360 Capital secures €85 million for its deeptech fund.

      The new vehicle from Paris-Milan VC signifies that European investors are increasingly integrating defense into their deeptech strategy.

      A narrative that could have emerged three years ago—and likely would have drawn some skepticism in refined European venture circles—can now be observed: a deeptech fund, endorsed by a prominent defense contractor, is raising tens of millions to invest in dual-use technologies at the convergence of software, hardware, and national security.

      Based in Paris and Milan, the French-Italian early-stage VC manages over €500 million in assets and has successfully secured €85 million for its new deeptech vehicle, supported by at least one European defense contractor.

      This fund clearly marks a shift toward the more challenging, long-term technologies that Europe’s reindustrialization agenda is starting to demand, and acknowledges, as increasingly recognized by many continental investors, that the most favorable returns in deeptech over the next decade may stem from technologies with dual-use capabilities.

      The influx of defense investment into deeptech VC is noteworthy. The announcement from 360 Capital comes in a landscape transformed substantially since the 2022 invasion of Ukraine. European defense primes, which are large established contractors providing militaries with everything from armored vehicles to electronic warfare systems, have traditionally had minimal interaction with the venture ecosystem.

      Their innovation pipelines typically relied on internal R&D programs and established supply chains rather than seed-stage funds making €1 million investments in autonomous systems or AI-based logistics.

      This approach has changed. The urgent need to modernize military capabilities rapidly, alongside the recognition that the most accelerated technological advancements are occurring outside conventional defense supply chains, has propelled several European primes toward limited partner (LP) roles in venture funds for technology access and strategic insights.

      The European Investment Fund has also committed €50 million to Join Capital’s Fund III, which focuses on deeptech and dual-use startups, under the InvestEU Defence Equity Facility, indicating that institutional support for this model is now increasingly common.

      For 360 Capital, a primary LP offers more than just funding. It also becomes a potential channel for procurement discussions relevant to portfolio companies— a connection that has traditionally posed significant challenges for European defense startups.

      The continent’s procurement processes are often slow, dispersed across national defense ministries, and generally reluctant to engage with early-stage firms. An anchor LP that has a vested interest in the portfolio’s commercial success can alter this dynamic, even if only slightly.

      Founded in 2001, 360 Capital has navigated various phases of European technology investment, from internet-era digital startups to its current focus on deeptech and climate technology. Its portfolio encompasses early-stage companies in AI, robotics, energy technology, and advanced materials, sectors where the new fund’s mandate will likely expand to include defense-related applications.

      The raise of €85 million follows a 2024 announcement regarding the firm’s initial €30 million tranche for 360 Digitaly, a fund aimed at digital transitions. The defense-related deeptech vehicle seems to illustrate a distinct strategy that captures both the opportunities the firm identifies in the present geopolitical landscape and the structural capital available from defense primes looking for technology exposure.