Europe’s most active LP, the European Investment Fund (EIF), is looking into creating a “more ambitious” defence investing programme as it doubles down on backing pure military investments.
EIF CEO Marjut Falkstedt wrote on LinkedIn last week that the EIF plans to “boost the investment capacity … for defence tech and cybersecurity further because it is necessary.”
She added that the “EIF and the market has moved on as regards to defence tech. Dual-use is an old term, we may invest in single-use, i.e. military equipment and applications.”
The EIF has made eight defence fund investments to date, since changing its stance regarding the once-taboo sector in 2024. Recipients include Dutch VC Keen Venture Partners’s debut defence tech fund — the EIF’s first cheque into the sector — along with defence-focused private credit fund Sienna Hephaistos Private Investments and aerospace and defence fund Nazca.
Europe goes all in on defence
Last March, the European Investment Bank (EIB), the parent organisation of the EIF, approved a €8.9bn pot of money to finance investments in security, defence and critical raw materials. On Thursday, the EIB said it has “significantly expanded” the scope of its activities in defence and military projects, and EIB group president Nadia Calviño told reporters that the bank invests in “pure” military investments.
While the bank’s investments into defence have quadrupled to over €4bn, or nearly 5% of the EIB’s European financing, Calviño added that the EIB is “not a defence ministry”.
The EIF confirmed to Sifted that it still will not back weapons or ammunition.
The move towards unambiguous military tech mirrors that of many European VCs. Project A, a generalist investor, has invested in strike drones startup Stark and is raising a new small defence fund, Sifted understands. Other investors like SmartCap, an Estonian state-backed LP, have an even stronger focus on defence: SmartCap will not invest in VC funds that are unable to back weapons.
So far in 2026, geopolitical tensions have only continued to escalate, most recently with US president Donald Trump’s plan to annex Greenland — pushing leaders on the continent to focus even more on boosting sovereignty and security.
