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Image Credit: Martin Bissig

The NATO Innovation Fund (NIF) is entering a new era, two years after gathering $1 billion in commitments from more than 20 nations. As defense spending rises across NATO, the fund is restructuring its investment team with two fresh partners joining and the last of its founding team stepping down.

Surge in Dual-Use Defense Investment

The recent boost in military budgets among NATO member states has triggered a surge in dual-use technology investment—technologies that serve both civilian and defense purposes. European institutional investment in defense and resilience technology now accounts for a record-setting 10% of total VC funding—a dramatic change for sectors once considered off-limits to mainstream venture capital.

Deep Founder Analysis

Why it matters

The rapid pivot toward dual-use and defense technology signals a profound shift in how governments, investors, and startups view national security. What was once a space shunned by commercial backers is now a focal point for funding and innovation. This shift opens doors for startups specializing in sectors like aerospace, cybersecurity, energy resilience, and advanced materials—opportunities that rarely saw institutional capital as recently as five years ago.

Risks & opportunities

This momentum brings both risk and reward. For founders, there’s the challenge of navigating complex international regulations, procurement cycles, and competing strategic interests. Yet for agile teams able to bridge public and private sector needs, first-mover advantages are substantial. European startups, in particular, may find new scaling routes with government support. However, long sales processes and shifting geopolitics can hinder growth if not managed proactively.

Startup idea or application

Consider a SaaS platform that helps dual-use startups comply with defense export controls and NATO procurement protocols—lowering the barrier to entry for non-traditional defense founders. Alternatively, imagine a data analytics service providing market intelligence on emerging government defense priorities, helping founders pivot in fast-changing landscapes.

Team Overhaul at the NIF

Despite enjoying first-mover status, NIF faced leadership challenges and experienced several major departures. Following the 2025 NATO Summit in The Hague, the fund’s new, leaner investment team now includes:

• Ulrich Quay (Germany, ex-BMW, BMW i Ventures founder)
• Sander Verbrugge (Netherlands, deep tech specialist, ex-Innovation Industries, NXP)
• Patrick Schneider-Sikorsky (London, remaining original VC partner)

Departing partners such as Kelly Chen and Chris O’Connor are both moving on to build new ventures. Chen will transition off the boards of several NIF-backed startups after her tenure concludes.

NIF's Evolving Investment Strategy

NIF’s three-partner structure is set for the near future, with no immediate expansion planned. Since its start, the fund has made 19 investments: 12 startups and 7 funds, including noted companies like Space Forge and Tekever (dual-use drone technologies). Although some stakeholders wish NIF deployed capital more aggressively, the fund's leadership confirms it is on pace to meet year-end targets.

Look for a shift towards more direct defense-oriented projects, especially as NIF's team contributed to NATO’s Rapid Adoption Action Plan—improving tech transition from lab to battlefield. The Mission Platform Group, led by John Ridge (chief adoption officer), now supports portfolio companies through military procurement processes.

Team Selection and Growing Pains

NIF’s new hires were selected by its board and approved by limited partners—a process likened to 'building a boy band' rather than traditional venture partnership formation. Yet, this may be necessary with a fund involving 24 countries as LPs, underscoring the complexity of pan-European defense innovation. To address prior cohesion issues, the new partners underwent extensive onboarding together, preparing the team for long-term success.

Looking Ahead: Focus on Scale and Ecosystem

According to Professor Fiona Murray, NIF’s vice chair, the fund is operating with a startup mentality—experimenting, speeding up processes, and expanding ecosystem support. The team aims to pursue larger, industrial-scale opportunities that strengthen European technology resilience. Questions linger over governance and potential conflicts of interest at the board level, but the focus is firmly on scaling Europe’s defense, security, and resilience innovation sector.

Defense Tech Venture Capital Dual-Use Innovation NATO Startup Opportunities

For more on security and defense innovation, read our article on National Security and Next-Gen AI at TechCrunch Disrupt 2025.

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