For decades, defense technology and commercial technology ran on parallel tracks. The idea of mixing the two was often unthinkable, especially in the world of startups and venture capital. Today, that wall is crumbling, and the discussion increasingly centers on dual-use.
Back in June, during Prague Defense Tech Week, we spoke with Veronika Kaiser and Oleksandr Bulatnikov of Presto Tech Horizons, just before the launch of the city’s first-ever defense tech hackathon. The conversation turned to how much had changed in just a single year: new dual-use and defense-focused funds had been launched in response to rising geopolitical instability and the war in Ukraine.
The same questions kept surfacing: Is it really viable for investors to back so-called single-use deep tech startups? Does “single-use” even exist anymore? What will the path look like once the war ends?
“We’re a tech investor focused on security,” says Bulatnikov. “That includes defense, but also any technology that enhances resilience and safety. For example, one of our investments is in quantum, which isn’t purely defense.”
Veronika explains that she personally leans toward the word ‘resilience.’ “For me, it covers everything: deep tech, defense, even mental resilience,” she adds.
Indeed, labels alone don’t define the technology. As MIT academics Fiona Murray and Gene Keselman recently wrote in War on the Rocks, “dual-use is a strategy, not a category… founders build capabilities and consider market fit across commercial and military markets as necessary and clear focus”. It’s a way of structuring a company so it can move fluidly between markets.
Defining the three worlds: single-use, pure defense, and dual-use
Industry insiders often talk about defense innovation as if it falls into three rough patterns.
Some startups begin life in civilian markets and only later adapt their technologies for military purposes. For example, an AI image-recognition tool that eventually finds its way into satellite surveillance.
Others sit firmly on the opposite end of the spectrum, building technologies that are purely military from the outset: fighter jets, hypersonic weapons, secure communications. They may be strategically vital, but they remain dependent on long procurement cycles.
Take the F-35 fighter jet program: development began in the 1990s, but the first combat-ready jets weren’t delivered until 2015, with total costs now projected to exceed $1.7 trillion over its lifetime. Similar patterns exist in Europe — the Franco-German-Spanish Future Combat Air System (FCAS) has already faced delays and is not expected to enter service before 2040. For startups, these timelines are an eternity.
Somewhere in between are the ventures conceived with both sides in mind from day one. These “dual-use by design” companies move quickly thanks to commercial markets while also securing the longer-term stability that comes from government defense contracts.
Nicola Sinclair, a London-based venture capitalist, explains the appeal: “Dual-use tech can serve both commercial customers and national-security customers. A lot of deep-tech is inherently dual-use… These technologies don’t rely on government procurement to survive or grow”.
This tension between long procurement cycles and the need for rapid deployment sits at the heart of the dual-use debate. Yet, wartime conditions have shown that militaries can sometimes shorten these processes under urgency. Off-the-shelf DJI drones were modified into reconnaissance and strike assets within weeks in Ukraine, a process that took weeks rather than the years a traditional procurement cycle would have required.
Battlefield technologies often spill into civilian life
On the other hand, some might argue that not every capability can or should be built this way — certain battlefield technologies demand a purely military focus, and trying to stretch them into civilian markets could compromise their performance.
Such examples are most vivid in countries at war, as is the case with Ukraine. Kateryna Bezsudna, co-founder and ex-CEO at Defence Builder commented that “the main challenge posed by dual-use tech is the loss of focus. At Defence Builder, we encourage our startups to focus on military applications instead of trying to serve both military and civilian sectors. Today’s reality dictates an urgent need for defence tech solutions on the frontline, thus we expect the startups to concentrate initially on military development.”
Yet history shows that technologies built for the battlefield could also spill into everyday life. In many cases they’ve become so commonplace that people forget their defense origins; GPS, drones, and the internet are three technologies born in the military.
Why ‘dual-use’ term matters now
Considering dual-use a strategy, rather than a tech category could actually help us progress further in our defense efforts in Europe. The timing isn’t coincidental and several factors are contributing to it.
Investment, specifically in dual-use tech, is surging. According to Crunchbase data, 17,619 dual-use scaleups now operate across NATO nations, with 1,025 squarely in defense tech. Dual-use funding hit nearly $1.2 trillion last year, while defense-specific startups raised $70.8 billion. McKinsey reports that global VC investments in defense-related companies rose 33 percent year-over-year, led by AI, autonomy, and biotech.
Governments are also trying to move faster. NATO launched its €1 billion Innovation Fund in 2023. This fund is explicitly designed to back technologies such as AI, robotics, space systems, biotechnology, quantum, new materials, and advanced manufacturing. Complementing NIF’s equity plays is DIANA, the Defence Innovation Accelerator for the North Atlantic. Fully operational since June 2023, DIANA is RAF’s strategic dual‑use innovation arm: it conducts competitive challenges inviting startups to propose technologies across NATO-priority themes like energy resilience, autonomy, secure communications, logistics, and infrastructure protection.
In summary, as analysts at StepStone Group put it, “Dual-use is critical to responding swiftly to emerging threats and introducing agility into lumbering bureaucracies.”
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