Markus Villig is best known as the founder of the unicorn startup Bolt, but over the past year he has also become an important advocate for the need to develop the defence industry in Estonia and Europe. Together with another prominent Estonian startupper, Ragnar Sass, they have created a monthly event – Estonian Defence Meetup – to bring together those involved and interested in the defence industry and to give a startup-like boost to its development. 

At the same time, Bolt’s founder confirms that he will remain associated with the defence industry more as a representative, explainer, and potential investor, and that he will continue his day-to-day work with mobility company development.

Markus Villig, more than a year ago, in February 2024, you launched the first Estonian Defence Meetup. Do you see that this initiative – to bring a startup mindset to the defence industry – has proven itself? We have heard from participants that the Estonian Defence Tech Meetup in Tallinn has grown into a mini conference.

Markus Villig: To date, there have been more than 10 such defence tech meetups already. It has been a good start, and the meetups are insightful and bring together quite a large group of people on a monthly basis.

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I started in the defence sector a year and a half ago with no previous experience of it, as I work in a completely different sector. But the full-scale war in Ukraine had been going on for 2 years by then, and I expected that by that time many new defence companies would have sprung up in Estonia and across Europe as a reaction to the war, giving us the capacity to defend ourselves.

But when I realised that things weren’t moving fast enough, I tried to think of what could be done to speed things up and activate this. I met a lot of people, from those in the Estonian Defence Forces to people in the European technology sector, and tried to understand the current situation and the challenges.

Firstly, I delved into how much Estonia is investing in defence; secondly, how this budget is being spent and whether it could be made more efficient; and thirdly, the aspect of how to engage with the private sector to bring more innovation into the defence sector and generally to get startups and investors involved. So I met with, among others, both the previous and the current prime ministers of Estonia, reassuring them that there is business support for defence investment, and we understand that in times of crisis, spending also needs to be increased.

“Defence budgets of countries around the world, in general, are geared towards very traditional means, and innovation is usually left with nothing. That’s a big issue, one that we’ve been persuading different parties, like the Government and the Ministry of Defence, to put more money into.”
Markus Villig, co-founder and CEO of Bolt

This is also evident more broadly in opinion polls in Estonia, which show that support for increasing defence spending is high. It is always worth reminding politicians of this, and it is something that needs doing across Europe. Personally, I have discussed the importance of this issue over the past year with, for example, French President Macron, who confirmed that defence spending must be increased and that Europe must be more independent in this. A couple of months ago, I spoke to UK Prime Minister Keir Starmer about this. Will these messages translate into real action, into spending and budgets, into boosting production? I would very much like to see that happening far more quickly here in Estonia.

On the use of defence funds, the biggest question mark for me was that the vast majority of equipment purchases go overseas – we buy primarily from US and European manufacturers, but there is no economic value added locally. This can be remedied by concrete actions – for example, the Estonian state has already set up a €100 million defence technology fund to invest startup capital in Estonian companies, and hopefully, within a couple of years, they will be able to get production up and running. Through such investments, the money will come back into the local economy.

Secondly, innovation – defence budgets of countries around the world, in general, are geared towards very traditional means, and innovation is usually left with nothing. That’s a big issue, one that we’ve been persuading different parties, like the Government and the Ministry of Defence, to put more money into. This would enable testing of experimental new technologies in order to more quickly build real capabilities that the defence forces can use. Today, procurement is very slow, buying what is already known. In fact, it would be worth keeping a very close eye on how and with what means warfare is actually being conducted on the front in Ukraine, and how much completely new technology is being used there.

GOOD TO KNOW
Estonia launched a €100 million Defence Fund, established to support the development of innovative defence and security capabilities to meet the growing global demand for new solutions. The fund invests its first €10 million in Darkstar, the first dedicated pan-European venture capital fund focused on military and dual-use technologies tested on the battlefield in Ukraine.

And thirdly, we come to these community meetups. We focus on how to attract more attention to the field and how to explain to investors and businesses that defence is an important field, not only for the preservation of our country, but also that it is commercially potentially attractive. I came up with the idea, and together with Ragnar Sass, we started to run these meetups. Ragnar has been running it successfully, and these meetings are super popular, not only in Estonia but also in Ukraine, Poland, Finland, etc. All the events are sold out, and the interest is really high.

How have these challenges been addressed so far, and how do you evaluate the progress over the last year? As you know, until recently, investing in the defence industry was completely out and taboo.

Markus Villig: The private sector has moved very fast, both in Estonia and in Europe. Indeed, a few years ago, the defence industry was roughly in the same category in the minds of investors as tobacco or gambling, something to be bypassed. Today, because the security situation has changed globally, its importance is understood. In Estonia, I would say, there is a consensus on this.

Interest in the sector is growing very fast. I myself have received dozens of offers for fundraising, and I know dozens of people who have left big startups to start their own defence companies. Many people from the startup sector have also joined defence companies to contribute in this way.

NATO’s DIANA and other defence industry accelerators have also been launched, which should bring a startup mindset to the sector. How do you assess their success or the potential for collaboration with you?

Markus Villig: Potentially they have a very good role to play. They provide the funding, the credibility, and the contacts to help startups get their first customers. In practice, unfortunately, these accelerators have been relatively slow and a great many of them are not creating the things that are needed.

“A few years ago, the defence industry was roughly in the same category in the minds of investors as tobacco or gambling, something to be bypassed. Today, because the security situation has changed globally, its importance is understood.”
Markus Villig, co-founder and CEO of Bolt

Dual-use technology is not necessarily the innovation that is needed in defence. It is the real tools of warfare that need support – we need drones, missiles, or new ways of producing weapons. There is an acute need to develop air defences (which are already being developed by Frankenburg Technologies) and attack drones (which are being developed by defence company Helsing, for example). But we will certainly find opportunities for cooperation, as the idea behind meetups is to bring together people in the field from across the region.

You’re best known as the founder and CEO of the globally successful ride-sharing platform Bolt, but perhaps you’re also planning to enter the defence industry with a new startup?

Markus Villig: I’m helping to raise public awareness. But on a day-to-day basis I focus on Bolt. I help raise public awareness, explain to politicians why it’s important, attract new investors and startups to the sector, and also invest and advise myself. It’s a different role to building a startup myself.

COMMENTS 

Safeguarding the future: empowering NATO with next-gen technologies to protect over one billion lives

Kadri Tammai, Regional Director NATO DIANA 

In recent decades, the pace of technological innovation has never been as rapid – or as necessary – as it is today. While cutting-edge commercial technologies have flourished in the civilian sector, many of these solutions hold untapped potential for defence applications. However, startups and innovators often prioritise commercial markets due to lower entry barriers and less complex regulatory environments.

Recognising this gap, NATO launched the Defence Innovation Accelerator for the North Atlantic (DIANA), a dedicated agency that scouts, supports, and accelerates disruptive technologies for defence and security. With operational centres in London, Halifax (Canada), and Tallinn, DIANA ensures a strong geographic presence across the Alliance.

Each hub taps into the unique strengths and core competencies of its host nation: London leverages the UK’s deep expertise in advanced defence technologies and security innovation, Halifax builds on Canada’s leadership in ocean tech, supply and value chain, and artificial intelligence, and Tallinn capitalises on Estonia’s globally recognised strengths in cybersecurity, digital resilience, and emerging defence tech. From Tallinn, we also lead DIANA’s acceleration programme across 32 nations, fostering collaboration between innovators, industry, and defence stakeholders.

Each year, DIANA identifies key technological capability gaps and launches challenge calls, inviting startups and researchers to develop solutions that push defence and dual-use technologies forward. Last year, we launched five challenges and received over 2600 applications – demonstrating the immense interest and potential in this field. Out of these, only 74 companies were selected for the programme, making DIANA one of the most competitive defence and dual-use innovation accelerators in the world.

Once accepted, participants join an elite group of top-tier companies shaping the future of security and defence. Through expert mentorship, funding, and access to NATO’s extensive network, DIANA helps innovators scale their solutions, bridging the gap between cutting-edge discoveries and real-world deployment.

Our core mission is clear: to equip NATO and its Allies with groundbreaking technologies that enhance security, resilience, and defence capabilities – ultimately protecting over one billion citizens.

In recent years, the defence innovation landscape has undergone a profound transformation. Across Europe and beyond, we are witnessing an unprecedented surge of interest from founders and innovation communities eager to contribute to defence and security. This shift is particularly pronounced in nations with a heightened sense of urgency, yet it reflects a broader, global trend – one that is reshaping how we approach security challenges in the 21st century.

DIANA stands at the forefront of this movement, ensuring that the best and brightest technologies are not only developed but also successfully integrated into the future of defence and security.

Estonia launched a €100 million defence fund 

Kristjan-Mart Piirsalu, SmartCap investment manager 

The €100 million fund for the emerging defence tech sector, launched by the Estonian Ministry of Economic Affairs and Communications, is managed by the national fund manager SmartCap.

Its primary goal is to develop Estonia’s defence industry by providing equity investments to companies developing innovative technological solutions that address the growing defence and security needs across Europe. To achieve this, the fund will invest up to €10 million per company in companies producing dual-use or military technologies and up to €20 million per fund in funds that invest in such companies.

We are actively working on a strong and growing pipeline of potential opportunities. It’s important to note that the investment process typically takes about 6 months from the initial contact.

SmartCap evaluates investment opportunities based on certain parameters, including strategic relevance to Estonia’s and NATO’s defence and security sector, market potential, including export capacity and growth opportunities, and the expertise and credibility of the founding team.

Investing alongside private investors not only enhances the attractiveness of the defence sector to private capital through risk-sharing mechanisms but also sends a strong signal that defence technology development, industry growth, and export capacity are strategically important for Estonia. While the requirement for private sector co-investment may narrow the selection pool, it also helps ensure a higher standard of quality in the companies chosen for investment.

This content is funded by the European Union – NextGenerationEU.

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