EIC opens STEP Scale Up Defence call

On 1 July 2026 the European Innovation Council opened a dedicated STEP Scale Up Defence call under its Strategic Technologies for Europe Platform. The call allows eligible companies to seek direct equity investments of between €10 million and €30 million from the EIC Fund to accelerate industrial scale up in critical defence technologies. The scheme targets technologies such as air and missile defence, drones and counter‑drone systems and other critical defence areas. The European Commission describes this as the first time any EU funding programme will invest direct equity in defence companies.

What the call offers and why it matters

The EIC Fund will provide equity only investments in companies selected through the STEP Defence call. The investment is intended to catalyse much larger financing rounds. The Commission expects EIC investments to sit within rounds typically ranging from €50 million to €150 million or more with total round sizes normally at least three to five times the EIC contribution. In practical terms the EIC’s stated minimum investment under STEP is €10 million and the maximum is €30 million per company in 2026.

Who can apply and important eligibility points

Eligible applicants are single startups, SMEs and small mid‑caps (generally companies with fewer than 500 employees) established in EU Member States, in EEA countries associated to Horizon Europe, and in Ukraine. Investors may also submit on behalf of eligible companies. The call contains a general exclusion rule: legal entities established in the Union, in Ukraine or in an associated EEA country that are directly or indirectly controlled by a third country other than Ukraine or an associated EEA state cannot participate unless appropriate guarantees are presented and approved in accordance with the national procedures of the Member State or associated country where the entity is established.

Required application materials and selection process

To be admissible proposals must include a full business plan of up to 50 pages describing ownership and financial structure and explaining STEP objectives, a pitch deck in PDF of up to 15 pages, the investor pre-commitment, a financial plan using the EIC template, freedom to operate analysis or a two‑page note on FTO, and CVs of key personnel. Applicants that meet eligibility requirements and pass remote evaluation are invited to a jury interview. The published guidance indicates applicants will be informed of interviews typically four to six weeks after the start of evaluation and decisions two weeks after the interview.

Who performs due diligence and manages the investment

The EIC Fund uses an external fund manager and the European Investment Bank as investment adviser. The due diligence and investment process involves the EIB and contractors such as Alter Domus for company checks and accounting functions and Dealflow for investor outreach and additional deal support. The EIC Fund Board and the Fund manager structure and approve investments. The EISMEA agency manages the EIC programme side including grants and business acceleration services.

Political, legal and practical implications

Opening the EIC to defence and dual use technologies has immediate strategic logic in the context of European security concerns and supply chain dependencies exposed since Russia’s invasion of Ukraine. At the same time the move raises difficult legal, ethical and export control questions. Direct equity investment by an EU programme into defence companies is unprecedented. It brings reputational and policy risks for the Commission and for private partners that co-invest.

Investors and companies should also factor in export controls, dual use regulation, national approval procedures, possible restrictions on third country ownership and data security requirements. The call text contains a specific exclusion rule relating to third country control and requires guarantees in certain cases. These requirements will affect deal structures and investor pools.

Practical advice for applicants

Prepare a strong, investor-quality business plan focused on market size, defensive technological edge, production and supply chain resilience and export control compliance. Secure the single investor pre-commitment early to meet the 20 percent requirement and ensure that the investor tranche is unspent at the date of the pre-commitment. Include a clear freedom to operate analysis and robust IP strategy. Expect detailed due diligence by the EIB and appointed contractors and budget adequate time for negotiation.

What to watch next and a cautious view

This call is part of a broader effort to build Europe’s deep tech and defence industrial base. The EIC’s stated aim to crowd in private capital is credible in some markets, but the promise that public equity will reliably leverage three to five times EIC investment depends on investor appetite for defence risk, exit prospects and regulatory constraints. The first round of STEP Defence investments and the composition of co‑investors will be important signals about how cleanly public and private capital can align in this sector.

Stakeholders should monitor how the Commission implements safeguards on third country influence and how it handles export control and ethical questions. Companies should be realistic about timelines and the depth of due diligence that will follow a positive jury decision.

How to get more information

Call documents and submission guidance are available on the EIC webpages and on the EU Funding and Tenders Portal. The EIC also offers Business Acceleration Services and STEP Seal recognition to applicants that meet evaluation thresholds. National Contact Points and the Enterprise Europe Network can provide additional advice locally.