The Australian Government has announced a new move to co-invest alongside private capital to accelerate the growth of homegrown defence and dual-use technologies. Rather than launching a fund outright, the government has opened a formal Request for Expressions of Interest (EOI) seeking private capital partners to help design and manage a potential co-investment vehicle. The initiative signals a stronger push to scale sovereign capability through collaboration with experienced investment managers.
A Targeted Co-Investment Approach
The proposal centers on working with one or more private capital partners to invest in Australian small and medium-sized enterprises developing technologies aligned with national defence priorities. The government has indicated it could commit up to A$500 million, with final terms to be developed in consultation with the selected partner and subject to further government consideration.
The focus areas are explicitly strategic. Priority sectors include cyber security, artificial intelligence and autonomy, electronic warfare, quantum technologies, and undersea warfare capabilities. These domains are viewed as critical to strengthening Australia’s defence posture and reducing reliance on foreign supply chains.
Leveraging Private Capital Expertise
Instead of directly deploying capital itself, the government is seeking proposals from established investment managers with experience operating in Australia’s innovation ecosystem. The selected firm or firms would be responsible for structuring and managing investments into eligible companies, aligning commercial discipline with national strategic objectives.
This structure is designed to combine public capital with private sector market insight, ensuring investments are commercially sound while also advancing sovereign capability. By working through professional investors, the government aims to catalyze growth, accelerate commercialization, and unlock export potential for high-impact Australian technologies.
Strengthening Sovereign Industrial Capability
The initiative aligns with the broader Defence Industry Development Strategy and reflects a more deliberate approach to nurturing a resilient domestic defence technology base. Minister for Defence Industry Pat Conroy emphasized that partnering with private capital can help drive innovation, create high-value jobs, and support Australian businesses to scale globally.
Importantly, the current announcement represents the opening of the EOI process rather than the launch of a finalized investment fund. Detailed design, governance, and capital structure will be shaped through engagement with selected partners before final approval.
By blending public commitment with private investment expertise, the government is positioning this model as a catalyst for long-term capability building. If executed effectively, the co-investment framework could accelerate the development of critical technologies while reinforcing Australia’s strategic and industrial resilience.