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Europe expands defence funding with focus on dual-use technologies

The European Innovation Council (EIC) has announced an expansion of its investment programme to include defence and dual-use technologies, following changes approved by the European Commission as part of the Defence Mini-Omnibus initiative

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Europe is directing fresh capital into the defence sector through its funding instruments, placing defence technology and innovation in critical security areas at the center of its policy agenda.

The European Innovation Council (EIC) has announced an expansion of its investment programme to include defence and dual-use technologies, following changes approved by the European Commission as part of the Defence Mini-Omnibus initiative. The move marks a strategic shift in Europe’s innovation policy and opens the door for direct equity investments in defence companies for the first time under an EU funding programme.

With a budget of 10 billion euros, the EIC is one of the European Union’s main mechanisms for supporting innovation and startups. Part of these funds is expected to be directed toward defence innovation and critical security technologies.

Defence and dual-use technologies are becoming increasingly important areas for European startups and scale-ups, and support for defence innovation is expected to continue beyond 2026, positioning the EIC as a key funding vehicle for the emerging European defence technology sector.

Under the revised framework, the EIC Accelerator and STEP Scale Up programmes will support companies developing dual-use technologies.

Startups and small and medium-sized enterprises working on technologies with both civilian and defence applications—including artificial intelligence, quantum technologies, advanced materials and robotics—will be eligible for grants of up to 2.5 million euros and equity investments of up to 30 million euros.

At the same time, the EIC has launched a new 100 million euro call under the EIC STEP Defence Scale Up initiative. Companies can receive up to 30 million euros in direct equity financing to accelerate industrial capabilities in areas such as air and missile defence, drones and counter-drone systems, as well as other critical defence technologies.

The EIC will also participate in larger financing rounds typically ranging from 50 million euros to 150 million euros or more, with total round sizes expected to be at least three to five times larger than the EIC’s requested investment.

Applications will be accepted from June 30 through Oct. 28, 2026, with results expected in early 2027.

“The European Innovation Council was created to take risks, and we must take risks when it comes to developing European technologies that keep us safe,” said European Commissioner for Startups, Research and Innovation Ekaterina Zaharieva.

“We need to invest in critical technologies to ensure Europe’s strategic autonomy, whether in drones, cyber defence or quantum technologies. This will support Europe’s technological leadership and innovation for decades to come,” she added.

Zaharieva said the initiative responds to an urgent need to strengthen Europe’s security and technological sovereignty. The war in Ukraine has exposed critical capability gaps and Europe’s dependence on technologies developed outside the European Union, while fragmented investment patterns continue to constrain the growth of innovative defence companies.

By addressing this market failure, the expansion of the EIC into defence is expected to help scale strategic technologies and strengthen Europe’s defence industrial base.

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