British defence unicorns awarded new MoD contracts

Above: Chris Isaac, CEO & Founder of SpaceAM Autonomous Machines, one of the 13 British defence unicorns awarded new MoD contracts.
Courtesy SpaceAM
 
The new scheme gives accelerated contracts to small, innovative British companies who have done limited or no previous business with the Ministry of Defence. 

More than half of winning firms are new to defence, with contracts awarded to companies from across England, Wales and Scotland, less than four months since the new ‘defence unicorn’ fund was announced. 

The 13 innovative British companies have been awarded contracts to develop cutting-edge technology for the UK’s Armed Forces as part of the Government’s work to open up new routes for small and growing businesses into the defence sector and deliver on the government’s Industrial Strategy. 

The announcement came as the Defence Secretary John Healey MP addressed the Good Growth Foundation on Tuesday (19th May), arguing that Britain’s record defence investment must come with a back British pledge to boost UK jobs and innovation. He will tell the audience that today’s contracts are just the start of that approach. 

The contracts – the largest worth £4 million – have been awarded through Commercial X, the Ministry of Defence’s accelerated contracting vehicle, as part of the government’s search for Britain’s next defence unicorn.  

The contracts underline the Government’s focus on moving at pace, getting contracts to innovative British businesses faster than traditional procurement routes allow and getting innovative new kit into the hands of UK Armed Forces.  

The contracts support jobs in communities across Britain including Devon, Edinburgh, Newport in Wales and West Yorkshire. All the companies were founded after 2011 and the vast majority started in the last six years. 

Defence Secretary John Healey MP said: "This government is backing British innovators and entrepreneurs, doing things differently to deliver for our forces. 

"These are contracts, not words or promises and they mean that thirteen British companies, many of them new to defence, are receiving real investment to develop the technology our Armed Forces need. This is defence delivering growth right across the country. 

"These companies may be small but they all have the potential to become billion-pound FTSE 100 firms."

Director of The Good Growth Foundation (GGF) Praful Nargund said: "Our research shows that to build a defence settlement that lasts, the public needs to see the benefits of defence spending brought home to the UK. Pounds spent on defence must do double duty, protecting both our national security and our economic security. 

"Today’s announcements are a step towards bringing defence home: backing the British Innovators who will build our sovereign capability, keep the returns here and create the defence industry Britain needs for a more dangerous world. 

"SMEs have the potential to be the heart of innovation in Britain, and it is only by backing SMEs that you build the domestic supply chain resilience that sovereign capability depends upon. Yet too often they are locked out of defence contracts and defence investment flows overseas rather than building resilience in Britain. By backing our innovators, giving them the contacts and capitals to grow, we can create the conditions to build Britain’s next defence unicorn."

The winning companies span a wide range of cutting-edge capability areas, from quantum sensing and autonomous systems to secure communications, space manufacturing and synthetic training. Together they represent the breadth and depth of British defence innovation – from established businesses scaling up to newer firms entering the sector for the first time. 

The 13 contracts are with: 

• The RC Den Ltd (London) 
• Aquark Technologies Ltd (Hampshire) 
• Aether Aerospace Ltd (Newport, Wales) 
• SpaceAM Ltd (London) 
• Avenue 3 Ltd (West Yorkshire) 
• Nereus Medical Ltd (Devon) 
• Kraken Technology Group (Hampshire) 
• Flowcopter Ltd (Edinburgh) 
• Helyx Secure Information Systems Limited (Buckinghamshire) 
• EP90Group Ltd (Winfrith Newburgh, England) 
• Ritson Reid Ltd (Berkshire) 
• SimCentric Limited (Oxfordshire) 
• Spectra Group (UK) Ltd (London) 

The awards are part of the government’s commitment to make Britain the best place to start and grow a defence business. Backed by the MoD’s commitment to increase defence spending with small and medium-sized enterprises by 50% through to May 2028 – an additional £2.5 billion,  bringing total SME spend to £7.5 billion – the fund forms part of a wider package of reforms to open defence up to the next generation of British innovators. 

This Government is backing UK Armed Forces with the largest sustained increase in defence spending since the end of the Cold War – hitting 2.6% of GDP from 2027. 

Commercial X, a specialist function within the UK Ministry of Defence designed to accelerate the procurement of digital technologies and ground-breaking innovations, led the search for winning companies, assessed applicants against the requirements of the UK Armed Forces across a range of technology and capability themes, including AI and machine learning, robotics and autonomy and precision capabilities. 

The contracts provide winning companies with a foundation to attract further private investment, helping them scale rapidly and realise their full potential. The fund sits alongside the MoD’s new Office of Small Business Growth, which provides a single point of access for SMEs looking to work with defence, as well as the recently held Dragons’ Den-style event connecting defence innovators with private investors. 

Phil Bottomley, CEO, Avenue3 said: "As an SME, this level of investment is transformative. It allows us to grow sustainably, create high-value jobs and continue delivering complex engineering programmes at pace. It’s a strong signal of the role that smaller, specialist companies like Avenue3 can play in supporting national priorities while driving local economic growth."

SpaceAM, founded in the South West and focused on the synergy between hardware, software and IA, sees its selection as a vote of confidence in homegrown British technology to deliver for the Armed Forces and to keep the economic returns of defence spending here in the UK. SpaceAM will use the contract to accelerate development of its core capability, expand its UK engineering and operations team and bring further commercial and dual-use applications of its technology to both the space and remote sensing market. The company expects to make further announcements on hiring, partnerships and investment in the coming months.

Since the contract award, SpaceAM has moved at pace. Chris Isaac CEO and Founder, SpaceAM said: "Game changer. In just five weeks, six new staff, our first commercial labs operational, top London VCs lining up to invest and the ability to scale at pace with confidence. That’s what this Unicorn Fund has delivered."