Big investor warns Europe relies too much on SpaceX

One of Europe’s most prominent venture capitalists has warned that the continent is dangerously overdependent on SpaceX for both defense and space infrastructure, according to the Financial Times.

Bernard Liautaud, managing partner at Balderton Capital, said European governments are too tied to the United States when it comes to satellite launches and communications.

He argued that “a growing part of military supremacy will be fought in space,” but right now Europe is at a disadvantage. “We need to be more self-sufficient,” Bernard said, adding that reliance on Elon Musk’s company poses “a huge risk.”

Bernard’s comments come as defense-related tech funding in Europe has surged. Following Russia’s invasion of Ukraine, NATO countries increased their defense budgets, and that wave of money helped create dozens of new start-ups.

Many of these firms are developing drones, battlefield software, and advanced defense tools. But Bernard stressed that none of this solves Europe’s weak position in space. He pointed to the dominance of SpaceX as proof of Europe’s vulnerability.

Balderton directs money into European defense start-ups

Balderton Capital, originally founded 25 years ago as an offshoot of U.S. venture firm Benchmark before going fully independent in 2007, has long invested in European technology. It has backed more than 250 start-ups, including Revolut, Wayve, and Dream Games.

In recent years the firm has started channeling money into what it calls “sovereign” bets, projects designed to boost Europe’s independence. Those include Proxima Fusion, a nuclear fusion company, and Quantum Systems, a drone manufacturer.

Last year Balderton co-led a $160 million round for The Exploration Company, a Franco-German start-up.That investment was done with Plural, another venture group.

The Exploration Company is working on several projects: a capsule that can transport cargo to the International Space Station, a rocket, and a lunar lander. Bernard pointed to this deal as an example of how venture money can support space independence, but he emphasized that Europe’s current capacity is still nowhere near enough.

At the same time, Europe’s defense ecosystem is maturing. The fact that start-ups are increasingly included in government defense procurement programs shows a shift in how the region works with private firms. This is a major change compared to the past.

European players face tough rivals in U.S. space race

The head of The Exploration Company, Hélène Huby, a former Airbus executive, said at Italian Tech Week that Europe has not built up enough strength in space. “We are quite weak right now in Europe regarding this space-based infrastructure,” she said.

Hélène added that space represents a huge market because of demand from telecommunications, earth imaging, and defense, but she admitted that European companies lag behind.

The challenge is obvious. SpaceX, now valued at around $400 billion, is the most dominant player in global launches and satellites. And Jeff Bezos’s Blue Origin, another well-funded U.S. firm, is also a competitor. That leaves European groups facing an uphill climb with fewer resources and smaller ecosystems to rely on.

Inside the venture capital world, not every partner is as cautious. Suranga Chandratillake, another Balderton executive, explained that investing in defense companies requires a different view of risk compared to consumer tech.

“Even in a venture capital industry where the majority of tech start-ups are expected to fail, backing defense and related companies requires a different attitude to risk,” Suranga said.

But he also noted that things have changed dramatically. “Twenty-five years ago, in trying to solve these problems, one of the last things that Europe would have done would have been to turn to start-ups,” Suranga said. “Today that is a key ingredient of what the solution looks like.”

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