The European Investment Fund (EIF) is set to invest €40 million in defence technology companies through a venture capital fund, according to Euractiv.
The investment, announced on Thursday, will support defence-focused startups through the Keen Venture Partners European Defence and Security Technology Fund. Previously, EIF, part of the European Investment Bank (EIB) Group, avoided the defence industry by backing smaller European companies.
The EIF earlier announced an investment of €175 million in so-called “dual use” innovations. These are technologies that can have both civilian and military applications. According to an EIF press release, a further investment of €40 million in the Keen Venture Partners fund aims to support start-ups that are “pioneering solutions” in the “defence and security technology sector.”
The press release says the fund will invest in companies operating in the EU, as well as in the UK, Turkey and Norway. These could include firms working in cybersecurity, robotics, artificial intelligence, autonomous systems and space technology. Meanwhile, manufacturers of lethal weapons remain off-limits.
EU leaders are seeking to develop Europe’s defence sector amid a full-scale war between Russia and Ukraine that has raised fears of further military escalation.
Shares in many European defence companies rose following the announcement. However, executives have long complained that military equipment firms face tougher terms and discrimination when trying to secure money from banks and other financial institutions.
