Today the European Commission committed €100 million to the Defence Equity Facility 2.0 (DEF 2.0), an investment vehicle designed with the EIB and EIF with a target size of up to €1 billion. Building on the success of its predecessor, the Defence Equity Facility, DEF 2.0 will strengthen access to finance for defence companies, helping them grow, scale up and reinforce the Union’s defence industrial capacity.
Access to equity and other forms of risk capital is key for European defence companies, in particular SMEs, start-ups and small mid-caps, to grow and scale-up. It is also crucial that this capital comes from European investors, so that these companies stay under European control. DEF 2.0 helps on both fronts by mobilising European public and private investment into European defence companies.
A €1 billion investment ambition, backed by European public investors
On 9 November 2026, the European Commission announced a €100 million commitment to DEF 2.0, adding to commitments from the European Investment Bank (EIB) Group and participating Member States, including Lithuania and Bulgaria.
With a fundraising target of €1 billion, DEF 2.0 is expected to significantly expand the investment capacity of the original Defence Equity Facility. Additional Member States are expected to join the initiative in the coming months.
Implemented by the European Investment Fund (EIF), DEF 2.0 operates as a pan-European “fund-of-funds”. Rather than investing directly in individual companies, it takes investment positions in specialised European funds, including venture capital, private equity, private credit and infrastructure funds. These funds, in turn, provide financing to companies developing defence technologies and products, as well as the industrial capabilities and infrastructure underpinning Europe’s security.
By acting as an investor and taking cornerstone positions in selected funds, the facility aims to reduce investment risks, attract additional private capital and strengthen the European ecosystem of investors specialising in defence.
The Commission is pleased to commit to the Defence Equity Facility 2.0. This initiative builds on our efforts to enable Europe’s defence tech companies count on European capital to grow, scale, and deliver the critical capabilities our Armed Forces needs.[…] ”
Andrius Kubilius, European Commissioner for Defence and Space
Background
The Commission’s contribution to DEF 2.0 is financed under the Fund Accelerating Supply Chain Transformation (FAST), one of the components of the European Defence Industry Programme (EDIP).
Funds supported by DEF 2.0 will invest in growth-stage companies established in the EU or Norway that manufacture or industrialise defence products or form part of the Union’s defence supply chains. Investments will be aligned with the priority defence capability areas identified by Member States and the objectives set out in the White Paper for European Defence Readiness 2030.
DEF 2.0 builds on the experience of the original Defence Equity Facility (DEF), launched in 2024 with €175 million under InvestEU, through a blending operation involving the European Defence Fund.
DEF has been instrumental in establishing a specialised European investment ecosystem for defence and security, helping new dedicated investment funds emerge. Now almost fully invested, the pilot has demonstrated the importance of public intervention in mobilising private capital and improving access to finance for European defence companies.
DEF 2.0 will build on this foundation, and expand the scale of the investment capacity.
