AVP & Earlybird Launch E2D, a €500M European Defence & Dual-Use Fund
TL;DR
AVP (the independent growth platform formerly known as AXA Venture Partners) and Berlin-based Earlybird have launched E2D, a European dual-use and defence technology growth fund targeting €500 million, with a first close set for June 30. The fund is one of the most significant Franco-German collaborations in European tech, built to plug the growth-stage capital gap that has historically pushed Europe's best defence and dual-use scale-ups into the arms of US investors. E2D will write roughly €25 million average tickets into around 20 companies across space, air, land, maritime and subsurface domains, backing both defence-native and dual-use businesses. It arrives at the exact moment European defence budgets are exploding, France at €76bn, Germany at €152bn, and an €800bn EU plan, making this less a thematic bet than a structural one on European sovereignty.
Key Takeaways
This fills the growth-stage gap, not the seed gap. Europe has spawned plenty of early-stage defence and deep-tech micro-funds in the past three years, but almost no one writing €25M+ growth checks. That is precisely where European companies ran out of domestic options and turned to US capital. E2D is targeting the Series B-and-beyond scaling round, which is the highest-leverage place to keep capital, talent and IP on the continent.
The Franco-German axis is the moat. Pairing AVP's Paris base and transatlantic platform with Earlybird's Berlin deep-tech franchise is not just symbolism. France and Germany are the two largest defence spenders and procurement markets in the EU, and a fund with genuine reach into both, plus a strategic committee of NATO and prime-contractor leaders, has structural access to customers that a single-country fund cannot match.
Dual-use is the risk hedge, not a hedge against conviction. By explicitly backing dual-use as well as defence-native businesses, E2D widens its exit universe to commercial acquirers and markets, softening the dependence on long, unpredictable government procurement cycles. That is the right structural choice for a growth fund that needs liquidity inside a finite fund life.
The 85% problem is the whole thesis. Since 2019, roughly 85% of NATO defence-tech venture funding has gone to US firms. E2D is an explicit, institutionally-backed attempt to repatriate that flow, and the LP base of large financial institutions and corporates signals that European capital allocators are finally willing to fund the category at scale.
Fund Overview
Fund Name: E2D (European Dual-Use and Defence)
Fund Size: €500 million target; first close June 30, 2026
Stage: Growth-stage (Series B and later)
Check Size: ~€25 million average ticket, targeting roughly 20 companies
Geography: Europe (Franco-German anchored, pan-European mandate)
Focus: Defence-native and dual-use technology across space, air, land, maritime and subsurface domains; reported priority areas include semiconductors, AI, New Space, drones and directed energy
Key LPs: Large financial institutions and corporates (not individually disclosed at launch)
Why This Fund Matters
For most of the last decade, European defence technology was effectively un-fundable at scale on its home continent. LP mandates excluded weapons and defence exposure, institutional capital steered clear of the category for reputational reasons, and the result was a structural dependency: the best European defence and dual-use companies raised their growth rounds from American funds, and with that capital went board seats, follow-on rights, talent gravity and, often, the centre of gravity of the IP itself. E2D is a direct response to that decade of underinvestment, and its timing is what makes it serious rather than opportunistic.
The macro backdrop has changed faster than the capital base. France has committed €76bn to defence, Germany €152bn, and the EU has sketched an €800bn European defence plan, the largest structural shift in European security spending in a generation. That spending creates enormous pull-through demand for exactly the kind of modern, software-defined, rapidly-iterating companies E2D intends to back. But government budgets buy capabilities; they do not, on their own, build the scale-up companies that deliver those capabilities. The missing link has been growth equity, and that is the gap E2D is built to close.
What separates this from the wave of seed-stage defence funds is the cheque size and the access model. A €25M average ticket into around 20 companies is a concentrated, conviction-led growth portfolio, not a spray-and-pray index. Combined with a strategic committee drawn from the armed forces, NATO and European primes, the fund is explicitly selling founders something money alone cannot buy: a path to procurement and to the prime contractors who are the natural customers and acquirers. In defence, distribution and certification are the hard part, and a fund that can shorten the road to a government or prime contract is offering genuine differentiation.
For LPs, E2D is also a signal about the broader normalisation of the category. The fact that large financial institutions and corporates are anchoring a half-billion-euro defence vehicle, after years of mandates that explicitly forbade it, tells you the European capital base has reframed defence from a reputational liability into a sovereignty imperative. If E2D closes at or near target on June 30, it will be one of the clearest proof points yet that European defence tech has crossed from niche to mainstream institutional allocation.
The Team
E2D is structured with AVP and Earlybird serving as advisors to the fund, with a dedicated team drawn from both firms working exclusively on it. The public faces of the launch are Benoit Fosseprez, General Partner at AVP, and Roland Manger, Co-Founder of Earlybird. Notably, the partner team includes investors who have been backing dual-use and defence technology for over a decade, well before most European LPs would permit it, which matters in a category where pattern recognition and operator relationships are scarce and hard to fake.
The two firms bring complementary institutional weight. AVP is an independent global platform managing more than €2.5bn across venture and growth strategies, investing from New York, London and Paris, with more than 60 technology investments since 2016 and a transatlantic vantage point that is unusually relevant for a fund trying to compete with American capital. Earlybird, founded in 1997, is one of Europe's most established VCs, with roughly €2.5bn under management and a track record of 9 IPOs and 41 trade sales, plus deep-tech and hard-tech credibility from a portfolio history that includes names like UiPath and European space and frontier-tech companies. The combination, transatlantic growth discipline plus pan-European deep-tech roots, is well-matched to the mandate. The open question, as with any two-firm advisory structure, is governance: shared decision-making across two storied franchises can either compound conviction or slow it, and execution speed is something this team has explicitly promised.
What This Means for Founders
If you are running a European defence-native or dual-use company approaching a growth round, E2D should move straight to the top of your target list. It is one of the very few sources of €20-30M domestic growth capital that also brings credible procurement access and a strategic committee wired into NATO and the primes. For founders who have been quietly assuming their Series B would have to come from a US fund, this changes the calculus, and it lets you keep your cap table, board and IP European, which increasingly matters for both customers and government contracts.
The practical filter is fit. E2D is concentrated and growth-stage, so it is not the right first call for a pre-product seed company; founders at that stage should still target the early-stage defence specialists and convert to E2D later. What E2D wants is companies with modern operating models, rapid execution and a clear mission focus that can scale across both defence and commercial markets. If your technology has a genuine dual-use angle, lead with it: the commercial pathway is part of what makes you fundable here, because it broadens the exit options the fund cares about.
Fund Momentum Take
We think E2D is one of the most strategically important European fund launches of the year, and not only because of its size. The European defence-tech narrative has been long on rhetoric and short on growth capital; a €500M, Franco-German, institutionally-anchored growth fund is exactly the missing piece. Pairing AVP's transatlantic growth muscle with Earlybird's deep-tech pedigree is a genuinely strong combination, and the explicit focus on procurement access via a NATO-and-primes strategic committee is the kind of edge that actually compounds in this sector.
The risks are worth naming clearly. First, it is a launch, not a final close: the €500M is a target and the first close is June 30, so the headline number still has to be delivered. Second, European defence exits remain unproven at scale, the natural acquirers are a handful of slow-moving primes, IPO windows for defence are thin, and procurement timelines can outlast a fund's patience, which is precisely why the dual-use hedge is so important. Third, the competitive field is crowding fast, from the NATO Innovation Fund to American giants like General Catalyst and a16z's American Dynamism pushing into Europe, and a two-firm advisory structure must move quickly to win the best deals. Finally, dual-use brings export-control and ITAR-adjacent complexity that can complicate both investment and exit.
Our bet: the macro tailwind is so strong, and the growth-stage gap so real, that a fund with this calibre of team and access is well-positioned to be a category leader rather than a casualty. The number to watch is the June 30 first close, how much of the €500M is committed, and which named institutions show up, because that will tell us whether European LPs are truly ready to fund sovereignty or merely talk about it. If E2D delivers, expect a fast-follow of copycat European defence growth vehicles within twelve months.
Frequently Asked Questions
How big is E2D and is it already raised?
E2D is targeting €500 million. It has been launched with a first close scheduled for June 30, 2026, so the full target has not yet been finalised; the first close will show how much committed capital is in place.
Who is behind the fund?
It is a Franco-German collaboration between AVP (the independent global growth platform formerly known as AXA Venture Partners, based in Paris/London/New York) and Earlybird, the Berlin-headquartered pan-European VC founded in 1997. Both firms serve as advisors to E2D, with a dedicated team working exclusively on it. The public leads are Benoit Fosseprez (GP, AVP) and Roland Manger (Co-Founder, Earlybird).
What stage and check size does E2D target?
It is a growth-stage fund, planning to back around 20 companies at an average ticket of approximately €25 million, concentrated rather than diversified.
What does the fund invest in?
Defence-native and dual-use technology across space, air, land, maritime and subsurface domains. Reported priority areas include semiconductors, AI, New Space, drones and directed energy, with a first investment expected by summer 2026.
Why does a European defence growth fund matter now?
European defence budgets are surging, France €76bn, Germany €152bn, and an €800bn EU plan, while since 2019 roughly 85% of NATO defence-tech venture funding has gone to US firms. E2D is designed to keep growth capital, talent and IP on the continent and reduce that dependency.
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