Faced with rising geopolitical tensions and the prospect of a high-intensity engagement, the Defense Industrial and Technological Base (DITB) is more than ever at the heart of French and European sovereignty. While major prime contractors are often the focus of attention, start-ups, SMEs and ETIs form the industrial backbone of the sector, supporting innovation, production and ramp-up.
For these companies, access to financing remains a critical factor.
A year rich in announcements in 2025
In March 2025, the French Ministries of the Economy and the Armed Forces launched an unprecedented dialogue between DTIB companies and public and private financiers.
This has led to the announcement of a number of new entrants to the defense funding landscape. Whether they are public or private, whether they finance innovation or growth, whether they provide debt or capital, these initiatives are essential.
In total, nearly €3 billion in public and private funding has been announced over the past 10 months. However, the overall needs of the DTIB are estimated at around €5 billion by Economy Minister Lombard.
Sovereignty as a strategic necessity
In parallel with these encouraging announcements, geopolitical tensions have only increased. The upheaval of the transatlantic alliance and the threats to European nations make the strategic autonomy of France and Europe more necessary than ever.
This strategic autonomy is as much a question of the military as of finance. To enable us to innovate and equip our forces over the long term, capital must be available to invest, to finance the ramp-up and to transfer all links in the value chain on a sovereign basis.
Current financing arrangements cover each of the essential links, but certain key needs are not yet fully addressed. The foreign divestment announcements that have hit the headlines since 2025 demonstrate that sovereign wealth transfer is a glaring example of the challenge facing defense companies.
A major lever: bringing together industrial policy and financial engineering
Reconciling sovereignty and the financing of defense SMEs and ETIs requires a paradigm shift: building a continuum between innovation, public procurement and private capital. Only in this way can the DTIB become more resilient, accelerate its growth and sustainably meet the strategic challenges of the years ahead.
Download the Carolina Göthberg (Kairn Strategy Consulting) and Michaël Agbohouto (Eurogroup Consulting), carried out as part of the The Institute by Eurogroup Company.
