Big news in European defence tech investment. Sille Pettai, the CEO of SmartCap — the Estonian state-owned investment fund — has announced she will step down at the end of June this year after nearly a decade with the organisation.
Pettai made the announcement on LinkedIn today, saying she wanted to leave before a ‘crash and burn’ situation. She has not disclosed what she plans to do next, and SmartCap has not commented on succession.
SmartCap is no ordinary state-backed investment fund.
The firm has been a key player in Estonia’s bid to build a stronger technology ecosystem to drive its economy, but it has also played a pretty central role in nurturing defence technology, both on home turf and more widely in Europe, as a direct investor and an investor in a variety of other funds.
These days, thanks to the shifts of geopolitics, the pool of investors willing to back defence tech — and the money they have to work with — seems to grow by the hour. But that was far from true especially before 2022, so SmartCap’s early endorsement was critical for getting companies and projects off the ground, and adding more credibility to the effort. Pettai steered the organisation through all that, including launching a separate fund in January 2025 just for defence tech.
“It has been such a ride,” she wrote, “building a VC fund from €25 million to €500 million, from two people to almost 20 people and from 1 fund to 3 while promoting Estonian tech and exploring what state ventures could be like. It can be bold.”
In the largely male-dominated world of finance and investment, Pettai started her career at Hansa Investment Funds. She then transitioned to Swedbank after it took over Hansa. She began in high-yield private debt and crisis-era portfolio risk management and then moved to low-risk asset management. After ten years, she moved to SmartCap.
Pettai spoke in defence of state funds, and how they should not be painted with the same brush, in an interview with Resilience Media last year.
She said she was actually on maternity leave when she was tapped to join SmartCap. It was reorganising at the time, to bring in a fund-of-funds model, “and there were not that many people in Estonia that could make fund investments. They invited me to help with the reorganisation.”
But although he went there for a temporary assignment, “I realised that it’s much faster, despite the fact that this is state-backed fund,” she said. “It’s so much faster, so edgy. We’re actually building things, creating things. You can see development. You can see growth.”
She added that the shift between how SmartCap operates now and how it did at first, and how many other state funds work, is like going “from tanker to speed boat.” She never retured to Swedbank.
But Pettai would also be the first to say that the effort is far from complete.
“Defence could rise in Europe,” Pettai noted on stage at Resilience Conference last autumn. But it needs more than just money, she added. It needs “first believers… diversifying the capital supply.”
Among her other big wins, in addition to being one of the driving forces behind SmartCap’s Defence Fund, Pettai led its LP investment into Darkstar, which holds the distinction of being Europe’s first dedicated defence tech fund; it’s also an LP in Plural, another major VC backing defence and resilience technology. SmartCap’s direct investments include participating in Farsight Vision’s €7.2 million Seed round and Frankenburg Technologies’ €30 million Series A.
We have reached out to Pettiai for comment and will update this story as we learn more.
