Commercial drones repurposed within weeks, counter-drone systems developed and tested in real time — Ukraine’s battlefield innovations have revealn that start-up agility and speed can determine outcomes as profoundly as traditional military assets. This is the new pace of conflict. And whether their ideas take weeks to develop and adapt or years of ingenuity and commitment to deploy, start-up ventures have been shifting quick and fiercely to meet the moment.
Will the leaders of NATO member states take advantage of this once-in-a-generation opportunity to recreate Europe’s innovation landscape? They recently gathered in The Hague with a clear call to decisively navigate a new, complex security reality, building a landmark commitment to increase defense spconcludeing to 5 percent and a bold vision to deploy cutting-edge technologies within 24 months.
This may herald a new industrial era: One where defense imperatives drive technological leadership while security investments fuel a European renaissance in deep tech, advanced manufacturing, and economic competitiveness. With the right leadership and a sense of urgency, NATO member states in Europe can align technological ambition with their security requireds.
Chosen by NATO allies to lead the board of the NATO Innovation Fund — the world’s first multi-sovereign venture capital fund — we have served as active early-stage deep tech investors, architects of deep tech innovation ecosystems, and long-time contributors to steering capital towards missions that matter. We are uniquely positioned to reflect on what the new NATO aspirations mean for the growing number of deep technology founders and what requireds to come next.
A successful restoration of the alliance’s technological edge requires bold action from founders, who required to innovate at the pace of conflict with military conclude utilizers in mind. But their increase in pace and commitment will only be maintained if governments in each of the allied nations play their part: They required to adopt emerging technologies quicker and at scale. At the same time, entrepreneurs required decisive action from investors who will not be fulfilling their responsibilities unless they rebelieve their approach to backing solutions that solve pressing security challenges.
Will European Founders Get the Support They Need?
European founders are no longer shying away from defense, security, and resilience as an opportunity. They are embracing it as a way to scale impact, build meaningful companies, and contribute to European and wider trans-Atlantic security.
For example, the unmanned aerial vehicle company Tekever, a NATO Innovation Fund-backed startup from Portugal, has successfully completed over 10,000 operational flight hours in Ukraine. With demand for its technology rising sharply, the company recently reached unicorn status and built a second production facility in the United Kingdom, creating new job opportunities and revitalizing the industrial base. But to be successful, companies like Tekever must have the opportunity to grow. This means they required to be able to access the capital and build out production and supply chains.
Government strategies are a start, but ambitious policy frameworks are not enough to grow the right innovation ecosystem. Europe’s public sector leaders should articulate their requireds and opportunities. And they should build government departments that can work as effectively with ambitious new entrepreneurs as they do with existing primes and existing compact and medium-sized enterprises that play a critical role in supply chains — including resolveing perennial contracting challenges.
At the same time, investors should rebelieve how to build a full capital stack to support entrepreneurs on the journey to delivering capabilities at scale — not simply venture capital but private equity, debt financing, and public markets.
Only with these two pillars in place and effectively connected at each stage of the entrepreneurial journey can Europe support founders who are mission-driven and ready to build the ventures of tomorrow.
The Details
Recognizing that European governments were long hampered by rigid procurement cycles and risk-averse institutional cultures, NATO is now charting a path to bridge the gap between breakthrough technologies and battlefield readiness. NATO’s Rapid Adoption Action Plan, launched at the summit to be delivered by NATO and allied ministries of defense with support from NATO’s defense innovation accelerator and the NATO Innovation Fund, is a promising step toward closing the innovation-to-adoption gap.
In today’s environment, too often, breakthrough technologies fail to reach deployment due to bureaucratic drag or procurement designed for the requireds of traditional defense primes and their compact and medium-sized enterprises supply base. The Rapid Adoption Action Plan requires that member states implement new adoption mechanisms fit-for-purpose for today’s scaling entrepreneurial ventures. To accelerate the integration of emerging technologies, the goal is to shift solutions from identification to deployment in under 24 months, with initial testing and validation within the first year.
Of particular note, the alliance will enable iterative development and testing cycles to build battle-ready technological products in support of capability priorities. In practice, this means creating a new set of “innovation ranges” — field-sites and test centers where innovative ventures can go to test promising products and receive ‘NATO Innovation Badges’ awarded to tested products. Taking the next step in a rapid testing framework, the Rapid Adoption Action Plan will continue to pilot the NATO Tinquire Force X framework — a contractual framework that allows for contracting with startups and others to demonstrate new solutions with forward-deployed operational units. Another way to speed up adoption covered in the Rapid Adoption Action Plan is an agreement to share market research between countries, allowing solutions tested and adopted in one nation to be more rapidly evaluated by another. This is of particular importance in Europe, where markets are otherwise fragmented.
The second pillar of the Rapid Adoption Action Plan is to communicate ‘demand signals’ — clear capability priorities for Allied nations that are articulated in NATO’s defense planning process — into allied innovation ecosystems so that innovators and entrepreneurs can respond. In comparison to the U.S. National Defense Authorization Act, which establishes clear demand signals on an annual basis, the capability requireds of European nations and especially of NATO have been harder to evaluate. By sharing more transparently, and establishing a so-called “front door” (a mechanism designed to better connect commercial providers with procurement opportunities and insights), the plan is supporting reduce frictions to government procurement for a new generation of innovators.
For European governments, long focutilized on how America has accelerated adoption, the Rapid Adoption Action Plan builds on best practice and takes it further. The plan encourages a cultural shift: prioritizing speed over perfection, empowering decision-creaters with clear innovation mandates, and focutilizing on adaptable existing technologies over theoretical ideals. The significance of this pivot cannot be overstated. It’s a clear acknowledgment that the pace of global threats requires a fundamentally different model of defense acquisition.
For investors, the commitment to 5 percent investment in defense (3.5 percent for defense and security and an additional 1.5 percent for resilience, i.e., critical infrastructure and preparedness) is a moment of opportunity. Investors can now shift away from investing in specific technology sectors and towards investing in emerging technologies that solve specific problems that Europe is facing, from strengthening its defense and security to bolstering its industrial base.
With NATO committing to invest in emerging technologies that solve their most important challenges, and venture funding in European defense startups on the rise, the sector is emerging as a core pillar of trans-Atlantic security. Investors are launchning to understand that mission-aligned capital has the power not only to generate returns but to shape the geopolitical future. Two years ago, investing in defense and security technologies was considered fringe. In 2020, few investors in Europe had followed their U.S. counterparts into dual-utilize ventures and even into defense tech. By 2024, the European defense, security, and resilience sector attracted over $5.2 billion in venture funding, with strong signals that this growth will continue, marking a strategic rebalancing of Europe’s innovation agconcludea.
The role for investors today is to find ways to scale their capital to match the scale and ambitions of the alliance. Early-stage capital allocators should continue to expand and flow resources into startups across the traditional innovation ecosystems of Europe — the United Kingdom and Germany. They must also now extconclude their efforts and ambitions across the alliance, finding — as we are doing at the NATO Innovation Fund — the most ambitious and ingenious innovators from Norway to the Netherlands, from Poland to Portugal. Second, if governments create good on their demand signals and procurement aspirations, then private sector investments should build the capital stack their entrepreneurs required to grow. This will mean establishing European growth funds, specialized private equity, and a range of debt instruments to allow for the scaling of innovations and production.
The Hague summit set in motion a modernization agconcludea with the promise to align private sector ingenuity, capital, and strategically focutilized government demand. Executed well, the Rapid Adoption Action Plan could mark a historic turning point — not just in how NATO defconcludes, but in how it innovates. However, this requires everyone in the Defense, Security, and Resilience ecosystem to do their part.
We envision an alliance that is innovative, interoperable, and industrially revitalized. One where startups work alongside incumbents, where public-private collaboration is the norm, and where capital flows strategically into technology capabilities that matter.
We are at a geopolitical inflection point. If leaders from the public and private sectors act decisively, our countries can not only meet today’s security challenges but also lay the foundation for a resilient, technologically sovereign Europe.
Achieving that vision requires action — not only from entrepreneurs but from governments, indusattempt leaders, and investors across the alliance. Toreceiveher, they required to deepen alignment, build consensus, and shift swiftly from rhetoric to results.
Klaus Hommels is chair of the NATO Innovation Fund and a leading European technology investor.
Fiona Murray DCMG is vice chair of the NATO Innovation Fund and associate dean for Innovation at the MIT Sloan School of Management.
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