What is EIC STEP Scale Up Defence and Who is it for?
The EIC STEP Scale Up Defence call does not grant traditional subsidies; instead, it offers equity-only investments ranging from EUR 10 to 30 million. It targets technology scale-ups, small and medium-sized enterprises (SMEs), or small mid-caps (up to 499 employees) preparing for a major funding round.
A key requirement is a proven and sufficiently mature breakthrough technology with a primary defence application. It must not be an unproven lab concept. Projects that are predominantly civilian or dual-use fall under the general STEP Scale Up call. Capital is intended for industrialisation, setting up manufacturing capacity, certification, and market expansion. Note: you cannot apply simultaneously for the EIC Accelerator, EIC STEP Scale Up, and STEP Defence—only the latest submission is evaluated. Furthermore, after three unsuccessful submissions of the same or updated proposal under STEP/STEP Defence, the project can no longer be resubmitted.
The 3 to 5x Rule: How to Set the Target Round Size Correctly
Proper architecture of the funding round is essential for success. The target investment round must reach a size of EUR 50 to 150 million or higher.
Additionally, the so-called 3 to 5x rule applies: the total round size must be at least 3 to 5 times the requested investment amount from the EIC Fund. For instance, if you are requesting EUR 20 million from the EIC, the total round must range between EUR 60 and 100 million at minimum.
The 20% Pre-commitment Requirement
The most significant administrative hurdle is the requirement to present a preliminary investment commitment (pre-commitment). This must satisfy strict conditions:
- It must come from a single qualified investor. Aggregating smaller commitments from multiple investors will not satisfy this condition.
- It must cover at least 20% of the total target round.
- The respective funds must remain uninvested as of the date the commitment letter is signed.
Common Founder Concerns and How We Address Them
Scale-up founders frequently worry about equity dilution, loss of control over the business, or leaking sensitive know-how. We mitigate these risks through early preparation.
We model the cap table and potential investment scenarios in advance. We separate publicly shared information from confidential data, arranging a secure transmission mechanism with EISMEA at least 30 working days prior to the deadline. As part of our consultancy services, we review ownership control, Freedom to Operate (FTO), and export control restrictions (such as ITAR/EAR) to safeguard your intellectual property. We also clearly distinguish between fixed parameters and negotiable terms with the EIC Fund.
What If Funding Runs Out? The Value of the Sovereignty (STEP) Seal
The budget for the 2026 call is set at EUR 100 million. Given a minimum investment of EUR 10 million per company, only about 3 to 10 businesses will be selected, leading to anticipated oversubscription.
If your project meets all quality criteria but fails to receive funding solely due to budget exhaustion, it will be awarded the Sovereignty (STEP) Seal certificate. This recognition serves as a strong European validation of your technology, opening doors to private investors, defence industry partners, and follow-on support programmes.
Why Start Preparing as Early as Summer?
The call deadline is set for 28 October 2026 at 17:00 Brussels time. Preparing the application form alone is not enough; you must align investors, refine financial models, organize cap tables, address security clearances, and collect defence-related evidence.
The absolute latest sensible time to start preparation is August 2026. Early September is the emergency limit, applicable only if you already possess a secured investor pre-commitment and a fully populated data room.
Planning an investment round in the defence sector? Find out whether you meet the 3 to 5x rule for EIC STEP Defence. Schedule a non-binding go/no-go screening with us today.
