Shaping the future of defence with NATO

In early summer 2022, the NATO Innovation Fund, the world’s first multi-sovereign venture capital fund, was officially launched. With a budget of €1 billion, it is designed to invest in early-stage startups and other venture capital funds developing emerging dual-use technologies that are strategic priorities for NATO. These include artificial intelligence, big data, quantum technologies, biotechnology, advanced materials, energy and space.

This fund complements the Defence Innovation Accelerator for the North Atlantic (DIANA), which supports the development and adaptation of emerging strategic dual-use technologies to address critical security and defence challenges.

DIANA has two regional offices – in London (UK) and Halifax (Canada) – as well as a regional hub in Tallinn (Estonia). It is composed of 17 acceleration sites and 182 test centres around the world.

Since 2024, a selection of innovation facilities in Luxembourg has also joined the network.

“We base our mission on the RAPIDO (Readiness and Adoption Pathway for Innovation in Defence-Oriented Use) model, which is a dual-use, measurable and evidence-based innovation framework,” explains Adam Painter, Senior Business Advisor within the DIANA network.

Startups hosted in one of DIANA’s accelerators show an average turnover growth of 73%, and more than a thousand connections have been facilitated between innovators and key ecosystem players, including investors, governments and end users.

Acting fast and acting well

“In three years, more than 120 startups have been accelerated, which represents a very high level of activity in a short period,” noted Nikos Loutas, NATO’s Director of Innovation, at the last Luxembourg Venture Days. He highlighted the “significant funding” secured in recent years. “The role of venture capitalists is more important than ever, and it is vital to ensure everyone has equal opportunities and companies have access to sufficient capital.

“In this context, acting quickly and effectively is one of the keys to project success. We need to bridge the gap between technologies and product life cycles.”

The role of venture capitalists is more important than ever. Nikos Loutas, NATO

In addition to its €1 billion financial capacity, the NATO Innovation Fund benefits from the backing of 24 NATO member states and key European Union institutions such as the European Investment Bank and its venture arm, the European Investment Fund. This strong foundation enables it to support promising strategic technologies and to strengthen market capacity through ecosystem building.

Focus on deeptech

The fund also relies on the expertise of dedicated industry specialists. “We are focusing in particular on deep tech. It is essential that investors understand what we are talking about. This is why significant information and awareness-raising efforts are needed,” says Sander Verbrugge, Partner at the NATO Innovation Fund.

Among these deeptech ventures, Aquark Technologies is a pioneer in NATO’s financing mechanism. This spin-off from the University of Southampton, specialising in the production of components for quantum technologies, was the first company hosted by DIANA to receive financial support from the NATO Innovation Fund. In September 2024, it secured €5 million from the fund, alongside private investors.

The company has developed a highly efficient cold-atom trap without a magnetic field, reducing the size, weight, energy consumption and cost of sensors. This mobile and robust technology can be deployed in remote and challenging environments, including underwater and in the air.

“The fields of application are vast – we discover new ones every day,” says Alex Jantzen, Co-founder and COO of Aquark Technologies. “Most of them help protect the critical infrastructure that underpins the security of businesses and nations.”