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| AI, defense fuel Europe’s VC-backed cybersecurity renaissance |
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By Leah Hodgson, Sr. Venture Capital Reporter
Cybersecurity has emerged as one of the few VC verticals in Europe to experience an increase in dealmaking this year, as demand driven by AI and the defense sector fuels investor enthusiasm.
According to PitchBook data, European startups have raised €2.7 billion (about $3.1 billion) across 266 deals in 2025. This exceeds 2024’s levels and, at the current pace, would mark its highest value since 2021’s peak.
VC investment in cybersecurity was on a steep upward trajectory. It has long been a key sector for VC funding, with steady annual growth until 2022, when a global pullback in dealmaking affected most sectors. However, this year saw a rebound in growth, as an increase in cyberattacks puts key high-growth sectors under pressure. |
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Budgets to combat cyber threats are also growing. This year, the EU allocated €145.5 million to enhance cybersecurity for small and medium-sized businesses and public administrations.
AI is the biggest driver of cybersecurity investment. Traditional tools have been overwhelmed by attackers using AI to increase the volume, speed and complexity of breaches. This has created new opportunities for startups.
Companies like Dublin-based Tines are using AI to investigate alerts automatically, summarize incidents and recommend next steps. The startup raised a $125 million Series C in February.
Others, such as Israeli companies Seemplicity and Legion, are going further by developing AI agents to help security teams fix exposures faster than humans.
The rapid pace of AI development is also creating new types of risk. Noma Security, which raised $100 million in July, focuses on protecting agentic AI used by businesses.
The growth of the defense sector has also led to renewed VC funding. Cyber warfare has become a central part of modern conflict, making cybersecurity a key priority for government spending. Among startups raising considerable rounds is Israel’s Dream, which raised a $100 million Series B in February for its software protecting critical national infrastructure sites.
Many startups in the space are developing dual-use technologies, meaning they can be used for both civilian and military purposes. |
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| A message from Enterprise Ireland |
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| Ireland now Europe’s #1 lifesciences & health tech VC hotspot |
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Download the new PitchBook report on Ireland’s lifesciences & health tech sector – Europe’s #1 per capita VC destination. Powered by Enterprise Ireland’s unmatched investment activity and a world-class R&D ecosystem and STEM talent pool, Ireland is now a launchpad for next-generation medical innovation. Home to 400+ indigenous companies, stars like FIRE1, Aerogen, LUMA Vision, Bluedrop Medical and Neurent Medical are delivering cutting-edge cardiac devices, advanced imaging, AI diagnostics and minimally invasive therapies worldwide. With a record 89 deals in 2024 and ongoing megadeals, Ireland has cemented its place as Europe’s premier health tech investment hub.
Download now |
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• Our 2026 US Venture Capital Outlook signals a cautiously optimistic reset for VC After years of limited liquidity and slow fundraising, a measured but tangible recovery is expected. Read more.
• Top VC firms flooded into the defense and industrial tech sectors in Q3, as defense budgets expand and the US renews its focus on domestic manufacturing, according to our latest Emerging Tech Indicator. Read the report
• PineBridge's PE team has relaunched as Heron View Capital, following its split from the $215 billion investment firm, which has agreed to be acquired by MetLife Investment Management. Find out more
• Our latest Global Markets Snapshot breaks down a month of trends in the equity, debt and commodities markets, and also features private market activity. Read it now |
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| Q&A: DigitalBridge on the fundraising battle for digital infrastructure |
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| Golden |
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By Madeline Shi, Sr. Private Equity Reporter
Investment into digital infrastructure has boomed this year, alongside the continuing growth of AI.
Leslie Golden, the global head of capital formation and investor relations at DigitalBridge, which recently wrapped up an $11.7 billion fund, sat down with PitchBook to discuss how the firm is positioning itself in the face of increased competition and navigating AI hype.
PitchBook: What was the fundraising market like while you raised DigitalBridge Partners III, which launched in 2023?
Golden: This was a record capital formation event for DigitalBridge across fund and co-investment commitments.
That said, it has not been an easy two years of fundraising generally. Many LPs have been overallocated to private markets—in particular, infrastructure.
About a year ago, we also saw more entrants into the market. So, while we had a strong re-up rate, many of those allocations were a bit smaller than in prior vintages—a fundraising trend we are seeing across the industry. Fortunately, investor interest in our strategies has remained high. More than 65% of commitments came from existing investors.
Who are the newcomers entering this market, and how does DigitalBridge set itself apart?
Newcomers to the digital infrastructure sector are primarily existing infrastructure GPs that had been generalists but are now making larger allocations to digital infrastructure—in particular, data centers.
DigitalBridge has always focused entirely on digital infrastructure.
We offer a robust co-invest program and bring co-investors in at the very start of an investment. Many large funds limit LP access to direct co-invest. That's why our fund is sized the way it is—we're typically able to offer at least a one-to-one ratio of fund to co-investment.
What are the major challenges currently facing the data center market?
The biggest challenges are access to capital and access to power. For the industry, if we continue at the same pace of demand growth, power will become—and already has become—a gating item. We'll need to continue to be very resourceful in terms of securing power. |
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Smart reads that caught our eye.
• DoorDash's meticulous approach puts it heads above other food delivery businesses. Despite the company's rise, its CEO still wants to "master the last 100 feet." [Fortune]
• What went wrong in Europe's quest to develop a single market? Dreams of eliminating barriers and uniting Europe's economy are long gone. [The Financial Times]
• Vanguard has changed its mind. The massive asset manager will allow crypto ETFs and mutual funds to trade on its platform starting today. [Bloomberg] |
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