Digital Transformation Capital Partners (DTCP) wants to raise EUR 500 million for Europe's largest VC fund and has already attracted several prominent anchor investors.
The Hamburg-based investment firm Digital Transformation Capital Partners (DTCP) is working on the launch of Europe's largest venture capital fund to date specifically for defense start-ups.
The first well-known investors have already been acquired for the fund, which is targeting a volume of 500 million euros. This is according to a report by Bloomberg.
DTCP, which emerged from Deutsche Telekom around ten years ago, has completed the investments of its anchor investors, Managing Partner Thomas Preuß told Bloomberg News.
He confirmed that DTCP is ultimately aiming for a fund volume of 500 million euros.
Well-known anchor investors
As already announced in August, Porsche Automobil Holding SE $PAH3 (-1.29%)
$P911 (-0.82%) - the holding company of the billionaire Porsche-Piëch family - and Deutsche Telekom $DTE (-2.41%) had held talks about joining the new fund as anchor investors.
Both companies are currently awaiting antitrust approval for stakes of between 25.1 and 49.9 percent in the Luxembourg-registered defense fund. This is according to submissions made to the Federal Cartel Office in December.
If DTCP achieves its goal, the fund would be the largest defense fund for start-ups in Europe.
In light of the Russian invasion of Ukraine and US President Donald Trump's wavering support for NATO, European governments have increased their military spending to record levels. Start-up founders and investors are trying to profit from this boom.
Up-and-coming defense companies such as the drone manufacturer Helsing have now reached valuations in the billions.
Many defense funds in launch
Other players such as the French state investment bank Bpifrance, Dutch Keen Venture Partners and Lakestar founder and investor Klaus Hommels are also launching funds for the sector - albeit on a smaller scale, as Bloomberg News reported.
According to Preuß, DTCP plans to make around 30 investments with the new fund, with an average investment volume of around 20 million euros per company.
Investments will primarily be made in European digital defense infrastructure as well as start-ups in areas such as supply chains, connectivity, data centers, materials, robotics, cybersecurity and unmanned systems.
Dual-use strategy dominates
Around a fifth of the investments are to relate exclusively to military technologies, including weapons systems. The remainder will be spent on dual-use technologies with both civilian and military applications.
This represents a noticeable change in sentiment among fund managers and investors, who had long stayed away from investing in military equipment. In August, for example, Porsche dropped its earlier stipulation that investments could only have a dual-use character.