Keen Venture Partners publishes the founder’s guide to German defence procurement.
Germany will spend EUR108 billion on defence this year and EUR162.9 billion by 2029. For the first time, Germany has built a defence structure to make the budgets more accessible to new founders. The third white paper in Keen“s European procurement series maps what the 2024-2026 reforms changed, the two innovation bodies that sit around it, and the four mistakes that kill defence tech companies before they ever reach a contract.
For most of the last decade, a founder could demonstrate a working prototype to German soldiers, impress them, and still be nowhere near a contract eighteen months later, with no one to name as the person who was supposed to sign it. The gap between the end user and the budget is the problem that Germany has spent the last two years dismantling.
The scale of the reforms is easy to underestimate. Since the 2022 Zeitenwende, Germany has reversed decades of decline: EUR108 billion in total defence spending for 2026, an Einzelplan 14 rising to EUR162.9 billion by 2029, and new NATO Capability Targets adopted in June 2025. But the budget is the least interesting part. In the last 2 years the Bundeswehr has replaced its procurement process, passed the most significant procurement reform in decades, „the Gesetz zur beschleunigten Planung und Beschaffung für die Bundeswehr“ (BwPBBG), in force since 14 February 2026, and opened a 330-person innovation centre with in-house labs, tripled the mandate of its cyber innovation hub and began applying a national security exemption that had barely been used in the country“s history. Meanwhile, Munich has arguably emerged as Europe’s leading defence tech hub.
The doors are real and they are more open than they have been. What has not caught up is the map for the way in: most of what founders read today still describes the old system, and the two entry points built specifically for early-stage companies are the least understood parts of the entire structure. This whitepaper aims to fix that.
Today Amsterdam- and London-based venture capital firm Keen Venture Partners released „Navigating German defence procurement: A founder“s practical (and surely incomplete) guide to the Bundeswehr procurement landscape.“ It follows the Dutch edition published in June 2026 and the UK edition in July 2026, and is the third in a series through which Keen intends to map the procurement system of every European NATO ministry of defence, with the aim of creating a faster, stronger, and more united Europe.
The three structural walls
The paper highlights that the remaining friction is architectural rather than political. Below are three features of the system that a budget increase alone does not resolve, and that founders need to plan around:
– Personal liability. Once a project reaches the BAAINBw, the responsible project leader carries personal procedural and budgetary accountability. The system tells project leaders to enable innovation but gives them no legal safe harbour when an experimental choice fails. Rational people then buy from Rheinmetall, Airbus DS and Hensoldt.
– The EUR432k tendering threshold. Above it, EU procurement rules apply. Article 346 TFEU offers a national security exemption, and several NATO partners use their equivalents routinely. Germany has applied it cautiously, the Helsing, Stark and Rheinmetall contracts were the first broad applications in the country’s history involving startups.
– The EUR25M parliamentary threshold. Contracts above EUR25 million need Budget Committee and Defence Committee approval, and that happens at the very end, after negotiations are closed and contracts are ready to sign.
What actually changed in 2026
The paper’s central practical claim is that two institutions have quietly rewritten the entry map for startups, and neither is yet widely understood:
– The Innovationszentrum der Bundeswehr (InnoZBw), opened in Erding in February 2026 under Flottillenadmiral Christian Bock, with more than 330 staff and in-house labs working on AI, drones and emerging technology. It is the only place in the Bundeswehr with that concentration of hands-on technical expertise, it is embedded at leadership level within BAAINBw, and it will engage a company at concept stage so founders can bring a laptop, demonstrate an idea, and get real technical feedback. It operates three funding tiers without any formal procurement project: up to EUR500M a year in F&T research funding, operational-experimental purchases for troop testing, and initial capability purchases of 1,000+ units.
-The Cyber Innovation Hub (CIHBw), whose budget rose to EUR40M for 2026 under a new initial scaling mandate explicitly designed to bridge the valley of death. It has 217 projects launched to date, 80 MVPs tested by the Bundeswehr, 52 solutions still in active service.
Alongside them sits the Innovationspartnerschaft, which is deemed the golden ticket: the Bundeswehr funds a startup to develop a technology for an identified capability gap, then buys the output and the startup keeps its IP. It applies below TRL 8, and as of mid-2026 it is only just beginning to be used in practice.
Four places founders get stuck
The guide sets out the failure modes it sees repeatedly: underestimating what military-scale deployment demands (rain, mud, a three-metre drop, an operator with two days of training); having no lobbying infrastructure, when formal engagement needs to start 18-24 months before a requirement exists; not being delivery-ready, because a five-person team that cannot ship 1,000 units in 18 months will lose the contract it wins; and misjudging the structural preference for primes.
Founder quotes
„Germany’s main procurement agency, the BAAINBw, works at scale but takes years. Faster paths to a first contract run via the Special Task Force Ukraine, initiatives like the Drone Coalition, or B2B partnerships with established system integrators and partners in Ukraine. You also get much shorter feedback loops with operators along the way, and that’s what turns a prototype into a real capability.“
– Benjamin Wolba, Co-Founder & CEO, European Defense Tech Hub (EDTH)
„Germany“s defence procurement system can be difficult to navigate, especially for startups. This white paper provides something founders genuinely need: a practical map of the system, its key players and the pathways that can turn innovation into an actual Bundeswehr capability.“
– Jan P. Schween, Head of Sales & Co-founder, SWARM Biotactics
„Germany has committed more money to defence than any European country and has spent the past two years building the structures to spend it differently. Both of those things are true and neither are widely understood. We wrote this paper because it is the diligence we wished existed when we just started backing this sector; not just what has been committed, but how to reach it, including the parts of the process that still slow founders down.“
– Alexander Ribbink, General Partner, Keen Venture Partners
Keen Venture Partners notes that the paper reflects its own interpretation, not an official position, and that in a system changing this quickly it will contain mistakes. „We tried hard to be precise and complete, but we will have missed or misunderstood some structures and links. Please shout, and help us improve.“
Availability. The full white paper is available on request via defence@keenventurepartners.com and via the link distributed alongside this release: https://mailchi.mp/a94b7dd5adb1/wcmmvwiutd
Keen Venture Partners is a venture capital firm based in Amsterdam and London, backing exceptional European founders from seed to Series B across software, deep tech, defence, space and security. Keen’s EUR200M European Defence Space & Security Fund is Europe’s first dedicated defence fund and proud to receive backing from a wide range of limited partners including banks, high-net-worth individuals, family offices, pension funds, defence R&D institutions and the EIF European Defence Facility. The fund is supported by a European-wide advisory board that includes former NATO Secretary General Jaap de Hoop Scheffer, alongside senior military leaders, policymakers, and defence industry veterans. Keen will use its network across the different MoDs and the defence industry to stimulate and drive adoption, supporting portfolio companies in validating and expanding their traction.
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