Swedish Fund Backs Ukraine's DefenceTech with $11M

Jan de Vries · 2026-06-12

A new Stockholm-based investment fund is making waves in the DefenceTech space, and it's got a sharp focus on Ukraine. Varangians, co-founded by Beetroot's Andreas Flodström, just closed with over $11 million (that's about 100 million Swedish kronor). The fund's mission? To back Ukrainian engineers who are building cutting-edge tech right on the front lines. ### What Varangians Is All About Varangians isn't your typical venture capital fund. It's built around a simple but powerful idea: Ukrainian innovators are creating some of the most effective, low-cost defense technology in the world, and Europe needs it now. As the co-founders put it, "We founded Varangians because we have seen how Ukrainian engineers innovate under fire; producing low-cost, effective tech that Europe urgently needs." The fund has already made four investments, with three public names: Norda Dynamics, Himera, and Sine Engineering. The fourth company is still under wraps, but it's described as a manufacturer of drones, ground vehicles, and components for unmanned systems, plus they offer drone pilot training and run an R&D lab. ### Why This Matters Now Sure, Varangians' $11 million close is small compared to the big boys. DTCP just launched a $520 million Project Liberty, and Kembara closed its first round at $780 million. But that's kind of the point. Varangians is carving out a niche by being Ukraine-first and focusing on tech that's actually being tested in real combat conditions. This fits a bigger trend across Europe, where capital is shifting toward defense, dual-use technologies, and resilience. Funds like Seraphim Space and 360 Capital, along with the EU-Ukraine defense innovation program, are all betting on sovereignty, space, autonomy, and cybersecurity. Varangians just does it with a boots-on-the-ground approach. ### The Portfolio Companies Let's break down what these startups are working on: - **Norda Dynamics**: Building an autonomous UAV piloting system that works even when communications are jammed or blocked. - **Himera**: Creating secure communication systems that are easy to use and resistant to electronic warfare, designed for both civil and emergency use. - **Sine Engineering**: Developing a next-gen UAV communication and positioning platform for environments full of jamming, interference, and spoofing. The fourth company, still confidential, is all about manufacturing drones and ground vehicles, plus training pilots and running an R&D lab for innovation and testing. ### How Varangians Operates Varangians isn't just writing checks and walking away. They've got a hands-on model that combines targeted scouting with active support after investment. The team finds promising companies through Ukraine's defense innovation networks, then evaluates them based on technical insight, operational relevance, and governance standards. They also offer consulting services for organizations looking to set up shop in Ukraine. That includes help with local partners, security and risk planning, field testing, and frontline-driven R&D. It's a full-service approach that goes beyond just funding. ### The Story Behind the Name "Varangians" might sound ancient, and that's intentional. It refers to the Swedish Vikings who traveled to Ukraine and Kyiv around the year 800, playing a role in the region's early history alongside Ukrainians. For the fund, the name symbolizes a renewed connection between Sweden and Ukraine through technology, resilience, and defense innovation. Andreas Flodström, the co-founder, is best known for Beetroot, the Swedish-Ukrainian tech ecosystem he started in Stockholm back in 2012 with Gustav Henman. So this fund feels like a natural extension of his work bridging the two countries. ### A Quick Look at the Bigger Picture Varangians might be smaller in size, but its focus is razor-sharp. While other funds chase growth at scale, Varangians is betting on the idea that the best defense tech comes from people who are actually living through the conflict. It's a strategy that could pay off big, both for Ukraine and for Europe's broader security needs.