Inside Varangians: How a €10M Fund Bets on Ukraine's DefenceTech Future

Jan de Vries · 2026-09-23

Andreas Flodström didn't set out to become a defence investor. He spent over a decade building Beetroot, a Swedish-Ukrainian tech ecosystem that connected engineers, developers, and startups across borders. That experience gave him a front-row seat to something most Western investors miss: Ukraine's uncanny ability to innovate under pressure. Now, as co-founder and chairman of Varangians, he's putting real money behind that insight. Varangians is a DefenceTech-focused investment fund that backs Ukrainian technologies developed and tested in the toughest conditions imaginable—frontline combat. The fund has raised more than €10 million (about $10.8 million) and invested in companies like Norda Dynamics, Himera, and Sine Engineering. These startups work on autonomous UAV systems, secure communications, and technologies designed for contested environments. ### From Beetroot to Battlefield Tech Building Beetroot wasn't just a business move for Andreas. It was a decade-long education in resilience, engineering, and innovation. "You learn quickly that Ukrainian developers don't wait for perfect conditions," he says. "They build, test, iterate—often with limited resources and immense pressure." That mindset is exactly what DefenceTech needs. When Russia's full-scale invasion began, Andreas saw an opportunity to channel investment into technologies that could make a difference. But he also recognized a gap: European investors were hesitant to touch defence. Varangians was created to bridge that gap. ### The Name and the Mission The name Varangians refers to the Norse warriors who settled in Kievan Rus'—a historical link between Sweden and Ukraine. It's a fitting metaphor for a fund that connects Swedish capital with Ukrainian ingenuity. The fund's portfolio companies aren't just building weapons; they're building dual-use technologies that can serve both defence and civilian sectors. - **Norda Dynamics**: Autonomous UAV systems for reconnaissance and logistics. - **Himera**: Secure communication tools for teams in contested environments. - **Sine Engineering**: Advanced electronic warfare and counter-drone solutions. Andreas is careful to distinguish between pure DefenceTech and dual-use tech. "We're not just funding weapons," he explains. "We're funding technologies that can save lives, protect infrastructure, and eventually transition to civilian use. That's a responsibility we take seriously." ### What Europe Can Learn from Ukraine Ukraine has become a live laboratory for modern warfare. Drones, electronic warfare, and secure communications are evolving at a pace that traditional defence contractors can't match. According to Andreas, Europe has a lot to learn. "In Ukraine, feedback loops are measured in days, not years," he says. "A drone that doesn't work gets fixed overnight. That speed is a competitive advantage." In 2026 alone, European DefenceTech and adjacent dual-use startups have attracted approximately €667 million (about $720 million) in disclosed funding. Another €3 billion (roughly $3.2 billion) in announced investment capacity is waiting to be deployed. Yet Andreas believes the sector is still underfunded relative to its potential. "We're seeing momentum, but it's not enough," he warns. "Europe needs to treat defence innovation as a strategic priority, not a taboo." ### A New Industrial Era? The surge in DefenceTech investment raises a bigger question: Is this the beginning of a new European industrial era? Andreas thinks so—but only if investors, governments, and entrepreneurs work together. "Ukraine has shown what's possible when you combine engineering talent with urgency," he says. "If Europe can replicate that model, we'll not only strengthen our defence but also create a new generation of high-tech companies." For now, Varangians remains focused on its mission: backing Ukrainian founders who are building the future of defence, one innovation at a time. And for Andreas, it's personal. "I've seen what Ukrainians can do with almost nothing," he says. "Imagine what they can do with proper support." *If you found this conversation valuable, share it with someone who cares about the future of European tech.*