DTCP, which separated from Deutsche Telekom AG roughly ten years prior, has already secured investments from primary backers, managing partner Thomas Preuss informed Bloomberg News. He verified that the fund’s eventual objective is €500 million.
As Bloomberg detailed in August, Porsche Automobil Holding SE — the holding entity of the affluent Porsche-Piech lineage — and Deutsche Telekom were in discussions to act as core investors in the novel fund. As per December records submitted to the German antitrust authority, the two entities are awaiting authorization to possess stakes “ranging from 25.1% to 49.9%” in the Luxembourg-based defense fund.
A spokesperson for Porsche SE chose not to comment. Deutsche Telekom did not acknowledge a request for comment. In light of Russia’s comprehensive incursion into Ukraine and former U.S. President Donald Trump’s wavering backing of NATO, European governments have escalated military spending to unprecedented levels. Emerging company founders and backers are keen to capitalize on this surge, propelling promising defense firms, such as drone manufacturer Helsing, to valuations in the billions.
Should DTCP attain its intended scale, the fund will become the most substantial defense venture fund for fledgling businesses in Europe. According to Bloomberg News, smaller-scale funds for allocations within this arena are drawing French state bank Bpifrance and Dutch Keen Venture Partners, along with Lakestar founder and investor Klaus Hommels. DTCP intends to execute approximately 30 allocations from the fresh fund, with an average check size around €20 million, Preuss stated. The team will assess ventures pertaining to European digital defense infrastructure and will allocate funds to startups pioneering innovations in supply networks, communications, data hubs, materials, robotics, cybersecurity, and autonomous systems.
The firm intends to allocate about a fifth of the novel fund’s allocations specifically to military technology, encompassing weaponry. The residual investment will be directed towards so-called dual-purpose ventures, possessing both civilian and defense uses.
This highlights a change in perspective among fund managers and their investors, who previously avoided arms financing. In August, Porsche rescinded its prior stipulation to exclusively invest in dual-purpose ventures, Bloomberg conveyed.