EU Council accelerates Eastern Flank Watch, EIC opens direct equity, E2D fund launches, Frankenburg eyes unicorn round

EIC opens €100 million STEP Defence Scale Up call, first EU programme to take direct equity in defence

On 17 June the European Innovation Council opened defence and dual-use technologies to its investment mandate, launching a €100 million EIC STEP Defence Scale Up call under which companies in EU Member States, EEA countries associated to Horizon Europe and Ukraine can receive up to €30 million in direct equity to scale industrial capabilities in air and missile defence, drones and counter-drones, and other critical defence technologies . Crucially, this is the first time any EU funding programme will invest direct equity in defence companies, with the EIC co-investing in major rounds typically ranging from €50 million to €150 million or more, where total round sizes are expected to be at least three to five times the requested EIC investment . Applications run from 30 June to 28 October 2026, with results expected in early 2027 . For ventures raising Series B or later, the EIC has just become a credible anchor LP, but only if your round size, cap table and dual-use thesis are already shaped to clear the three-to-five-times leverage test.

Source: The European Innovation Council opens to defence and dual-use technologies, European Innovation Council

Frankenburg opens Riga missile factory and lines up €100 million Series B at unicorn valuation

Estonia's Frankenburg Technologies opened its Riga Weapon System and Missile Assembly Factory on 23 June, establishing its first operational step in a FieldFoundry manufacturing model for high-volume missile system production , with EU Defence Commissioner Andrius Kubilius personally inaugurating the site, while the company also plans production facilities in Estonia, Poland and Britain, targeting one million missiles per year and 1,500 units this year . The day before, Bloomberg reported that Frankenburg is seeking around €100 million in fresh funding to build an anti-ballistic missile system, in talks with potential investors about a Series B that could value it at more than €1 billion, giving the startup unicorn status . The Mark I anti-drone interceptor is designed to come in at roughly a tenth of a Stinger's cost. For ventures in effectors and propulsion, Frankenburg is rewriting the European missile-house playbook: containerised production, foreign-policy-aligned siting, and venture economics applied to munitions. The bar for new entrants in counter-UAS just got higher.

Source: Frankenburg opens missile assembly site in Riga, Defence Industry Europe

Destinus completes 1,000th T150 turbojet, moves European cruise-missile propulsion to industrial scale

Destinus announced this week that it has completed its 1,000th T150 turbojet engine in 2026, developed and manufactured in-house in Europe to power the Ruta B1 and Ruta B2 cruise missile family, supporting serial production and operational deployment of the Ruta systems and strengthening Europe's ability to produce cruise-class propulsion at industrial scale . The company frames propulsion as a critical bottleneck in scalable cruise missile production, with the T150 designed to address that constraint through a turbojet built from scratch and produced on a European line built for repeatable, qualification-driven output, and providing a scalable propulsion base for further ramp-up . The line is designed for continuous ramp-up, supporting current Ruta output and planned capacity expansion through the Rheinmetall Destinus Strike Systems joint venture . For ventures in propulsion, energetics, guidance and seekers, this is the strongest signal yet that deep-strike supply chains are now Tier-1 procurement priorities, and that the prime-plus-startup JV is becoming the default route to volume contracts.

Source: Destinus completed 1,000th T150 turbojet engine in Europe, Defence Industry Europe