E585 | EUVC Summit 2025 | Sebastian von Ribbentrop, Join Capital: The Path to European Resilience

0:00Today's defense is fast, cheap, smart, and built like a startup. The battlefield has shifted to software, networks, and asymmetric advantage. Europe's reliance on US tech is being challenged by homegrown innovation. That's where JOIN and Sebastian von Rittentrop come in. They invest not in N systems, but in the infrastructure behind them. Tech with fewer export issues, faster commercialization, and more upside. For early stage funds, this isn't about missiles. It's about margin. Most VCs aren't ready. JOIN is. So I'm going to be sharing some of the knowledge that JOIN has gained over the last year and a half, two years in the journey and the evolution into defense tech.

0:54join capital. Our background, we sit in sort of what I see the axis, which is in the UK, Berlin, and Italy, something you will find out and listen and hear today from me, that it's actually quite important in regards to European sovereignty. OK, so what I'm going to talk to you about is, what is the opportunity in defense? Maybe a little bit of background to this theater here. We had three very good launches. The first launch at Join was in 2017, where Eisenhower Capital cornerstoned our first close, which allowed us to start in our journey, which was coming out of what the CeBIT coined as Industry 4.0.

1:53and we started in Berlin and we saw that a lot of engineers in Europe were going into the enterprise space on their own and not going anymore to the Siemens, the Aramis, BA systems and they weren't really getting funded at that time and so we thought that was a good opportunity for JOIN to come in and to help support them. JOIN has 148 LPs, that's why we also need a good administrator. Most of Those LPs, so 90 % of them, come from the European Mittelstand. So these are actually multinational companies with multi-billion euro in sales, but are still in towns you probably could not pronounce the names, Kaaksel, Brauchsen, or Bochum.

2:44And some are even in France and in Italy. But they're all national champions and global champions and not really known. So our mission at JOIN is to help engineers find the product market fit. So we help them do their first POCs and have done that actually quite successfully. The second launch was in July 2023 when the NATO Innovation Fund was introduced to me and decided to put their largest ticket into our JOIN Fund 2, which opened up a whole new world. So even VCs, we evolve, we learn. And there I learned very quickly that the manufacturing industrialization in regards to defense was changing.

3:34And I went to Washington to the 75th anniversary of NATO and was actually pleasantly surprised that the U.S. was also very far behind. The DIU, the Defense Innovation Unit, is extremely slow process with the Pentagon, similar to the BWI in Koblenz, Germany, which does the entire procurement for the German military, and that we weren't so far behind in defense tech. So I saw actually a quite interesting opportunity, and dug deeper, dug deeper, built out the team, and it basically, Basically, an example here is the F-35. You've all read about in the paper the kill switch, but that's not the interesting part.

4:19You probably don't really know what the opportunity is in defense, and I'll try to share that with you today. But if you look at the F-35, there are three versions, A, B, and C. A lot of the components are built in Europe, in Italy, in UK, in Norway, in Germany. So it's not an American machine. It's built globally. Now, that is the old way of doing it. You have these sort of primes, as they call them, that get billion dollars from governments and build the systems. But if you look at the U.S. in the last 30 years, where the government was 80 % of this, that has shifted to almost below 3%, where the private markets have taken over.

5:13And the opportunity in Europe is not to build platforms and compete with a large U.S. market, but in the components, in building the best components to deliver to global platforms.

5:32due to the unforeseeable circumstances that started, of course, in 2022. And we were in the Ukraine now a few times. We work very closely with D3 in the Ukraine. The entire supply chain and manufacturing has changed incredibly. It is quick, it is targeted, and you can put together very smart solutions. So we're, I think, in a paradigm shift right now for European technologies that will go 10 years plus, where you're looking at innovation that can be done very efficiently, can scale globally. Because with component manufacturing, you don't have, and I'm sure you've all read in the paper, a term called dual use.

6:31Now, dual use is an export restriction like ETAR in the United States, where governments can prohibit the sale of certain products. But with components, it's much easier than with a platform product like a drone or a tank. Another note is that European have 43 tanks, 43 different produced tanks. The U.S. has one, the Abraham. It just shows you also the market opportunity in that regards. You also have vast spending. So Ursula von der Leyen disclosed that they want to invest$200 billion into defense and infrastructure. Maatz, who held his first speech today as a new chancellor, disclosed that they want to invest$500 billion.

7:23Of course, we know that Trump wants to put$500 billion in the next five years alone and Stargate, but it's a start. So you're seeing a massive offset program where companies can access revenues. And it's not to fund opportunities, it's to give them revenues to build products. So it's an environment that is moving extremely quickly. I mean, every day, there is a new engineer coming to us with a new product, and they're going to be based all over Europe. And this is why I also think Europe has a huge advantage, is that you basically have Georgetown published this in 2020, a bit old, but you have 3.5 million STEM graduates globally from China.

8:12You have 2.5 billion from India, but you have 1.1 billion from Europe. And the U.S. is at$800 ,000. So you have the two most important factors. You have human capital and ingenuity and the market to be able to help. The technology advantage where I would think every VC dreams of is in the asymmetry or the, let's say, asymmetric advantage in regards to the paradigm shift in the market. And we've heard it today. DARPA was invented in the Sputnik moment 65 years ago, where suddenly the Russians were able to shoot a satellite up into space and founded DARPA. And probably a lot of people aren't aware, DARPA, despite being put through Doge right now and everyone's getting kicked out and replaced, but they are spending$4 billion a year on their DARPA challenges.

9:12and what they do is they put together these SWAT teams that have four years time to solve one of these challenges. Just to give you a bit of background of the challenges, R-M-R-N-A, so Moderna, was a DARPA challenge. GPS, and that's a lovely story. I sat down with Admiral McRaven back in New York in October. He wrote a book on How to Make Your Bed, and I think anyone with children understand that making your bed is something you can achieve. He got this 25-kilo backpack. He was head of the Navy SEALs. He also managed to capture and kill Osama bin Laden, but he got this huge backpack on his back, and he was told, this is going to tell you exactly where you are.

10:02And he goes, I don't need to know where I am. I have a compass. I have the stars. I have the sun. I know exactly where I am any time of the day and at night, and it was GPS. So it shows you that even the military in the field don't understand what can technology do or not. But what's clear is, from time and time again, history has proved, especially in Europe, that we have urgency to act. One of the key important, and maybe I'll jump this because I'm looking at the seconds, but But something that just happened just only last week is, I'm sure you've read, the situation between Pakistan and India.

10:45And this is an extremely interesting aspect because the Pakistani military was able to shoot down five Dassault Rafale jets over Indian airspace. And now, this is not disclosed in most of the press. And the reason for that is they were using a very efficient, inexpensive, and smart radar system for early detection and the new J-10 Chinese fighter jets. and they shot down these five without them even entering the Pakistani airspace. And it just shows you the change in technology. It's happening so quickly that Europe has to catch up, but it has the opportunity to do so. And the geopolitical developments are also not making it much easier.

11:42But what Henry Kissinger said is that geopolitics is 100 % personal. It's pure personal. And therefore, I think that Europe should make themselves aware, take the responsibility, which is happening. But we are seeing a lot of huge opportunities to be investing in the sector over time. Thank you very much. Before you go, I just want to give a massive shout out to the partners who made the EUVC Summit and awards possible. So please do not tune out. We're partnering with these firms because they're great people with offerings that we know from our friends in the ecosystem are truly world class. First up, I want to give a big thanks to HSBC Innovation Banking.

12:26They helped us incept the awards in the very beginning. And truly, they are the leading bank for anyone in European venture. There's a reason why everyone knows them. Google Cloud, they were our venue hosted the summit. What a team, what a big effort they put on to help us. We're hugely grateful. Make sure to reach out to Arabella or Oksana at the Google Cloud team to hear how they can help you as well as your portfolio. Massive credits goes to them. Ace Alternatives, we have so many friends in the Berlin ecosystem partnered with these guys. Just the best fund ops team around. And as with any good restaurant, where the locals are is also where you get the best service.

13:06And now they're expanding across Europe, so they're definitely someone to talk to. Hainspoon, they're longtime partners of ours in both our own legal work. They're great supporters of us here at EUEC, and I definitely think that they are one of the go-to legal teams to have in your corner. CW Communications, our dear friends who helped us secure CNBC, Bloomberg, Financial Times, and many more for this summer. It's a joy working with Dan and Kathy and the team. the Fundcraft, Digital Native, Full Suite, Lux Headquarter, and a great partner as you grow your firm out of Luxembourg. Definitely a fund admin to consider in your stack.

13:42I can only say that the team are incredible to work with. I'm very thankful that I've gotten to know them. I think they're one of the up and coming fund admins that you want to be thinking about. Portfolio IQ by Synaptic. You may know them for the Discover tool, which is branded under Synaptic, But PortfolioIQ is absolutely a product you should know because there's no one that understands intelligence better than this team. And finally, Goodwin. They are a truly world-class legal partner you can trust. They're hands-on, business-oriented, and expert in everything and anything transatlantic. So those were our partners for the summit and awards.

14:19I know this might have been a bit long and boring, but really, if you have these guys on your side, I don't think your firm could be in any better hands. and also they're helping us do what we're doing every day for you.