As Europe becomes increasingly aware of the need to boost its defense capabilities, European venture capitalists are also taking notice. Lithuania, in particular, has a deep understanding of the importance of defense due to its painful history of Soviet occupations. The country has committed to allocating 5% to 6% of its GDP to military spending and is actively investing in defense startups, with its sovereign venture capital fund, Coinvest Capital, at the forefront of these efforts.

Coinvest Capital, which was the first in the region to be fully authorized to make defense investments in March 2023, has been a pioneer in this field. Viktorija Trimbel, the fund’s managing partner, has been instrumental in driving this initiative. “We were the first in the region to be fully authorized to do defense investments back in March 2023,” she emphasized. Trimbel’s passion and energy are evident in her relentless advocacy for innovation in defense tech to strengthen Europe’s security.

One of the companies that has received significant investment from Coinvest is Unmanned Defense Systems (UDS), a Vilnius-based company focused on optimizing the “kill chain.” The evergreen fund has invested approximately €6.8 million (around $7.37 million) in aerospace, defense, and dual-use startups since 2023. While this amount may seem modest compared to the large rounds of funding received by US defense tech companies, it is substantial when considered on a per-capita basis, especially in a small country like Lithuania with a population of 2.89 million.

Coinvest’s investment approach is centered around co-creation, which is a notion that Lithuania often emphasizes. The fund co-invests in startups with business angels and other venture capitalists, adopting a capped profit-sharing structure for early-stage deals. Trimbel is particularly enthusiastic about this approach, which she believes will help to attract more smart money into the market. As a board member of the Lithuanian Business Angel Network (LitBAN), she is keen to see more investors supporting the country’s startup ecosystem.

The collective value of Lithuania’s startup ecosystem has increased 39 times in 10 years, but the country still lacks a major exit like Skype’s was for Estonia. However, liquidity events such as Vinted’s secondary sale have had a positive impact, and Trimbel believes that Coinvest can multiply its investments quickly. The fund’s exit from Interactio after just 18 months boosted angel investors’ returns from 9x to 34x, demonstrating the potential for significant returns on investment.

Trimbel is vocal about the need for more capital to flow into the defense tech sector, not just in Lithuania but across Europe. She points to the success of other local venture capital funds, such as BSV Ventures and ScaleWolf, which have received significant investments from Lithuania’s national development bank. The bank has also contributed to the NATO Innovation Fund (NIF), highlighting the country’s commitment to defense innovation.

The Lithuanian government has also been actively supporting the development of the country’s defense tech sector. The Ministry of Defense has invested €100 million in defense innovation, and Trimbel is pleased to see governments across Europe embracing the trend of investing in deterrence and defense. This trend is crucial for supporting the competitiveness and resilience of European countries, she emphasizes.

For Trimbel, the need for defense investment is deeply personal. She recalls the trauma of Soviet rule, which has left a lasting impact on Lithuania’s collective memory. “When I was 18, I saw with my own eyes, Russian tanks killing people. So for us, it’s not a textbook story,” she said, referring to the 1991 January Events in which the Soviet military attempted to suppress Lithuania’s independence movement. The country’s history of occupation, deportations, and killings has created a strong sense of urgency and solidarity among its people.

The war in Ukraine has renewed this sense of urgency, and Trimbel has been active in supporting the country’s defense efforts. She endorsed the Radarom public fundraising campaign, which collected over €5.6 million for drones and anti-drone systems, including from UDS. “Support Ukraine NOW … and any other day till victory,” she urged. Trimbel’s commitment to Ukraine’s cause is unwavering, and she believes that it is essential for Europe’s security and stability.

Like many Lithuanians, Trimbel recalls where she was when Russia launched its full-on invasion of Ukraine on February 24, 2022. She had been abroad with her two daughters and was discussing whether they should return as signs of war mounted. Her youngest daughter’s comment about their cat being left behind was a poignant reminder of the personal costs of war. Trimbel’s own name, Viktorija, or Victory, seems apt for her relentless personality and determination to support Ukraine’s defense efforts.

Trimbel’s circle of friends is also characterized by their proactive approach to defense. Instead of socializing in traditional ways, they often meet at the shooting range. This sense of camaraderie and shared purpose is reflective of the broader mood in Lithuania, where volunteering initiatives have gained significant traction. The government-backed nonprofit Lithuanian Riflemen’s Union (LRU) is a notable example, with its activities extending beyond military training to include co-organizing the Fire Shield hackathon with Coinvest and other partners.

The LRU has also contributed to civilian response during the COVID-19 pandemic, as did Trimbel, who invested efforts into a helmet-based ventilation protection project. “COVID was a good rehearsal to mobilize society during times of threat,” she said. For Trimbel, the threat has now changed, but it is very much real, and she is determined to do her part in supporting Ukraine’s defense efforts.

While defense tech is a significant focus for Trimbel and Coinvest, they also care about other areas, such as portfolio startup Walk15, which is organizing a “Labrador walk” to encourage people to take more steps to be active. However, as Trimbel wrote in a recent LinkedIn post, “no other investment returns will matter if Ukraine will not receive sufficient support from allies and Europe will be invaded further.” Her name and personality suggest that she won’t relent in her efforts to prevent this outcome, and her commitment to defense innovation and investment will continue to drive her work.