European Innovation Council's first defense equity call draws nine bids for €175 million

The European Innovation Council's first call to invest directly in defense companies has closed with nine applications from companies in seven countries, the EIC said on October 29, 2026. Together they asked for €175 million in equity investment, well above the call's 2026 budget of €100 million. A third of the applications came from “widening” countries, the EU's label for countries whose research and innovation performance lags behind.

The EIC STEP Scale Up Defence call, part of the EU's Strategic Technologies for Europe Platform (STEP), offers €10 million to €30 million per company, invested through the EIC Fund. The money is meant to anchor much larger rounds. Applicants must be raising €50 million to €150 million or more, at least three to five times the EIC's investment, and must bring a pre-commitment from a single qualified investor covering at least 20% of the round. No EU funding program has taken equity stakes in defense companies directly before, according to the EIC.

The call was open to small and medium-sized companies and small mid-caps with fewer than 500 employees in EU member states, in European Economic Area countries associated with Horizon Europe, and in Ukraine. It covers critical defense technologies such as air and missile defense, drones and counter-drone systems.

A change of course in June

The EIC opened to defense and dual-use technologies on June 17, 2026, when the European Commission amended the council's 2026 work program to implement what it calls the Defence Mini-Omnibus. Since then, the EIC Accelerator and the civilian STEP Scale Up scheme can also back companies with dual-use technologies, with grants of up to €2.5 million and equity of up to €30 million. The separate defense call opened on July 1 and closed on October 28.

The European Innovation Council was built to take risks, and we need to take risks when it comes to developing European technologies that keep us safe.

How it compares with the civilian call

The defense call drew far fewer proposals than the EIC's civilian STEP Scale Up call, whose 2026 budget is €300 million and which reviews proposals in quarterly batches. The nine defense applicants asked for about €19 million each on average, by our calculation, within the €10 million to €30 million range on offer.

In both civilian rounds, the EIC rated more companies excellent than its budget could fund. Those not selected, 18 in April and six in July, are to receive a STEP Seal along with the selected companies. The seal is meant to make it easier to find other funding, and it opens the EIC's business acceleration services to them.

What comes next

The EIC is assessing the proposals now. It expects to interview the shortlisted companies in January 2027 and to announce results in February. Any company that meets all the evaluation criteria gets the STEP Seal, funded or not. The EIC said in June that it expects its support for defense innovation to continue in 2027.

Britain is moving in a similar direction. In its October 28 Budget, the government said it expects up to £900 million of a £2 billion uplift for the British Business Bank to support defense and dual-use technologies; our report on the Budget has the details.