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Defence sector innovation: NATO to invest €1B in startups

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NATO, the intergovernmental defence alliance between 30 European and North American countries, launches a €1B fund and an accelerator targeting deeptech startups in the defence sector. The goal is to leverage the innovation capabilities of startups to develop the next generation of war machines. Part of NATO 2030, the move follows a period of concern for Alliance leaders regarding China’s increased reliance on tech for its military strategy.

At the end of two virtual meetings in early June, Foreign and Defence ministers agreed on the need to reinforce the transatlantic defence partnership between Europe and North America amid intensifying global competition. We need to sharpen our technological edge (…) We see that new and disruptive technologies, such as autonomous systems, artificial intelligence, and big data are really changing the way our militaries are going to operate in the future,” NATO Secretary-General Jens Stoltenberg said.

The Defence Innovation Accelerator for the North Atlantic (DIANA) is to become the center point for countries in the alliance to coordinate and cooperate on developing new technologies. DIANA will add offices and test centers throughout Alliance countries. 

“The goal is to have DIANA reach initial operating capability (IOC) by 2023,” David van Weel, assistant secretary-general for emerging security challenges, added in a virtual roundtable with reporters, following the 31st annual summit on June 14 in Brussels.

Planning to stay ahead of the curve is particularly important, as China has been investing heavily in new technologies to strengthen its military power and fuel its ambition to become a leader in the use of AI. The defence accelerator is also a recognition from European and North American leaders of the prevalence of disruptive technologies – and a decision to harness their unique potential to strengthen common defence strategies. 

How startups benefit from NATO’s initiative

For startups, this will be an opportunity to work together with the government sector and academia towards accelerating the achievement of national security and transatlantic collaboration goals. “Sometimes a technology company may not realize that their product could be viable for the defence community,” David van Weel said. Startups will also benefit from entering a network of stakeholders that can help them develop and get funded.

DIANA will be supporting startups working on either of the seven key emerging and disruptive technologies (EDTs) that NATO deems critical for the future: AI, big-data processing, quantum-enabled tech, autonomy, biotechnology, hypersonics, and space.

The accelerator includes a trusted capital marketplace that will enable funding opportunities for companies by connecting them to pre-qualified investors. Additionally, startups will receive support through a venture capital fund. The NATO Innovation Fund has been set up to support companies developing dual-use and key tech that could serve the Alliance. The fund will be an opt-in for member countries and would be underwritten by about €70M per year. Van Weel added that NATO would be looking for a partner from the private sector to help run the daily business operations of the fund.

DIANA is unique to NATO’s innovation efforts in that it has been built with the needs of the startup community in mind. It specifically targets early-stage startups rather than larger companies and traditional defence firms, in order to harness their unique ability for innovation.

 

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Antoanela is an Innovation Reporter at The Recursive with a knack for sustainability and environment protection. She is on a mission to communicate and celebrate innovative ideas and solutions that improve our ability to thrive together on this planet.