How the NATO DIANA Accelerator works: Phase 1 vs Phase 2 funding explained

If you are building technology for both civilian and defence use, the NATO DIANA Accelerator is a valuable source of early-stage funding and proof for your idea. Many Canadian founders ask: What is the real difference between Phase 1 and Phase 2 funding? How do you move from one to the other? The answer affects the amount you can receive, how long you stay in the program, and how fast you can grow your technology.

The NATO DIANA (Defence Innovation Accelerator for the North Atlantic) program is open to innovators from NATO member countries, including Canada. It focuses on advanced technology solutions that answer specific NATO Challenges (Source: NATO DIANA Accelerator).

Understanding the NATO DIANA Accelerator structure

The NATO DIANA Accelerator is a two-phase program. Each phase has its own goal, funding amount, and selection process.

According to NATO’s official program page (Source), the funding is structured as follows:

Phase 1 Accelerator Programme: $100,000
Phase 2 Accelerator Programme: Up to $300,000
Total possible funding: Up to $400,000 across both phases

Both phases offer non-repayable funding. You must meet technical and commercial milestones to progress.

What NATO DIANA is designed to fund

Your project must address a NATO DIANA Challenge. Current challenge areas include:

Energy and power
Advanced communication technologies
Contested electromagnetic environments
Human resilience and biotechnology
Operations in extreme environments
Maritime operations
Resilient space operations
Critical infrastructure and logistics
Autonomy and unmanned systems
Data-assisted decision making

Your technology must be useful for both civilian and defence purposes. It cannot be only for defence or only for civilian use.

Who should apply for the NATO DIANA Accelerator

The NATO DIANA Accelerator is a good fit for:

Startups and small businesses working on advanced technology in a NATO Challenge area
Companies that can show their technology is useful for both civilian and defence sectors
Teams with a working concept, prototype, or early product who want to test and grow their solution
Innovators interested in working with defence partners and expanding internationally

If you are not sure if your company is eligible, tools like GrantHub’s eligibility matcher can help you filter programs by technology area and business stage.

Phase 1 funding: Prove your technology works

Phase 1 is about showing your idea works.

If selected, your business receives $100,000 in non-repayable funding and joins the first part of the accelerator (Source). This phase is competitive and many applicants do not move forward.

What Phase 1 funding is used for

Phase 1 funding usually supports:

Building or improving a prototype
Technical proof-of-concept work
Early testing and validation
Getting your solution ready for defence use cases

You also join NATO DIANA’s accelerator network. This may include access to test centres, mentors, and defence experts, depending on your challenge area.

Who Phase 1 is best for

Phase 1 is a good choice if:

You have a working concept or early prototype
Your technology matches a NATO Challenge
You can show potential for both civilian and defence uses
Your company is pre-revenue or just starting to earn revenue

Phase 2 funding: Scale and show real impact

Phase 2 is not automatic. Only some Phase 1 participants are invited to continue.

If selected, you can receive up to $300,000 in extra non-repayable funding (Source). This funding helps you move from testing to real-world use.

What Phase 2 funding supports

Phase 2 funding is used for:

Advanced testing and demonstration
Scaling your technology
Using feedback from defence users
Getting ready for sales, partnerships, or more investment

At this stage, NATO looks for proof that your technology works, your team can deliver bigger projects, and your company is ready for defence settings.

How you move from Phase 1 to Phase 2

You must:

Meet technical milestones
Show defence relevance
Prove your solution can grow
Have a strong and ready team

Phase 2 is where the program attracts more attention from investors and strategic partners.

Key differences: Phase 1 vs Phase 2 funding

Funding amount:
- Phase 1: $100,000
- Phase 2: Up to $300,000
Goal:
- Phase 1: Prove your idea works
- Phase 2: Scale and show real-world results
Risk level:
- Phase 1: Higher technical risk is accepted
- Phase 2: Lower risk, more proof needed
Selection:
- Phase 1: Competitive open call
- Phase 2: By invitation only from Phase 1 group

Common mistakes to avoid

Thinking Phase 2 is guaranteed:
Phase 2 is competitive. Treat Phase 1 as a test, not a sure thing.
Applying without a clear case for both civilian and defence use:
Products for only one market rarely succeed. Explain how your technology fits defence needs.
Not having clear technical milestones:
NATO wants to see real progress. Vague R&D plans weaken your application.
Ignoring your business plan:
Good technology is not enough. Phase 2 decisions also look at your ability to grow and sell.

Frequently Asked Questions

Q: Can Canadian startups apply for the NATO DIANA Accelerator?
Yes. Canadian companies can apply because Canada is a NATO member country (Source).

Q: Is NATO DIANA funding repayable?
No. Both Phase 1 and Phase 2 are non-repayable grants. Grant income may still be taxable depending on your company’s structure (Source).

Q: How competitive is Phase 2 selection?
Not all Phase 1 participants move forward. Selection depends on your results, defence relevance, and potential to grow.

Q: Do you need defence customers before applying?
No, but you must show clear defence uses. Existing pilots or partnerships help your application.

Q: Can you combine NATO DIANA funding with Canadian grants?
Often, yes. Stacking rules depend on each program’s terms and total government support limits.

GrantHub tracks grant programs across Canada — you can check which ones match your business.

Next steps

If you are interested in the NATO DIANA Accelerator, start by matching your technology to a NATO Challenge and decide which phase fits your stage. Many Canadian companies use DIANA funding along with other Canadian innovation and defence programs. GrantHub can help you find these options and see how accelerator funding fits your growth plan.

See also:

How Canadian Defence Innovation Funding Supports Uncrewed Systems and Advanced Technologies
Startup Accelerator Readiness in Canada: Are You Ready to Apply?
What Do Startup Accelerators Offer Beyond Funding?

How the NATO DIANA Accelerator works: Phase 1 vs Phase 2 funding explained