Helsinki, Finland – October 15, 2025 – Varjo, the global leader in military-grade virtual (VR) and mixed reality (XR) solutions, today announced a EUR 44 million research and development initiative to accelerate the development of advanced, next-generation XR training systems for governments and industry partners worldwide. Business Finland has awarded EUR 12 million in funding to support the R&D program that will focus on advancing Varjo’s next-generation mixed reality platform for modern training applications.
Varjo, already a trusted partner in over 100 defense and aviation programs worldwide, generates nearly all of its revenue from exports. In 2024, 98% of Varjo’s revenue was generated outside Finland. The funding allows Varjo to expand its role as a strategically important technology provider for NATO and its allied countries.
“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. 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,” said Lassi Noponen, Director General of Business Finland.
“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,” said Timo Toikkanen, CEO of Varjo.
Varjo’s next-generation solutions will directly address the evolving training requirements of modern defense forces. They will support personnel training across multiple military training formats and domains, such as fixed-wing and rotary aircraft, naval vessels, armoured vehicles and other ground systems. This wide range of defense use cases will be enabled by advancing system architecture, product features, ergonomics, and security of Varjo’s products. Importantly, the solutions will also be developed to allow training systems to be deployed closer to the battlefield when required.
Finland has a strong foundation in VR and XR technologies, supported by research and a versatile corporate ecosystem. As one of Business Finland’s focus industries, immersive technologies are expected to drive growth across several new business verticals over the next decade.
“Business Finland has been a part of Varjo’s growth story from the very beginning – not only through high-technology R&D funding, but also via the Young Innovative Companies program and our internationalization services. Varjo represents world-class expertise, demonstrating how a systematic investment in innovation can elevate a Finnish company to a global technology leader. Business Finland is proud to support Varjo in making Finland the home of the world’s most advanced defense XR technology ecosystem,” Noponen added.
About Varjo
Varjo is the world-leading provider of military-grade virtual and mixed reality solutions, delivering the highest levels of immersion, performance, and security for the most demanding defense and aerospace customers globally. Already used in over 100 defense and aviation programs worldwide, we are known for virtual and mixed reality that look and feel as real as the real world, allowing modernizing training across land, sea, air, and beyond.
Our hardware and software solutions integrate with the world’s largest ecosystem of professional 3D software, image generators, and advanced simulator hardware. With Varjo’s offering, including the latest XR-4 Series and the TAA-compliant XR-4 Secure Edition, our customers can recreate the exact feeling and conditions of real life in 3D, allowing them to train faster, better, and more cost-effectively.
