What’s the story?
Varjo has launched a €44M R&D program, with €12M from Business Finland, to advance mixed reality defense training.
Why it matters
The investment reinforces Varjo and Finland’s standing in defense XR and advances secure, next-generation military training.
The bigger picture
Varjo’s R&D push highlights Europe’s growing role in developing sovereign defense technologies for NATO and allied nations.
October 15, 2025 – Varjo, a provider of military-grade virtual and mixed reality (XR) solutions, has announced a EUR €44 million research and development initiative aimed at advancing next-generation XR training systems for government and industry partners.
As part of this effort, Business Finland has awarded EUR €12 million in funding to support Varjo’s R&D program focused on developing its next-generation mixed reality platform for modern training applications. Varjo stated that the new funding will help the company expand its role as a technology provider for NATO and allied countries.
According to Varjo, its technology is currently used in over 100 defense and aviation programs worldwide. The company added that the majority of its revenue comes from exports, with 98% of its revenue generated from outside Finland in 2024.
The R&D program will address what Varjo stated are the evolving training requirements of modern defense forces, and will enable a range of use cases by advancing the company’s system architecture, product features, ergonomics, and security of its products.
As such, Varjo noted that its solutions will help support personnel training across a range of military domains, including fixed-wing and rotary aircraft, naval vessels, armored vehicles, and other ground systems, with the goal of enabling training systems to be deployed closer to operational environments when needed.
“Our allies’ security and defense forces need new solutions that improve training, decision-making, and resilience. The funding will not only accelerate Varjo’s global expansion but also ensure that the innovation and technological know-how generated by Varjo will benefit our economy,” said Lassi Noponen, Director General of Business Finland. “By fostering world-leading defense innovation and supporting a robust XR technology ecosystem, we are ensuring our ability to lead in the fast-growing defense technology industry.”
Timo Toikkanen, CEO of Varjo, added, “The research and development funding from Business Finland acts as a significant lever for Varjo’s own R&D investments. With Business Finland’s support, we can scale our research and development faster and respond to rising international demand, while keeping our core R&D capabilities firmly rooted in Finland. The program ensures Finland remains a source of world-class defense innovation and provides our allies with secure and sovereign training technologies for the future.”
Varjo highlighted Finland’s strong foundation in VR and XR technologies, which is supported by research and a “versatile corporate ecosystem.“ Immersive technologies are also a focus area for Business Finland, with growth expected across new business verticals in the coming years.
For more information on Varjo and its military-grade XR solutions, please visit the company’s website.
Image credit: Varjo
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Sam is the Founder and Managing Editor of Auganix. With a background in research and report writing, he has been covering XR industry news for the past seven years.