June 7, 2023

Exclusive: EIF to set up a €200m fund for European defence tech

A leaked document lays out the EU's response to NATO's €1bn fund

The European Investment Fund (EIF) is set to launch a €200m defence and security fund, Sifted understands.

European investors have traditionally been reluctant to invest in defence and dual-use technologies — it’s often been considered unethical to back startups that produce weapons or battlefield tools (dual-use technology refers to companies with both military and civilian applications). 

But the outbreak of the war in Ukraine has made both VCs and founders more interested in the sector, and a handful of companies have raised serious money in the last 18 months. 


NATO has already announced a €1bn equity fund, due to fully launch in July, for both startups and VCs working on defence and dual-use solutions. But the EIF’s initiative, which is to be dubbed the Defence Equity Facility, will be the first of its kind to cover all EU countries and be backed with the EU money. Turkey and the UK are involved in the NATO fund.

The initiative “will support private equity and venture capital funds which target investments in defence and security technologies having dual-use applications. The EIF is expected to commit €200m to such funds,” according to a letter from the European Commission’s defence division sent on May 15 to fund managers and seen by Sifted. 

The fund is likely to be announced at an investor workshop and defence startups pitch session in Brussels on June 29.

The EIF was asked for comment. The commission said it wouldn't comment on leaked documents.

Zosia Wanat

Zosia Wanat is a senior reporter at Sifted. She covers the CEE region and policy. Follow her on X and LinkedIn

Eleanor Warnock

Eleanor Warnock was Sifted’s deputy editor and cohost of Startup Europe — The Sifted Podcast. Find her on X and LinkedIn