The war in Ukraine, now well into its third year, has become more than a bloody geopolitical struggle between Moscow and Kiev. It has also turned into what many analysts describe as a vast testing ground for Western arms manufacturers, a place where new weapons technologies are deployed, refined, and marketed in real time. For Europe’s defense startups, the conflict has unleashed what the New York Times recently called a “gold rush” in weapons investment, as venture capitalists and governments alike pour billions into a sector once regarded as unattractive for private money.

This rapid influx of capital into European military tech firms underscores how deeply the war has reshaped the economic and strategic landscape across the continent. It is not only traditional arms giants like BAE Systems, Rheinmetall, or Thales that are profiting. A new class of dual-use technology startups-companies that straddle the line between civilian and military innovation-are now flourishing, their valuations skyrocketing as investors see both commercial and defense applications for their work.

One of the starkest examples is Munich-based Helsing, founded in 2021 with initial backing from Spotify co-founder Daniel Ek. In just four years, Helsing has surged to an estimated valuation of $12 billion. The firm supplies Ukraine with drones and software, constantly upgrading its products every few weeks to respond to the shifting dynamics on the battlefield.

“Before, no European V.C. was interested in defense,” Helsing co-founder Torsten Reil told the New York Times. “Now, everyone wants to invest in defense.”

This shift is reflected in the........

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