, energy technology, and advanced materials, sectors likely to broaden into defense-adjacent applications through the new fund.
The €85 million follows a 2024 €30 million tranche announcement for 360 Digitaly, a digital transition fund. The defense-adjacent deeptech vehicle represents a distinct strategy reflecting the firm’s recognition of the current geopolitical context and the capital available from defense primes seeking technology exposure.