NATO Fund Backs UK Materials Startup Targeting Space, Cars

(Bloomberg) -- The North Atlantic Treaty Organization’s €1 billion ($1.1 billion) technology fund invested in a UK startup that makes lightweight materials for spacecraft, cars and the defense sector, marking the first time it has publicly participated in a funding round.

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IComat closed a Series A funding round co-led by 8VC and the NATO Innovation Fund, raising $22.5 million in capital, the startup said in a statement on Wednesday.

The company, formed in 2019, says its innovative use of carbon fiber can help reduce weight by as much as 65% compared to existing state-of-the-art commercial solutions for material used in everything from fighter planes to Formula 1. Lighter vehicles help cut emissions and are in demand for rocket launches, with Europe’s space industry lagging the US and other countries.

The startup is building a 45,000-square-foot production facility in Gloucester, UK in order to manufacture composite materials that it says are stronger, lighter and cheaper than traditional ones used for aerospace and automotive vehicles.

IComat is a spinout from the University of Bristol. Its chief executive officer Evangelos Zympeloudis previously founded composite materials company Nima Composites, focused on the consumer electronics industry.

NATO launched its inaugural Diana tech incubator and the NIF in 2023. The fund, which is financed by 24 of the 32 nations in the military alliance, seeks to support new businesses in defense, cybersecurity and related fields at a time of rapid innovation on the battlefield following Russia’s invasion of Ukraine. It has invested in venture capital firms that back early-stage companies, but has not previously disclosed any direct deals.

NIF has said that it will prioritize companies with “dual-use” technology that sells into both defense and commercial industries.

(Updates with background in the fifth paragraph.)

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