Funding of £20m set to find Britain’s next defence unicorn
Above: UK Defence Secretary John Healey MP speaking to defence industry and innovators at the annual ADS dinner on Tuesday.
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The fund is part of the government’s commitment to make Britain the best place to start and grow a defence business. A unicorn company is a privately held start up valued at over US$1 billion. The contracts agreed through the fund will help accelerate new defence technology to the UK’s Armed Forces and gives exciting new companies the foundation and confidence to raise private capital to expand more rapidly. To access the fund, businesses must be fully or part UK-owned.
Speaking to defence industry and innovators at the annual ADS dinner on Tuesday, Defence Secretary John Healey MP (above) celebrated the fact that the UK has some of the best big defence businesses in the world - many of which started decades ago with an idea - and have grown to create thousands of good jobs, thriving communities and strengthened Britain’s national security.
As set out in the Defence Industrial Strategy, defence is an engine for growth and small businesses are the backbone of UK defence, bringing the innovation, agility and fresh thinking that UK Armed Forces need to transform and stay ahead of increasing and evolving threats.
Defence Secretary John Healey MP said: "I am determined to make Britain the best place in the world to start and grow a defence business and our military the fastest innovating in NATO.
"Backed by our record sustained increase in defence spending, we are delivering good jobs and growth across the UK by opening up new routes into the defence sector, giving small British-based businesses the jumpstart they deserve.
"If our entrepreneurs are willing to take chances, we must be willing to take them too. This is about a Britain that rewards risk takers and innovators and gives people the belief that this government will back them."
This work demonstrates how the government is supporting the next generation of defence leaders and innovators by backing the British defence tech sector as the Ministry of Defence delivers on the Strategic Defence Review commitment to make the UK Armed Forces the most innovative military in NATO.
Contracts awarded through the new fund will be driven by the requirements of the UK Armed Forces, led by UK Defence Innovation (UKDI). UKDI will lead the search for the best UK technology to exploit which is broken into sets of technology and capability themes, including AI, Machine Learning & data science, robotics & autonomy and Enhanced Precision Weapons
The fund, which comes alongside the £400 million ringfence for novel technology and the commitment to spend an additional £2.5 billion with SMEs through to May 2028 - taking MoD’s total SME spend to £7.5 billion - is in addition to a new ‘Dragon’s Den’ style event for Defence tech companies. The event aims to provide seed funding for new and novel ideas at an earlier stage of development, before businesses have got off the ground and will bring in the MoD’s Defence Investors’ Advisory Group - the first of its kind - to connect companies to private financing.
These efforts are part of the Defence Secretary’s drive to ensure the benefits of the government’s record sustained increase in defence spending can be captured by aspiring British entrepreneurs and will helps to ensure those with exciting ideas and innovations that benefit UK warfighters aren’t locked out of the defence sector because of a lack of funding or contracts.
The Ministry of Defence has introduced new 'Lite' Enterprise Agreements to support software and AI companies grow by reducing commercial barriers. These new agreements with companies including Adarga, Hadean, Oxford Dynamics and WhiteSpace were announced last year when John Healey MP became the first Defence Secretary to close trading at the London Stock Exchange.
The search for defence’s next unicorn comes as the Ministry of Defence launch the new Office of Small Business Growth to make it easier for SMEs to navigate the MoD procurement system and bring in new suppliers. The new office recognises that defence procurement has been too slow and complex to navigate and will help to resolve these challenges to deliver real change to how the MoD procures - breaking down barriers and opening new avenues for innovation to ensure that SMEs can play a vital role in making Britain secure at home and strong abroad.
