NATO venture capital fund makes first investments to boost defense tech - Semafor

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Established last year, the NATO Innovation Fund is the world’s first multi-sovereign venture capital fund, backed by 24 of the 32 alliance’s member states. While it has restrictions on investing in weapons technology directly, it invests in emerging technologies that the alliance hopes will strengthen its defense and resilience down the road.

The fund will aim to leverage its ties within the alliance to help support their investments. “For the most part, early stage companies are completely overwhelmed and have no idea how to engage [government and defense] organizations,” O’Connor said. “We’re uniquely positioned to help our portfolio companies through that growth and through that partnership between commercial and government organizations.”

NIF will also seek to make sure that Western deep tech startups are able to grow without having to look to Beijing for funding, a NATO official said last year, noting that the lack of European venture capital meant startups had been forced to turn elsewhere. “When European deep tech startups reach growth stage, more than half of them are predominantly owned by entities outside of Europe,” Kelly Chen, a partner at the fund said. “That’s certainly a dynamic that we’re battling.”

Giedrimas Jeglinskas, a former NATO Assistant Secretary General, told Semafor that the success of the fund would ultimately be determined by whether its investments “find their way into the defense capabilities of allies.” “That’s probably a 10-year horizon,” Jeglinskas said, adding that “it’s on track to do that.”

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