The fund specifically targets small, UK-owned companies that are new to defence. 

The UK Ministry of Defence (MoD) established a GBP20 million fund to enable small tech startups to accelerate their technologies in defence on 28 January. 

Framed as a search for the country’s next defence unicorn – a small, private company valued at over USD1 billion – the fund aims to offer startups accelerated contracts that have limited or no business with the MoD.  

By doing this, the MoD hopes it will spur investment from private capital, thereby creating the conditions for the next unicorn, DSEI Gateway understands. 

The fund’s focus is on the “tech of tomorrow”, with specific requirements being outlined by UK Defence Innovation under specific capability themes, according to the MoD.  

These include “AI, machine learning and data science, robotics and autonomy, and enhanced precision weapons”. 

It comes just days after the MoD established a new Office for Small Business Growth in an attempt to reverse historically low spending with small businesses and provide them with greater support. 

The department also plans to launch a new innovation showcase event in the style of ‘Dragon’s Den’, where the MoD’s Defence Investors’ Advisory Group will provide seed funding for development-stage defence technology companies, the MoD states. 

Alongside these commitments, UK Secretary of State for Defence, John Healey, has been adamant about his commitment to spend an extra GBP2.5 billion with small companies by 2028. 

These initiatives are aimed at creating “a Britain that rewards risk takers and innovators and gives people the belief that this government will back them”, Healey explained. 

His comments reaffirm the UK Government’s focus on defence as an “engine of growth” for the UK economy, with smaller companies set to play a key role in delivering this.