On March 4, 2025, Germany announced a revolutionary fiscal agreement between the…
The global political situation has escalated dramatically in recent years. With the ongoing war in Ukraine, increasing tensions in various regions of the world and general uncertainty, we are experiencing a historic turning point. The much-cited "turning point" has long since become a reality - and with it, considerable sums are flowing into defence.
This opens up completely new perspectives: Companies that previously only manufactured civilian products are now seriously considering whether and how they can make their technologies and expertise usable for the defence sector. For medium-sized companies with technological expertise in particular, the question arises: What funding opportunities are there for entering the defence technology sector?
Here is an up-to-date overview of the most important programmes and instruments that will be available at the beginning of 2025:
European Defence Fund (EDF) - the flagship of EU funding
The European Defence Fund (EDF) will provide around 1.065 billion euros for defence research and development in 2025. Particularly interesting for newcomers: 4% of the budget is reserved for "disruptive" technologies and a further 6% for innovative projects focussing on SMEs.
The current 2025 work programme comprises 33 topics in nine tenders - from ground combat and cyber defence to environmentally friendly technologies. The focus is on projects such as cyber defence, marine and underwater capabilities and sensor systems.
Funding conditions in brief:
Important for your planning: The tenders have been running since mid-February 2025 and the deadline for submitting project applications is 16 October 2025.
Defence Equity Facility – capital for innovative startups
Another exciting opportunity is the Defence Equity Facility (DEF) which was launched at the beginning of 2024. This venture capital fund has a volume of 175 million euros and seeks to mobilise private venture capital for defence technology innovations with dual-use potential.
The DEF does not invest directly in companies, but in specialised private funds which in turn invest in security and defence companies. It is planned to initiate investments of up to 500 million euros in defence-related startups and SMEs by 2027.
The DEF could facilitate access to urgently needed growth capital, especially for innovative startups that develop new technologies such as AI, sensor technology or cyber security.
Dual-use potential in civil innovation programmes
An approach that is often neglected or ignored is to apply the classic innovation funding programmes such as ZIM (Central Innovation Programme for SMEs) or KMU-innovativ. Although these programmes are primarily civilian in nature, they can also be relevant for defence technology under certain circumstances.
The Federal Ministry for Economic Affairs and Energy is generally open to all technologies when it comes to ZIM. Defence technology companies can also receive ZIM grants, provided the project content can be used for civilian purposes - such as new material technologies, electronics or AI applications that could later be used for military purposes.
The same applies to BMBF programmes such as KMU-innovativ which offer calls for tenders in fields such as AI, electronics or security technologies. Although direct defence topics are excluded, security and defence as an area of application can benefit indirectly.
The Cyber Innovation Hub of the Bundeswehr (CIHBw) serves as an interface between the start-up scene and the Bundeswehr. It was launched as a pilot project to bring military users together with civilian innovations.
The CIHBw strengthened its partnerships in 2025. Particularly noteworthy is the strategic partnership concluded with the University of the Federal Armed Forces Munich on 11 February 2025. This alliance aims to closely link research and innovation with the requirements of the troops.
The hub also offers support for intrapreneurship and regularly organises innovation challenges - an exciting opportunity for innovative companies to develop their solutions directly with the Bundeswehr.
Anyone wishing to enter the defence sector should be guided by the National Security and Defence Industrial Strategy adopted in December 2024. This strategy defines clear key technologies that are prioritised for future funding:
Other critical areas include quantum technologies, missiles and air defence, space technologies, munitions and unmanned systems (unmanned aerial vehicles).
Projects that fall into these categories have a much better chance of receiving funding and being awarded long-term contracts.
As experienced lawyers with a view to funding practice, we would like to give you some practical tips:
The current global political situation has caused fundamental changes in the defence sector. The massive investment in European security is creating completely new business opportunities - even for companies that were previously active in other areas.
The funding programmes presented offer various entry options. The combination of European funds (EVF) for research and development with national programmes for concrete implementation is particularly promising.
Those who act strategically now and adapt their civil expertise to the defence sector can benefit from this growth market in the long term.
Do you have questions about funding for defence technologies or need support with your application? Contact us - we will be pleased to help you!
