The NATO Innovation Fund, a €1 billion vehicle backed by 24 NATO allies, was launched in 2023 to invest in deeptech technologies that strengthen the Alliance’s long-term security and resilience. Since then, it has built a 25-person team across London, Amsterdam, and Warsaw, and has invested in dozens of companies and VC funds, including Join Capital, OTB Ventures, and Faber.
In an interview with Vestbee, NIF Partner Patrick Schneider-Sikorsky shared more about how the fund operates, its critical priorities, and what lies ahead.
Patrick, let’s start with the NIF’s progress. What are the key milestones since the fund’s launch, and how has geopolitics affected its investment strategy?
We've built a team of around 25 people, established a presence in London, Amsterdam, and Warsaw, visited almost every country that’s part of our investment fund, seen thousands of deals, and invested in around 10 companies. Some, like ARX Robotics and Tekever, are already contributing to the efforts in Ukraine. We’ve also invested in multiple funds across different geographies and now have fund managers helping us build capacity in regions of European NATO where we’re not yet strongly present.
Geopolitics hasn’t changed the strategy — we were always set up to invest in emerging technologies that are critical to securing the Alliance’s future. This means investing in technologies that can make a real impact and be adopted by the governments that are backing the fund.
At the same time, we haven’t taken our eye off the ball when it comes to longer-term deeptech impact technologies. You have to prepare not just for the war of the next two or three years but also for a fight in 10, 15, or 20 years’ time. So it’s a balancing act between high-TRL [technology readiness levels — ed.] adoptable technologies and lower-TRL, long-term impact technologies that will also help defend and secure NATO.
Do you feel that NIF lacks Ukrainian experience or perspective?
I can't comment on NATO membership — as you know, NATO has an open-door policy for European nations. But in terms of how NIF is engaging with Ukraine, even though we can’t invest directly in Ukrainian startups at this stage, we do look at a lot of companies in the defence and dual-use tech space that are founded or co-founded by Ukrainian innovators.
Many of our portfolio companies have experience and exposure to Ukrainian innovators and warfighters. While Ukraine isn’t an LP in the fund, and we can’t invest in Ukrainian companies directly, we see it as a partner and collaborator.
Given that the fund operates at the intersection of security and innovation, I suppose traditional venture capital metrics like financial returns aren’t the primary focus. Does the fund use a different framework to measure success?
The most important measure of success is the fund’s impact. More specifically, it’s about adopting the technologies and products we support — especially those at the intersection of frontier tech, defence, and security. That’s our North Star.
Will these technologies be adopted by MoDs, national security agencies, or other government bodies? And will they be adopted across Europe and at scale? That’s a key metric for us. Of course, commercial success is tied to that. A company that grows and succeeds commercially is more likely to provide capabilities at scale and be a stronger partner. So the two — adoption and commercial success — are intertwined.
Looking ahead to NIF’s critical priorities, which regions or sectors are you prioritizing when seeking both fund managers and founders?
We have a fund of funds mandate that’s very focused on capacity building. We aim to back fund managers in regions where there’s currently a lack of deeptech, dual-use, or defence-focused venture capital — or fund managers who are highly specialized and bring something unique to the market. That might come from their experience, their focus, or their geographic reach. That’s how we look at the fund of funds side.
In terms of direct investments, it’s more about the capabilities the startups are developing and the impact they can have on defence, security and resilience. We have a very broad mandate when it comes to technology areas. In terms of shorter term adoption, we’re particularly interested in technologies or startups building strong products in autonomy, especially unmanned systems across land, sea, and air. Counter-UAS is also a key area, especially given what’s been happening in Ukraine.
That includes everything from sensors and sensor fusion to software platforms — essentially, anything that can intercept drones or support space communications. We’re also very interested in Earth observation technologies like visual, SAR, and infrared.
At the same time, we’re also looking at deeptech solutions that could be highly strategic. That includes anything that gives us a massive advantage over our strategic competitors — whether in computing, supply chain resilience, or energy security. Those areas are critical.
How does NIF help founders — particularly in deeptech and defence tech — overcome challenges like long procurement cycles and commercialization hurdles? How does that support work in practice?
We’ve hired a Chief Adoption Officer to drive the adoption of these technologies within the Ministries of Defence that have invested in the fund. This gives us the ability to understand some of the demand signals coming from the ministries, helping startups navigate that process. We’re also building adoption pathways for our portfolio companies, which should become smoother and faster over time.
Currently, as a result of NIF’s investments, we’ve been able to introduce portfolio companies to defence innovation agencies within NATO, which are connected to the governments that invest in the fund. This has led to some of them winning pilot contracts, being selected for testing, and starting to scale their relationships with governments.
It’s still early days, but our goal is to be able to share significant updates within the next year. What sets us apart is our established relationships, insights, and access to these demand signals. We believe this will lead to larger-scale adoption. However, there does need to be reform in procurement processes within Europe and NATO to improve this even further.
The DIANA program was also launched to facilitate these connections.
Exactly. We work closely with DIANA, whose mission is very close to NIF’s — building the defence and dual-use ecosystem. DIANA also has a presence in North America, helping to build a transatlantic ecosystem. The key difference between NIF and DIANA is that we take equity in companies, while they provide non-dilutive funding. But we share the goal of driving adoption of innovative emerging technologies across the Alliance.
For startups, it depends on where you are in your development. If you’re in the very early stages, you could apply to a DIANA program. If you're more advanced, you might apply for NIF funding — or both.
What qualities or expertise are essential for GPs seeking to collaborate with NIF, and what challenges do you face in finding the right partners?
It's crucial for GPs to be aligned with our mission and the values of NIF and NATO and to want to impact the dual-use defence tech ecosystem. We also look for GPs who have regional coverage. Specifically, we’re interested in CEE, the Baltics, Southern Europe, and the Mediterranean.
These areas are where we think that there is still a lack of capital, and that's where we want to focus our GP investments. However, this doesn't mean we wouldn't consider other areas.
In terms of other qualities, having a strong investment track record is crucial, as well as being well-regarded, respected, and well-networked within the local ecosystems. Technical expertise within the team is also important, particularly the ability to conduct thorough due diligence on deeply technical companies. These are the key qualities we're looking for in potential GPs.
