European Investment Fund commits major funding to defence startups

The European Investment Fund (EIF), an arm of the EU, will invest EUR50 million to provide private capital for companies in the defence, security and space sectors. 

Announced on 4 March by the authority at the European Investment Bank Group Forum in Luxembourg, EIF’s commitment will be channelled into a fund run by Join Capital – a Berlin-based venture capital company specialising in deep-tech.  

Known as ‘Fund III’, the mechanism aims to raise EUR235 million to back 25 early-stage deep-tech dual-use startups in Europe.  

The EIF commitment comes from the InvestEU Defence Equity Facility, a EUR175 million initiative over a four-year period co-financed by EIF and the European Defence Fund (EDF) to mobilise private capital into Europe’s defence ecosystem. 

"This investment is not only funding. The EIF credibility also acts as a seal of approval signalling to other investors the relevance of the aerospace and security and defence sector," EIF CEO Marjut Falkstedt said. 

Join Capital has invested in several early-stage defence companies across the continent, including Optics11 (Netherlands), Quadsat (Denmark), Kreios Space (Spain), Quantum Optics Jena (Germany) and 2D Photonics (Italy). 

The Defence Equity Facility is also a component of the EU Defence Innovation Scheme, which leverages EDF resources to provide targeted support for startups, scale-ups and small companies. 

Join Capital has offices in Berlin, London, and Milan and has received investment from the NATO Innovation Fund. 

The EU has announced several initiatives designed to assist SMEs recently. In February the EDF called on small companies to get involved with its MaJoR programme and it launched 10 call for proposals to industry, with EUR1.1 billion available.