The Innovation Fund was launched in 2022, after the Russia-Ukraine conflict broke out. It is a program that connects buyers, usually member states’ governments, with startups (sellers) to develop defense technology.

The first companies to receive investment are European companies including: Germany's ARX Robotics - a company specializing in designing unmanned robots and 3 other UK startups (chip maker Fractile, iComat and Space Forge specializing in manufacturing new space materials).

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NATO strengthens public-private cooperation in defense technology application. Photo: Yahoo News

The fund also invested in four venture capital funds focused on deep technology, including: Join Capital, Vsquared Ventures, OTB Ventures and Alpine Space Ventures. Unlike most other venture capital funds with a maximum investment period of about 10 years, NATO will invest for up to 15 years.

NATO said the investments in the technology hubs are aimed at boosting the Alliance's technological sovereignty.

NATO’s main challenge is to close the gap with innovative companies, the bloc’s representative said in 2022, because the military does not always have the latest defense technologies, while private companies do not understand what the military needs. In addition, defense organizations and governments generally do not have a fast-track procurement process.

The NATO Renewal Fund is supported by 24 of the 32 member states of the military alliance, with the United States, Canada and France among the members that have not agreed to support it.

Since 2019, NATO has made space a priority area with its Space Policy and considered it a new operational front alongside air, sea, land and cyberspace.

“Innovation changes the nature of warfare and you need to adapt both as a defender and an attacker,” said David van Wheel, NATO assistant secretary general.

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