AGILE: the new EU programme to fund rapid defence innovation by SMEs and startups

The European Union is preparing to launch AGILE, a new programme specifically designed to rapidly fund defence innovation driven by SMEs, startups and scaleups. With a focused but strategic budget of EUR 115 million in 2027, AGILE pursues a clear objective: to dramatically shorten the time between idea, prototype and operational deployment with European armed forces.

In a deteriorating geopolitical environment, marked in particular by the war in Ukraine and by accelerating technology cycles (AI, robotics, quantum, cyber, space), AGILE comes in as the missing link between large, long‑term collaborative programmes such as the European Defence Fund (EDF) and the operational realities in the field.

Why the EU is launching AGILE now

Over the past years, the EU has built a comprehensive toolbox to support defence research and development: the European Defence Fund (EDF), the EU Defence Innovation Scheme (EUDIS), the EIC, space programmes and initiatives such as BraveTech EU, among others. These instruments have enabled the launch of large collaborative programmes, the creation of European industrial value chains and a greater opening of the ecosystem to new actors.

However, a persistent gap remains:

large programmes are powerful but heavy, slow and tailored to long‑term, complex systems;
highly innovative SMEs and startups struggle to cross the “valley of death” between proof of concept and actual adoption by armed forces or major prime contractors.

This challenge is widely documented in the EU Defence Industry Transformation Roadmap, the European Defence Readiness 2030 White Paper and the Preserving Peace Defence Readiness Roadmap. They all stress the need to accelerate innovation, reduce time‑to‑market and ensure rapid uptake of disruptive technologies, including those originating in the civilian domain.

AGILE addresses this need head‑on by offering:

a short‑duration, targeted programme (2027),
focused on high‑TRL projects exploitable within 1 to 3 years,
with simplified procedures and significantly shortened decision timelines.

AGILE in one sentence: a go‑to‑market accelerator for defence innovation by SMEs

AGILE’s overarching objective is to support the rapid innovation capacity of SMEs, startups and scaleups to deliver emerging and disruptive defence products and technologies that address urgent capability needs of EU Member States, with a strong focus on cost‑effective solutions.

The programme pursues two main specific objectives:

accelerate innovation cycles for highly disruptive defence products and technologies developed in the EU by SMEs and startups;
enable the uptake of these solutions by armed forces and by large defence integrators (primes and tier‑one suppliers), and facilitate their scale‑up at European level.

In other words, AGILE does not fund early‑stage research; it focuses on the final stretch before operational adoption.

What topics and project types will AGILE fund?

AGILE is deliberately mission‑driven, oriented towards concrete needs of Member States rather than generic technology lists. Challenges and calls will be defined through work programmes in close coordination with Member States, based on shared operational priorities.

Emerging and disruptive technologies

The proposal highlights technology areas that are decisive for military effectiveness and credible deterrence today: AI, quantum, robotics, cyber, space and next‑generation software‑based solutions. “Emerging and disruptive defence products and technologies” include solutions with the potential to fundamentally change how operations are conducted, or to make certain existing technologies obsolete.

AGILE will especially target:

innovations from the civilian or dual‑use domain adapted to defence applications;
low‑cost, rapidly deployable solutions inspired by recent operational experience in Ukraine, such as highly iterative software, drones and counter‑drone systems, agile C2, sensing and data‑driven capabilities.

Eligible project activities

AGILE can fund several types of activities, individually or in combination:

Rapid development of defence products and technologies
Projects taking a solution to a high technology readiness level, including final design, integration and adaptation of civil or dual‑use technologies for defence applications.

Market uptake and operational deployment
Field testing, experimentation and demonstrations under realistic conditions, combined with rapid iteration cycles involving direct feedback from armed forces.
The goal is to validate the solution, refine specifications and generate credible demand signals leading to future procurements or framework contracts.

Support to setting up or relocating entities in the EU
AGILE may finance an “inducement intervention” to attract high‑potential non‑EU SMEs/startups by supporting the creation or relocation of their entity or executive management structure to the EU or an associated country.

Supporting measures
Qualification and certification activities, access to test infrastructures and advanced industrial facilities, skills development, studies and ecosystem‑building actions.

Space is explicitly recognised as a strategic priority domain, including capabilities for intelligence, surveillance and reconnaissance, secure communications, positioning, navigation and timing, early warning, resilience of space infrastructure and contributions to a future government‑owned Earth Observation Governmental Service (EOGS).

Who can benefit? A clear focus on SMEs, startups and scaleups

AGILE’s target audience is clearly defined:

SMEs within the EU definition,
including innovative startups and scaleups, as long as they qualify as SMEs.

The programme focuses on “new defence players”, often originating from the civilian or dual‑use tech ecosystem, bringing agility, fast innovation cycles and cost‑efficient, creative solutions.

Eligibility conditions

To be eligible for support under AGILE, entities must in particular:

be established in an EU Member State or in an associated country;
not be controlled by a non‑associated third country or an entity from such a country, in order to safeguard EU security and defence interests;
ensure that infrastructures, assets and resources used in the action are located in EU/associated territory for the duration of the project;
have their executive management structures in the EU or an associated country.

Unlike the EDF, AGILE does not foresee complex derogation mechanisms based on guarantees for entities controlled from non‑associated third countries, as they would undermine the speed and simplicity objectives.

Through the inducement intervention, however, high‑potential non‑EU SMEs/startups can still join the ecosystem by relocating operations and management to the EU, provided they become fully compliant before receiving any EU funds.

Single beneficiaries rather than heavy consortia

One of AGILE’s distinguishing features compared to other EU defence instruments is that it is primarily designed for single‑beneficiary projects.

SMEs may subcontract tasks or cooperate with other entities, but without the administrative and coordination burden associated with large, multi‑country consortia typical of EDF projects. This is a critical point for smaller players with limited internal resources.

Funding rate, budget and practical modalities

Funding intensity

The proposal explicitly acknowledges the specific economics of the defence sector: demand is overwhelmingly public, export is often constrained and access to private co‑financing is challenging, especially for smaller players.

As a result, the EU considers it justified that AGILE support may cover up to 100% of eligible costs for funded actions.
For a defence or dual‑use deeptech SME or startup, this means potentially full grant funding, without the need to secure matching private or industrial co‑funding.

Budget and timing

Indicative envelope: EUR 115 million in 2027, entirely financed through internal reallocations from existing defence and space‑related programmes (EDF, EDIP, EU Space Programme, Secure Connectivity Programme).
Duration: AGILE is conceived as a one‑year pilot (2027), with implementation of selected projects continuing beyond 2027 as needed.

This pilot nature is intentional: AGILE is a testbed for new ways of supporting defence innovation under the current Multiannual Financial Framework, with lessons feeding into the 2028–2034 framework.

Simplified procedures and shorter time‑to‑grant

AGILE embeds several simplification tools:

preference for funding not linked to actual costs and simplified cost options (lump sums, unit costs);
possibility of two‑stage evaluations, with an initial screening based on short project descriptions;
extended use of declarations on honour for certain eligibility and selection criteria, with targeted ex post checks.

The ambition is to reach a time‑to‑grant of around four months, compared to roughly eight months for standard EDF calls.
For fast‑moving technologies, this time factor can be a decisive competitive advantage.

What kind of companies should seriously look at AGILE?

From an industrial and business development perspective, AGILE is highly targeted. The companies most naturally aligned with the programme include:

Deeptech dual‑use startups and scaleups
Firms already at TRL 5–7+ with civil or defence references, operating in fields such as AI‑enabled C2, cyber defence, drones and counter‑drone systems, autonomous platforms, advanced sensing, ISR data processing and analytics, or edge computing for the battlefield.
Defence SMEs providing innovative subsystems
Companies already embedded in major primes’ supply chains (for example in avionics, sensors, secure communications, mission systems) with differentiated technology bricks, but limited ability to self‑finance extensive field trials, qualification and industrial ramp‑up across multiple EU customers.
Space companies with strong defence potential
Providers of imagery, geospatial analytics, secure satellite communications, space domain awareness or space‑enabled services able to offer defence‑grade capabilities and contribute to EU flagship initiatives in space and security.
Non‑EU startups with truly unique technologies
High‑profile dual‑use or defence startups based outside the EU (e.g. in drones, ISR, cyber or AI for defence) that are willing to set up or relocate a structure and management team in the EU, in exchange for a credible pathway to funding, industrial integration and market access.

How does AGILE complement EDF, EUDIS and the EIC?

AGILE is not designed in isolation; it fills a specific gap within a broader EU defence innovation landscape:

Compared to EDF
EDF supports large‑scale, collaborative R&D and development projects, often with long‑term horizons and complex, system‑level objectives. AGILE focuses on smaller, faster projects led by single entities and on solutions that can be deployed and adopted within 1–3 years.
Compared to EUDIS (within EDF)
EUDIS already provides support to non‑traditional defence actors through R&D calls, hackathons, a business accelerator and matchmaking services. AGILE offers a natural “next step” for the most promising innovators emerging from these schemes, by funding late‑stage development and operational uptake.
Compared to the EIC and STEP
The EIC Accelerator, extended through STEP, can back dual‑use and strategic technologies and provide equity financing, including to some defence‑related firms. However, its remit for purely defence‑oriented grant support is limited. AGILE addresses this gap with targeted grant funding for defence‑specific innovation.

Together, EDF + EUDIS + EIC + AGILE cover the full defence innovation chain: from early‑stage research to collaborative development, business acceleration and rapid operational deployment.

Why AGILE matters for defence SMEs and startups

For SME and startup leaders active in defence or dual‑use deeptech, AGILE offers several compelling advantages:

Potential coverage of up to 100% of eligible costs, easing pressure to secure co‑funding in a capital‑intensive and highly regulated sector.
A lighter format than classic EU collaborative programmes, making it realistically accessible to small, agile teams.
A strong focus on the “last mile” of innovation: field trials, demonstrations, qualification and adaptation to real operational needs, which is where many promising technologies get stuck.
A tight link to demand: AGILE is built around urgent, shared capability needs of Member States, sending clearer demand signals and facilitating follow‑on procurement decisions.

At ecosystem level, AGILE is expected to:

broaden and diversify the European Defence Technological and Industrial Base (EDTIB) by integrating more new entrants;
reduce some strategic dependencies on non‑European solutions;
pilot more flexible and responsive support models that can scale under the next EU budget framework.

How can companies start preparing?

Even though AGILE calls are expected in 2027, forward‑looking companies can already start preparing:

Map innovations that could realistically reach a high TRL and be deployed within 1–3 years.
Formalise concrete defence use cases with clear operational scenarios, integration pathways and measurable effects.
Review ownership and control structures to ensure compliance with EU eligibility rules (no non‑associated third‑country control, executive management in the EU or an associated country).
For non‑EU firms, assess the feasibility and business case for establishing or relocating an EU‑based entity, potentially supported by AGILE’s inducement mechanism.

Above all, successful applications will demonstrate: