Klaus Hommels becomes head of the supervisory board at the NATO Innovation Fund

Klaus Hommels

For NATO, the investor should ensure that more innovative companies are created in the field of security and defense.

(Photo: Lakestar)

Dusseldorf NATO wants to promote military-related technologies and has appointed a well-known investor in Germany to an important position: Klaus Hommels, founder of the venture capital company Lakestar, will become the head of the supervisory board of the new NATO innovation fund. The defense alliance announced this on Monday.

With one billion euros, NATO member states want to finance start-ups in the field of security and defense over the next 15 years. In addition, money from the budget should flow into venture capital funds that specialize in such companies. In Europe in particular, start-ups that develop dedicated military applications have so far been rare.

But the war in Ukraine shows the enormous importance of new technologies in warfare: Without “battle management” software, satellite internet, drones and cloud technologies, Ukraine would probably have long since been defeated by Russian tanks and rocket attacks.

From Hommels’ point of view, the new fund is all the more important: “The NATO Innovation Fund is the first multi-state venture capital fund that will promote new technologies and urgently needed innovations that affect the strategic goals of the alliance,” he said of his appointment.

What is striking about the list of 22 member nations that approved the fund at the NATO summit last June: it is exclusively European countries, including Germany and the Netherlands, where the fund’s headquarters are to be located.

The US is not included. Well-known security and military technology companies such as Palantir and Anduril have emerged from the start-up and venture capital scene there. Canada is not yet involved either.

AI, space travel and autonomous systems: Focus on key technologies

A new investment management arm of NATO will be created for the fund. Hommel’s tasks should include developing an ecosystem in which young companies and customers – i.e. the European armed forces – come together. Two personnel consultancies are currently still looking for candidates for a team that will manage the fund operationally and make investment decisions.

The innovation fund should focus on key technologies such as artificial intelligence (AI), quantum technologies, the analysis of big data, autonomous systems, new materials, biotechnology, energy, propulsion technology and space travel.

As an investor, Hommels is well versed in many of these topics: The portfolio of his venture capital company Lakestar includes the Munich-based rocket company Isar Aerospace, Germany’s leading AI start-up Aleph Alpha from Heidelberg, the Swiss drone software company Auterion and the quantum technology company Terra Quantum, which also based in Switzerland. All of these companies are developing “dual use” technologies that can be used for both civilian and military purposes.

However, Hommels cannot invest in start-ups with its venture capital fund if they have already clearly positioned themselves as armaments companies. Because the investors in his fund also include churches, for example, who have ruled out such investments. Other investment firms in Europe also follow similar guidelines.

The NATO Innovation Fund is the first multi-state venture capital fund that will support emerging technologies and much-needed innovations that touch on the Alliance’s strategic goals. Investor Klaus Hommels

Investments in military-related investments have been discussed with increasing openness since Russia’s invasion of Ukraine. The Berlin early-stage investor Project A, for example, has decided to invest in Quantum Systems. The Munich start-up supplies its drones to the Ukraine, among other places, where soldiers use them to scout out Russian positions.

Ex-armaments manager and economics professor support Hommels

In the venture capital scene, Hommels is known for working with political institutions in Berlin and Brussels, for example, to ensure that key technologies in particular are given more support. He sees many of his investments as being guided by the mission of making Europe more technologically independent or even sovereign. He advises numerous initiatives, including the Munich Security Conference as a member of the “Security Innovation Board”.

Hommels is supported in his work at the NATO Innovation Fund by two other members of the supervisory board who have good contacts in science and the armaments industry: Fiona Murray and Roberto Cingolani. An economics professor, Murry is, among other things, Associate Dean for Innovation and Inclusion at the College of Management at the renowned Massachusetts Institute of Technology (MIT) and Co-Director of MIT’s Innovation Initiative. From 2019 to 2021, Cingolani was head of technology and innovation at the Italian armaments group Leonardo and then minister for ecological change in Mario Draghi’s cabinet for a year.

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