The Netherlands has been selected as the headquarters of NATO’s Innovation Fund (NIF) in a decision disclosed on Monday. First announced at the organisation’s 2022 Madrid Summit, the fund will invest €1 billion on behalf of NATO member countries over the next 15 years.

NIF is a multi-sovereign venture capital fund that will focus on investing in early-stage startups and other VC funds developing (dual-use) emerging and disruptive technologies — to be used in military and defense applications. These include: artificial intelligence; big-data processing; quantum technologies; autonomy; biotechnology and human enhancement; novel materials; energy; propulsion and space.

“This will allow NATO to tap into the innovation ecosystem for the benefits of our security and defense,” David van Weel, NATO’s Assistant Secretary General for Emerging Security Challenges, said in a statement. The board’s decision to base NIF’s investment management arm in the Netherlands “marks an important milestone in setting up this historic fund,” he added.

A significant advantage of the Netherlands over other bidders is that the country’s financial market regulator (AFM) has a relatively fast admissions process, the Financieele Dagblad reports, citing NATO sources. And according to the same sources, Amsterdam seems to be the preferred location for NIF’s headquarters, although no final decision has been made.

The Dutch government welcomed the establishment of the fund in the Netherlands, which is expected to “increase the possibility for innovative Dutch startups to gain access to capital.”

“In this way, we are strengthening what our country is good at, namely working on solutions for the future,” Micky Adriaansens, Minister of Economic Affairs and Climate Policy, said.

As per Minister of Defence Kajsa Ollongren,”More investment in high-tech is urgently needed. For example, we are working with our NATO allies to defend against new threats. That is also why the Netherlands has already decided to substantially increase the budget for research, technology and innovation.” Accordingly, the Netherlands has pledged to contribute more than €55 million in the 15-year period.

The fund will be officially launched at NATO’s next summit in Vilnius, Lithuania, in July.

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