July 3, 2024

EIF and NATO Innovation Fund join forces to unlock private capital for Europe’s defence and security future

  • European Investment Fund and the NATO Innovation Fund, a venture capital fund backed by 24 North Atlantic Treaty Organization nations, enter partnership.
  • Memorandum of Understanding signed in Brussels sets terms of closer collaboration.
  • Goal is to expand funding for start-ups, SMEs and midcaps in defence, security, and resilience sectors.

The European Investment Fund (EIF) and the NATO Innovation Fund (NIF) signed a Memorandum of Understanding (MoU) to cooperate in supporting the long-term growth of the defence, security, and resilience sectors across Europe. The EIF is part of the European Investment Bank (EIB) Group and the NIF is a standalone venture-capital fund backed by 24 NATO countries.

The MoU aims to encourage more private-capital funds to become active investors in technology sectors associated with defence and security, enabling EU companies to raise equity funding from a broader range of sources. The partnership reflects the shared interest of the NIF and EIF in establishing a framework to support start-ups, small and medium-sized enterprises (SMEs) and midcaps, as well as in enhancing the whole ecosystem by involving all the main stakeholders.

“By facilitating regular dialogue and knowledge sharing, the EIF and NIF will ensure a cohesive approach to strengthening the investment ecosystem for defence, security and resilience. This will benefit SMEs, midcaps, and the broader European innovation landscape.”

Marjut Falkstedt

Chief Executive, EIF

The MoU also outlines plans for EIF-NIF cooperation on ad-hoc activities to share knowledge and raise awareness about the potential of investments in defence and security. This will help foster a comprehensive investment ecosystem, ensure effective outreach to private-capital funds, support companies in their investment plans and raise awareness of the investment opportunities in the defence, security, and resilience sectors among limited partners.

The collaboration with the NIF also is in line with the EIB Group’s Security and Defence Action Plan, which is expected to support the effort primarily through the EIB’s venture-debt product designed to address the funding needs of innovative companies, and which may complement EIF and NIF venture capital and private-equity funding in some cases. The signatories will also exchange information with the European Commission in areas where its potential involvement may prove beneficial for the purposes of the MoU.

“There is great momentum in deep tech that is propelling innovations to help strengthen European defence, security and resilience. We are excited to be collaborating with the EIF, the EIB Group and the Commission to unlock investment opportunities for European businesses, advance capacity building for dual-use innovation, and share best practices across investors, innovators and government.”

Andrea Traversone

Managing Partner, NATO Innovation Fund

The collaboration between EIF and NIF will also focus on the design of new financial products to cater for companies’ needs. The strategic alliance between the EIF and NIF represents a significant step forward in strengthening Europe’s defence and security capabilities, unlocking new avenues for private investment, and driving innovation in these vital sectors.

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