EIFO Invests in Ukraine-Focused D3 Fund to Drive European Defence Innovation
The Export and Investment Fund of Denmark (EIFO) has committed $5 million to the venture capital fund D3, marking the first state-backed investment into a Ukraine-focused defence technology accelerator. The fund, established in 2023, targets early-stage companies operating in key dual-use and military innovation sectors, including UAVs, robotics, AI, demining and electronic warfare. EIFO’s strategic investment aims to strengthen Ukraine’s defence-industrial ecosystem while reinforcing Denmark’s access to combat-proven technologies. Positioned at the intersection of asymmetric warfare experience and allied capital, D3 functions as a transnational bridge between Ukraine’s battlefield innovation and European security requirements.
The move aligns with Denmark’s broader defence and industrial strategy, which includes a DKK 1 billion (approx. $157 million) guarantee scheme for investments in Ukraine’s defence sector. EIFO’s involvement in D3 not only offers direct exposure to frontier military technology but also opens pathways for Danish firms to participate in joint development, procurement, and export partnerships. According to EIFO CEO Peder Lundquist, the investment reinforces Denmark’s commitment to supporting Ukraine while enabling the Danish defence sector to tap into Ukraine’s fast-paced innovation cycle. The initiative reflects an institutional shift towards embedding defence technology into Denmark’s long-term economic and security architecture.
Following Russia’s full-scale invasion, Ukraine has emerged as a hub for applied defence innovation, particularly in asymmetric domains such as low-cost drone swarms, EW resilience, and battlefield-ready AI. D3 has already screened over 700 companies and closed 16 investments, often co-financed by leading global venture capital firms including Sequoia Capital, a16z, and Lux Capital. The fund’s strategy is to deploy capital rapidly across more than 30 startups, while helping them scale through technical partnerships, NATO-aligned certifications, and cross-border business structures. EIFO’s participation offers risk-tolerant equity crucial to nurturing early-stage firms in conflict-driven but technologically advanced contexts.
The investment has been welcomed by both Ukrainian and Danish leadership as a model of practical transnational defence collaboration. Danish Minister for Industry and Business Affairs Morten Bødskov called the move “an investment in the defence industry of the future,” highlighting its dual value: immediate support for Ukraine and long-term dividends for European resilience. Ukraine’s Minister of Strategic Industries, Herman Smetanin, emphasised that this capital infusion will allow Ukrainian engineers to scale battlefield-tested solutions for broader Euro-Atlantic adoption. This approach also supports local industry, stabilises wartime employment, and reinforces Ukraine’s strategic autonomy through indigenous innovation.
D3’s operating model differentiates itself by offering dual pathways: for Ukrainian firms, it provides capital and operational support to globalise their technology; for allied firms, it offers a soft-landing into Ukraine’s rapidly evolving defence ecosystem. As one of the few funds operating at the nexus of real-world combat innovation and venture-backed scaling strategies, D3 is poised to become a central player in European defence innovation. EIFO’s endorsement of the fund signals growing political and institutional recognition that Ukraine’s war-forged technologies are not just critical for Ukraine’s survival, but also essential components of the future European defence-industrial base.