How Lithuania’s Sovereign VC Fund is Leading the Charge in Defense Technology Innovation
Europe is increasingly recognizing the importance of investing in defense, and this trend is echoed by European venture capitalists (VCs). Lithuania, with its historical context of Soviet occupations, is taking proactive measures by dedicating 5% to 6% of its GDP to military spending and supporting defense startups. This commitment comes as the nation marks the third anniversary of Russia’s invasion of Ukraine.
Lithuania’s Commitment to Defense Innovation
Lithuania’s sovereign VC fund, Coinvest Capital, has been a trailblazer in this arena, notably being one of the first in the region to focus on defense investments without requiring civilian use cases. Viktorija Trimbel, managing partner since February 2023, stated, “We were the first in the region [to be] fully authorized to do defense investments back in March 2023.”
Investments in Defense Startups
Coinvest’s largest investment has been in Unmanned Defense Systems (UDS), a Vilnius-based company specializing in optimizing the “kill chain.” Since 2023, Coinvest has allocated approximately €6.8 million (around $7.37 million) to various aerospace, defense, and dual-use startups.
While this amount may seem modest compared to the billion-dollar investments seen in U.S. defense tech, it is essential to consider it on a per capita basis in Lithuania’s small population of 2.89 million.
Co-Creation and Collaboration in the Startup Ecosystem
Co-creation is a vital concept in Lithuania’s investment strategy. Coinvest actively collaborates with business angels and other VCs to fund startups. For early-stage investments, the fund has implemented a capped profit-sharing structure, a model that Trimbel passionately supports.
- Trimbel is a board member of the Lithuanian Business Angel Network (LitBAN), which has grown to 324 members.
- The collective value of Lithuania’s startup ecosystem has surged, growing 39 times over the past decade.
- Despite progress, Lithuania is still awaiting a major exit comparable to Estonia’s Skype.
Positive Ripple Effects on the Ecosystem
Liquidity events like Vinted’s secondary sale have positively impacted the ecosystem. Trimbel noted that Coinvest’s exit from Interactio within 18 months significantly increased angel investors’ returns from 9x to 34x, fostering growth in the business angel community.
Coinvest’s sole limited partner, Lithuania’s national development bank, has also provided substantial capital to local VCs, including contributions to the NATO Innovation Fund (NIF).
The Historical Context Driving Investment
Trimbel’s personal history profoundly influences her commitment to defense. She recalls witnessing the harsh realities of Russian military actions during her youth. “For us, it’s not a textbook story,” she emphasized, referring to the traumatic history that shapes Lithuania’s collective memory.
With the ongoing conflict in Ukraine, a renewed urgency for defense investment is palpable. The 2025 edition of Radarom, a public fundraising campaign, raised over €5.6 million for drones and anti-drone systems, highlighting the community’s commitment to supporting Ukraine.
Community Engagement and Volunteering Initiatives
In response to the war, Trimbel has encouraged community involvement through various volunteering initiatives. The Lithuanian Riflemen’s Union (LRU), a government-backed nonprofit, plays a pivotal role in fostering both military training and community support. Together with Coinvest, it co-organized the Fire Shield hackathon, set to return in 2025.
Adapting to New Threats
Trimbel believes that past experiences, including the COVID-19 pandemic, prepared society for current threats. She actively participated in initiatives like a helmet-based ventilation protection project during the pandemic, showcasing her commitment to mobilizing society.
While defense tech remains a priority, Trimbel also advocates for diverse investments. She highlighted portfolio startup Walk15 and its upcoming “Labrador walk,” aimed at promoting outdoor activity.
As she noted on LinkedIn, “No other investment returns will matter if Ukraine does not receive sufficient support from allies.” Trimbel’s determination to prevent further aggression is emblematic of her resilient spirit.
For more insights on Lithuania’s evolving defense strategies and investment trends, explore our related articles on defense investments and Lithuanian startup ecosystem.
