Key Takeaways
- • The European Commission committed €100 million to the Defence Equity Facility 2.0 (DEF 2.0) on 9 November 2026, targeting a total fundraise of up to €1 billion.
- • DEF 2.0 is a pan-European fund-of-funds implemented by the European Investment Fund (EIF), taking cornerstone positions in venture capital, private equity, private credit and infrastructure funds rather than investing directly in companies.
- • The Commission's contribution is financed under the Fund Accelerating Supply Chain Transformation (FAST), a component of the European Defence Industry Programme (EDIP), alongside commitments from the EIB Group and participating Member States including Lithuania and Bulgaria.
- • Target investees are growth-stage companies in the EU or Norway that manufacture or industrialise defence products or form part of Europe's defence supply chains, aligned with priority capability areas and the White Paper for European Defence Readiness 2030.
- • The predecessor Defence Equity Facility, launched in 2024 with €175 million under InvestEU, is almost fully invested and is cited as evidence that public intervention can mobilise private capital into European defence.
Summary
The European Commission announced on 9 November 2026 a €100 million commitment to the Defence Equity Facility 2.0 (DEF 2.0), an investment vehicle designed with the European Investment Bank (EIB) and the European Investment Fund (EIF) with a target size of up to €1 billion. The commitment adds to contributions from the EIB Group and participating Member States, including Lithuania and Bulgaria, and additional Member States are expected to join in the coming months.
DEF 2.0 is structured as a pan-European fund-of-funds, implemented by the EIF. Rather than investing directly in individual companies, it takes positions in specialised European funds spanning venture capital, private equity, private credit and infrastructure. These funds in turn finance companies developing defence technologies and products, as well as the industrial capabilities and infrastructure underpinning European security. The facility aims to reduce investment risk through cornerstone positions, attract additional private capital and strengthen the European ecosystem of investors specialising in defence.
The Commission's contribution 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, with investments aligned to priority capability areas identified by Member States and the objectives of the White Paper for European Defence Readiness 2030.
The initiative builds on the original Defence Equity Facility (DEF), launched in 2024 with €175 million under InvestEU through a blending operation involving the European Defence Fund. According to the Commission, DEF helped establish a specialised European investment ecosystem for defence and security and enabled new dedicated investment funds to emerge. The pilot is now almost fully invested, which the Commission cites as evidence of the importance of public intervention in mobilising private capital.
Andrius Kubilius, European Commissioner for Defence and Space, said the Commission is pleased to commit to DEF 2.0, which aims to enable European defence technology companies to rely on European capital to grow, scale and deliver the capabilities Armed Forces require. The Commission also frames the European-investor focus as essential to keeping defence companies under European control, particularly SMEs, start-ups and small mid-caps that depend on equity and risk capital.
DEF 2.0 is structured as a pan-European fund-of-funds, implemented by the EIF. Rather than investing directly in individual companies, it takes positions in specialised European funds spanning venture capital, private equity, private credit and infrastructure. These funds in turn finance companies developing defence technologies and products, as well as the industrial capabilities and infrastructure underpinning European security. The facility aims to reduce investment risk through cornerstone positions, attract additional private capital and strengthen the European ecosystem of investors specialising in defence.
The Commission's contribution 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, with investments aligned to priority capability areas identified by Member States and the objectives of the White Paper for European Defence Readiness 2030.
The initiative builds on the original Defence Equity Facility (DEF), launched in 2024 with €175 million under InvestEU through a blending operation involving the European Defence Fund. According to the Commission, DEF helped establish a specialised European investment ecosystem for defence and security and enabled new dedicated investment funds to emerge. The pilot is now almost fully invested, which the Commission cites as evidence of the importance of public intervention in mobilising private capital.
Andrius Kubilius, European Commissioner for Defence and Space, said the Commission is pleased to commit to DEF 2.0, which aims to enable European defence technology companies to rely on European capital to grow, scale and deliver the capabilities Armed Forces require. The Commission also frames the European-investor focus as essential to keeping defence companies under European control, particularly SMEs, start-ups and small mid-caps that depend on equity and risk capital.
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