> ## Content Index > Fetch the complete content index at: https://fomo.observer/llms.txt > Use this file to discover other available public pages before exploring further. # KÄRT SIILATS: Building Europe's late-stage defence capital - URL: https://fomo.observer/kart-siilats-building-europes-late-stage-defence-capital/ - Published: 2026-10-07T10:36:22.000Z - Updated: 2026-10-07T10:36:22.000Z - Author: Fomo.Observer - Tags: Dispatches, Defence, Investing This week I spoke at [Resilience Conference](https://resiliencemedia.co/?ref=fomo.observer) London about late stage defence tech investing in Europe. Here are a few of my thoughts after the panel. The first thing any company needs besides team and product is revenue and here Estonia is showing the way for defence techs, with a €100 million programme to purchase defence tech products and donate them to Ukraine, part of the ongoing annual 0.25% of GDP commitment. Not only do we have this programme, but we also make it visible, our Prime Minister, Kristen Michal, speaks regularly at tech conferences about it. Europe does not have a lack of money problem, it's about where the money is going - European pension funds invest much less in venture capital than the American ones, and even if they do, that money goes to America, not to support Europe's own companies. Estonia’s sovereign fund, [SmartCap](https://www.linkedin.com/company/smartcap/?ref=fomo.observer), is a pioneer in Europe in investing in pure defence tech (non dual use) and its €100 million fund has already catalysed private capital into funds like the Estonian defence tech VC [Darkstar](https://www.linkedin.com/company/darkstar/?ref=fomo.observer). In places like Estonia, where the pension systems are still new and small, it is understandable they may not have enough scale for much illiquid investing yet (although they do fully understand the contribution to the local economy they could make through that as soon as they are allowed to grow big enough), but the older Western economies do not have that excuse. The Americans step in to fill the gap. Which is great to some extent - investors like [Chris Morales](https://www.linkedin.com/in/chrisjmorales/?ref=fomo.observer), Partner at Point 72 Ventures, bring valuable knowledge and they bring more risk appetite which allows them to give founders higher valuations and lower dilutions, which benefit the local early stage ecosystem. But there's also costs: Local capital and local revenues allow European companies to keep their headquarters local. It used to not matter much - if American funds required a Delaware registration, everyone complied and we still considered them European startups if the founders and team sat mostly here. But after the US government demonstrated how it can force Anthropic to turn off their products for the rest of the world, European headquarters became much more important for tech sovereignty. If we want guaranteed access to advanced AI models, we need our own versions and we need to support companies, like [Mistral](https://www.linkedin.com/company/mistralai/?ref=fomo.observer), who are building them. It goes beyond models as well - we cannot talk about European tech sovereignty in any sector if all European startups have no choice but use AWS and hold their data in American servers. We need a fully functioning European cloud infrastructure as an option for our founders. And finally - we need functioning exit infrastructure - new great founders tend to come from employees of great prior exits (like Wise and Bolt from Skype, Veriff and Lightyear from Wise, etc. etc.). But unlike America, with its functioning Nasdaq market where ultimate capital holders dare to take some risks, European stock markets are fragmented, illiquid and risk averse, cutting off a crucial lifeline for the founders and again reducing our potential for scalable homegrown startups, in both defence tech and elsewhere. *\*this post originated as a LinkedIn post* --- [Estonia needs to find its next advantageFor a country synonymous with tech unicorns, they have been pretty thin on the ground lately. We’ve been searching high and low for our next unicorn for several years now - circling Starship and Pactum for a while, and lately even tried giving Skeleton and Frankenburg a nudge too, but![](https://storage.ghost.io/c/08/7f/087f88ab-cb17-44cc-928d-9cfca14a3fb9/content/images/icon/Untitled--800-x-800-px-Video---1--bb3cc43b-5deb-4814-a2c0-44abfbebb8da.gif)Fomo.ObserverTriin Hertmann![](https://storage.ghost.io/c/08/7f/087f88ab-cb17-44cc-928d-9cfca14a3fb9/content/images/thumbnail/triin_02-9ea1109c-15ca-422b-82ef-ae4ade207b01.jpg)](https://fomo.observer/estonia-needs-to-find-its-next-advantage/) ## Sign up for Fomo.Observer Startup stories from Estonia. Free weekly newsletter. Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime.