From Beetroot to Battlefield: One Investor's Mission in Ukraine's Defense Tech

Jan de Vries · 2026-09-23

Andreas Flodström didn't set out to become a defense tech investor. But after more than a decade building companies in Ukraine, he saw something the rest of Europe is only now waking up to: when your engineers are testing drones and secure comms under fire, innovation happens at a pace no peacetime lab can match. That's the story behind Varangians, the fund he co-founded and now chairs. It's a defense-tech-focused investment vehicle backing Ukrainian technologies that have already been battle-tested on the front lines. With over $10.8 million raised (converted from €10 million), the fund has put money into companies like Norda Dynamics, Himera, and Sine Engineering. Their work spans autonomous UAV systems, secure communications, and tech built for contested environments. ### The Long Road from Beetroot to Varangians Before Varangians, Andreas spent years building Beetroot, a Swedish-Ukrainian tech ecosystem that connected software talent in Ukraine with clients across Europe. That experience wasn't just about business. It was about trust, resilience, and learning how to operate in a country where uncertainty is the only constant. "You can't fake understanding a place like Ukraine," Andreas says. "You have to earn it, one project at a time." That decade of building companies gave him a front-row seat to the engineering culture that now powers Ukraine's defense tech boom. ### Why Ukraine Became a Defense Tech Hotspot Ukraine's drone and electronic warfare capabilities have evolved at a speed that has stunned Western military analysts. The reason is simple: necessity. When your survival depends on outsmarting an enemy in real time, you iterate faster, test harder, and cut through bureaucracy that would stall a typical defense contractor. Andreas points to three areas where Ukraine leads: - **Autonomous UAV systems** that can operate in GPS-denied environments. - **Secure communications** that work even when infrastructure is destroyed. - **Electronic warfare** tools that jam enemy signals while protecting friendly ones. These aren't lab experiments. They're field-proven systems, often refined within days of feedback from the front. ### The Dual-Use Dilemma One of the most interesting parts of the conversation is the balance between pure defense tech and dual-use technologies. Dual-use means a technology can serve both civilian and military purposes. Think drones for agriculture that can also do reconnaissance, or encrypted comms for business that also protect soldiers. For investors, this is both an opportunity and a responsibility. Andreas is clear that backing defense tech isn't like backing a food delivery app. You're making a bet on technologies that could determine outcomes in real conflicts. > "If you're going to invest in defense, you need to be honest about what you're doing. This isn't a game. It's about protecting people." ### Is Europe Putting Enough Money In? Here's where the numbers get interesting. In 2026, disclosed European defense tech and adjacent dual-use startup funding reached about $721 million (converted from €667 million). That sounds like a lot until you compare it to the nearly $3.2 billion (converted from €3 billion) in announced investment capacity across new funds and vehicles. So there's a gap. The money is being raised, but is it actually reaching the startups that need it? Andreas argues that Europe still moves too slowly. Bureaucracy, risk aversion, and a lingering discomfort with defense investing all slow things down. Meanwhile, Ukraine is showing what's possible when you cut the red tape and let engineers solve problems in real time. The question is whether Europe will learn from that example or keep treating defense tech as a niche sector. ### What Europe Can Learn If there's one takeaway from Andreas's journey, it's this: innovation doesn't wait for perfect conditions. It thrives in chaos, as long as you have the right people and the will to adapt. Europe has the talent. It has the capital. What it needs now is the urgency. Whether today's defense tech investment surge marks the start of a new European industrial era is still an open question. But listening to Andreas, you get the sense that the train has already left the station. The only question is who's on board.