Australian Defence Startups Chase Europe’s $1.4 Trillion Spend

Australian defence tech companies are eyeing a new strategic frontier: Europe. As the European Union commits €800 billion (AU$1.4 trillion) through its ReArm Europe Plan 2030 to reduce military reliance on the US, local start-ups see an opportunity to supply sovereign technologies, though scaling to global markets remains a key challenge.

Currently, Europe is ramping up its defence budgets to prepare for a future where US support may not be guaranteed, especially amid political uncertainty. This realignment has created demand for niche technologies, such as secure communications and navigation tools, which Australian firms are beginning to supply. Canberra-based Penten, which just merged with UK cyber firm Amiosec to form PentenAmio, is one example of this growing trend.

PentenAmio aims to generate more than AU$125 million in revenue this year by providing encrypted mobile tools and electronic warfare technology to governments in Australia and Britain. The company has also opened discussions with Canadian and European authorities as it pursues new export deals. All prior backers, including private equity firm Five V Capital, reinvested following the merger, though the deal’s valuation remains undisclosed.

Meanwhile, Sydney-based Advanced Navigation is experiencing a surge in orders from European markets for its GPS-independent positioning systems. These high-accuracy tools serve both military and civil applications, and the company highlights how Australia is increasingly seen as a reliable supplier of dual-use technology.

To scale globally, however, Australian defence innovators must look beyond the local market, which is considered too narrow by venture capital firms. These investors prefer companies capable of selling to multiple foreign militaries and commercial sectors, rather than those relying solely on the Australian Defence Force, whose budgetary shifts can put start-ups at risk.

The bigger play here is geopolitical: Europe’s revived commitment to self-defence, spurred in part by shifting US foreign policy, is transforming global defence markets. While the funding flow may be slow—government deals typically are—the structural shift seems long-lasting and opens the door for Australia-based firms with export-ready innovations.

Source: Australian Financial Review, European Commission, Atlantic Council.