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How Portuguese Startups can rise in a sector of opportunity?
In the wake of global geopolitical turbulence and shifting investment paradigms, a new frontier is emerging for Portuguese startups: defense technology. Once an outlier, defense tech is now yielding national unicorns, international funding, and Europe’s attention. European founders are no longer sitting on the sidelines when it comes to defense, security, and resilience, they see these fields not as controversial niches, but as areas where startups can scale real impact, build long lasting companies, and contribute directly to Europe’s community’s security.
For decades, defense innovation meant billion euro programs to build new aircraft, ships, or weapons systems; projects so capital intensive that only established corporations could participate. That paradigm is breaking. Today, the real opportunity lies in solving specific, high-value problems: faster data fusion in the field, more resilient communications, sharper maritime surveillance, lighter autonomous systems, you name it.
This shift plays to Portugal’s strengths. Portuguese startups are small, agile, and resource conscious. They don’t need to reinvent an entire platform; they can design the crucial component, the algorithm, the sensor, or the interoperability layer that unlocks new capabilities. These contributions are less capital-intensive, faster to prototype, and adaptable across both defense and civilian markets. In short, Portugal doesn’t have to build the next fighter jet. It can build the piece that makes the fighter jet smarter, safer, and more effective.
Last week, at I took the opportunity to know more about the start of Portuguese defense tech industry on Above & Beyond hangout by Startup Portugal. Tekever, Portugal’s unmanned aerial systems pioneer, was one the panel. Backed by the NATO Innovation Fund, it has flown more than 10.000 operational hours over Ukraine, proving not just the credibility of its technology but also the speed at which European startups can deliver in live operational theaters. With demand accelerating, Tekever has hit unicorn status, opened a second production facility, and is creating jobs while revitalizing the industrial base. But examples like this only succeed if companies can access the right fuel: capital, production capacity, and resilient supply chains.
Ambitious government strategies are important, but paper frameworks don’t grow ecosystems. Public leaders must clearly articulate defense needs, open procurement pathways, and build departments that can engage with ambitious entrepreneurs as effectively as they do with established primes or SMEs in the supply chain. Fixing chronic contracting bottlenecks should be at the top of the list.
On the other side, investors need to rewire their approach. Building tomorrow’s defense tech giants requires a full capital stack venture capital, private equity, debt, and eventually the public markets. Without that breadth, startups risk stalling in the “valley of death” between prototype and scaled deployment.
Only when these two pillars, government demand and investor depth, connect seamlessly at every stage of the entrepreneurial journey will Europe be able to back founders who are mission-driven and ready to build the ventures of tomorrow.
For investors, the commitment to 5% investment in defense (3.5% for defense and security and an additional 1.5% for resilience, i.e., critical infrastructure and preparedness) is a moment of opportunity. Investors can now move away from investing in specific technology sectors and towards investing in emerging technologies that solve specific problems that Europe is facing, from strengthening its defense and security to bolstering its industrial base.
The ingredients for success are converging: sovereign demand, startup agility, tech talent, and funding. Portugal’s defense tech startups are poised not just to survive, but to lead in Europe’s defense innovation renaissance.
This week, Startup Portugal officially announced its new leadership team. It’s also a good moment to acknowledge the work of former Executive Director, António Dias Martins. Under his leadership, some key milestones were achieved: improved recognition of Portugal's Startup scene; Portugal's first legal definition of a Startup, enabling public policies and incentives; flagship initiatives like SIMConf and Road2WebSummit; and a solid vision that startups could elevate Portugal to a new level of development, shaping a more structured and ambitious startup ecosystem in Portugal. This laid the groundwork for what comes next.
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