Estonia invests nearly 30 million euros in NATO’s billion-euro Innovation Fund
Through SmartCap, the state is to invest 30 million euros in the NATO Innovation Fund, the purpose of which is to support deep tech start-ups that have both civil and military use by creating additional growth opportunities and new solutions.
The investment is a part of the one-billion-euro Innovation Fund the establishment of which was agreed upon by 22 countries at the NATO summit in June.
“In today’s security situation, which has changed beyond recognition in less than a year, the need for innovative technologies in the field of defense is clearer than ever before. I am convinced that the Estonian start-up sector has a high potential to contribute to the common security architecture of the West but considering the traditional closed nature of the defense market and barriers to entry, the initiative of the state is also of decisive importance here,” said Minister of Entrepreneurship and Information Technology Kristjan Järvan.
The goal of the NATO Innovation Fund is to maintain and strengthen the technological advantage of the members of the North Atlantic Alliance. Today, it is difficult to find money on the market for the development of deep tech for the defense industry, because there is no willingness to provide the so-called “patient” long-term capital necessary for the development of investment-intensive deep technologies. It is especially difficult for companies whose client is a state, which is often a given in the security and defense industry, since in most cases states are not ready to buy prototypes, but rather want ready-made solutions that work.
“SmartCap has years of experience in promoting financing opportunities for the Estonian start-up sector, and our portfolio now includes several Estonian start-ups that have gained global recognition. Our goal is to improve the availability of capital for early-stage start-up companies with the support of public money. Availability of capital is also of critical importance in the development of new products and services intended for both normal use and the field of defense,” said Sille Pettai, member of the board and fund manager of the Estonian state-owned venture capital fund SmartCap.