Two Canadian companies have been selected for the second phase of a NATO defence tech accelerator program that aims to develop dual-use technologies.
Outside of Canada, investors have increasingly poured money into defence tech.
Longueuil, Que.-based Reaction Dynamics and Ottawa-based Tactiql have advanced to Phase 2 of NATO’s Defence Innovation Accelerator for the North Atlantic (DIANA), and will each receive 300,000 euros ($482,000 CAD).
Just 15 companies advanced to Phase 2II of DIANA, narrowed down from 76 finalists and 2,600 proposals from global defence tech companies. DIANA aims to support the development of technologies with military and civilian uses across NATO member countries, and to facilitate their adoption. The accelerator offers access to NATO test centres, an investor network, mentoring from industry and procurement partners, and sales opportunities.
Aerospace and defence company Reaction Dynamics was selected for DIANA’s critical infrastructure category. It develops rocket engines and launch vehicles with a focus on environmentally friendly propulsion systems.
Reaction Dynamics was featured in the BetaKit Most Ambitious issue for its development of a hybrid propulsion rocket, as well as its plans to handle Canadian satellite deployments. It recently signed an agreement with Halifax-based Maritime Launch Services (MLS) to launch a rocket into orbit in 2028 from a planned Nova Scotia facility.
Ottawa-based Tactiql was selected for DIANA’s data and information security category. Founded in 2022 by Canadian Armed Forces veteran Michael Nelson, the company’s software collects and centralizes data from intelligence, surveillance, and reconnaissance (ISR) sensors during military operations. ISR sensors, which can be found on different types of military hardware, are used to surveil and identify threats or targets. Tactiql has so far been awarded two Canadian government research contracts worth nearly $4 million, according to procurement records.
According to a pop-up on Tactiql’s website, the startup is “currently in stealth mode” and is purposefully keeping its website vague. Tactiql did not respond to a request for comment before press time.
Canadian investors have increased their interest in defence tech in recent months. The country’s most active venture capital (VC) investor, the publicly funded Business Development Bank of Canada (BDC), told BetaKit this week it plans to fund defence tech in a “more aggressive way.”
The majority of the startups in BDC Capital’s Deep Tech Venture Fund portfolio are already developing dual-use solutions with both civilian and defence applications. BDC CEO Isabelle Hudon revealed that BDC—which has planned to launch a successor to its first deep tech fund—is currently revising the name, mandate, and size of that investment vehicle to focus on defence tech.
Prime Minister Mark Carney has pledged to increase national defence spending to the new NATO target of five percent of annual gross domestic product by 2035. This includes 3.5 percent of GDP for core military capabilities, such as “modernizing [Canada’s] military equipment and technology.”
Outside of Canada, investors have increasingly poured money into defence tech—a broad category which can include surveillance and intelligence software, armoured vehicles, drone technology, and lethal weapons. According to US Pitchbook data, VC investment in defence tech in 2025 reached a new peak of over $7 billion invested, which is more than four times the level of investment in 2022.
Feature image courtesy Reaction Dynamics via LinkedIn.