Investors focus on startups developing military technology | Business

The fund is currently paying increased attention to defense technologies. This is important for Lithuania, not only because of new opportunities for the country’s startups, but also because of the development of technologies that ensure greater security.

“Our focus is science or engineering based solutions with intellectual property potential. Such solutions are fundamental and can often be applied in several different verticals. The technologies developed by some of the startups in our portfolio also have a dual application – the same technology can be applied in both the security and humanitarian sectors,” says Andrius Milinavičius, general partner of the fund.

Baltic Sandbox Ventures is one of INVEGA’s partners, managing the venture capital instrument “Acceleratorius 2” and allocating investments in deep technologies, life sciences and dual purpose fields. INVEGA invested 18 million through this measure alone. EUR, distributed to 2 funds, of which BSV specifically has already invested in almost 30 companies, having invested EUR 2 million. EUR out of the total 9 million provided for them. euros.

Recently, startups developing technologies that can also be applied in the field of defense are getting more attention from the fund, and this is for several reasons.

“Dual use is in a sense deeptecho DNA, and defense is the area where states can afford to invest in prototypes more than commercial structures”, explains D. Milašius, BSV investment partner.

Quality and speed of prototyping

It is precisely at this time that the emerging geopolitical situation encourages paying more attention to dual-use technologies.

“The situation in our neighborhood, and especially the invasion of Ukraine, encouraged the Lithuanian technology sector to develop more military technologies. And it’s not just business, it’s also a geopolitical risk management tool, which also encourages paying more attention to this area,” adds A. Milinavičius.

Another reason why potential partners are being sought in and around Lithuania – today the quality of innovations developed here and the speed of prototyping are ahead of most of the veterans of the defense industry.

“The reasons for this are the patriotism and drive of our entrepreneurs and the opportunity to supply products to the defenders of Ukraine, where testing them in real conditions quickly provides very useful feedback.” Lithuanian products developed in this wave of innovation are already starting to be supplied to global markets”, says D. Milašius.

The portfolio is not only Lithuanian

Among the companies in the fund’s portfolio are startups not only from Lithuania, but also from Estonia and Finland. Some of them have already passed the technology development stage and are already in the testing stage. For example, a trike (electric three-wheeled vehicle) developed by AKO has been tested at a military academy in Germany.

There are companies that already have their products on the market. Together with another portfolio company SkyCorp, MappingSoil, which developed a new generation of soil object detection technology, recently won a prestigious hackathon in France. AI algorithms developed by Repsense currently help combat disinformation, while software developed by BlackSwan helps control satellites.

“Of course, the success of our investment portfolio depends not only on the ideas of start-ups, but also on business management, adequate financing and the delivery of prototypes to pilot users – which may include the institutions of the national defense system,” emphasizes D. Milašius.

Together with our partners, the Foundation presents our achievements at international events, together with “Coinvest Capital” representatives of the NATO Innovation Fund (NIF) have been hosted twice in Lithuania. The first event took place last year, during the NATO summit in Vilnius. This year, the NIF team, which even visited Lithuania for a few days, took part in a closed presentation of deep technology solutions, where they met with the most interesting innovators of our ecosystem, including relevant companies of the fund.

“The NIF fund is critically important for all NATO countries and Lithuania, so we strongly support their work. Their goal is to invest in deep technologies, so the missions of our funds not only coincide, but also open up new opportunities for the companies in our portfolio,” says A. Milinavičius.

The ecosystem of dual purpose investors is growing

Partners including Coinvest Capital, LitBAN’s investor network and business angels investing in deep technologies help finance dual-use business ideas.

“We also have joint investments with partners from the ScaleWolf Foundation, whose mission is to strengthen defense innovation alone. It is interesting that after the invasion of Ukraine, the understanding of ESG requirements changed, as a result of which the investors of the Eastern Flank began to invest more actively in the field of critical technologies. A similar mindset can be felt in the USA, the United Kingdom and other European countries. In addition, the institutions of the European Union have launched new investment measures, but Europe is still a little late in investing in security innovations”, observes D. Milašius.

INVEGA’s financial instrument “Acceleratorius 2” started 2 years ago. in order to support innovative companies, start-ups. Thanks to this tool, start-up teams can count on financial assistance both for the generation of ideas and for the development of an already created product or service, and for the growth of their company. A total of 18 million has been allocated to the venture capital instrument “Acceleratorius 2” financed by the Innovation Promotion Fund. euros. Investments are administered by two funds – BSV and FIRSTPICK. Investments in one company, startup can reach up to 500 thousand. Eur.