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Defence Industry Minister Pat Conroy has moved to unlock new sources of private capital for the nation’s defence industry, calling for proposals from the venture capital market to co-invest in Australian companies developing next-generation defence and dual-use technologies.
In a move aimed at accelerating sovereign industrial capability, the Australian government has opened a request for expressions of interest (REOI) seeking one or more private capital partners to help channel investment into Australia’s growing defence innovation ecosystem.
The initiative comes as the Albanese government continues to lift defence spending and deliver record investment in domestic industry, as part of a broader effort to strengthen Australia’s ability to design, build and sustain critical capabilities at home.
Under the proposal, the government is considering co-contributions of up to $500 million, to be invested alongside private capital into Australian businesses developing advanced and export-ready technologies. Final investment decisions and terms would be determined in partnership with the selected fund manager or managers and remain subject to further government consideration.
Minister Conroy said the move recognised the strategic importance of mobilising private capital in an increasingly contested global environment, saying, “Australia’s current strategic environment tells us that we need to do all we can to drive investment in new capabilities. Joint investment between the government and private sector has enormous potential to unlock Australian jobs and innovation.”
Targeted capability areas include cyber security, artificial intelligence and autonomous systems, electronic warfare, quantum technologies and undersea warfare – all seen as critical to Australia’s future military edge and increasingly central to allied defence supply chains.
Defence officials said investing in advanced capabilities with export potential is key to building a larger, more resilient defence industrial base. By backing Australian firms early, the government aims to grow local supply chains, support high-skill jobs and reduce dependence on overseas suppliers in strategically sensitive areas.
The REOI is now open via AusTender, with interested private capital firms invited to submit proposals outlining how they would manage and deploy the co-investment funding.
Once selected, successful firms will work closely with Defence to further develop an investment proposal for government consideration, including governance arrangements, investment focus areas and mechanisms to support Australian small and medium enterprises.
Minister Conroy added, “In developing potential options for co-investment, the government is looking for ways to grow Australia’s defence industry and put money back into Australian pockets. The government will explore options to partner with private capital to invest in eligible Australian small and medium enterprises that are developing the capabilities we need.”
The initiative directly reflects commitments made in the Defence Industry Development Strategy 2024, which emphasises deeper collaboration with venture capital and institutional investors to scale Australian businesses developing critical defence technologies.
Stephen Kuper
Steve has an extensive career across government, defence industry and advocacy, having previously worked for cabinet ministers at both Federal and State levels.
