UK Ministry of Defence’s (MoD) commitment to cutting-edge technology investment continues to trend in a promising direction. However, whilst Government investment increases, deciphering the list of ever-growing innovation schemes can often be as daunting as it is exciting, particularly when you’re already constrained for time and resource.
To make matters more challenging, most have heard horror stories of companies being out-manoeuvred and out-competed by the same old Defence giants post initial project completion, despite the budding relationship that existed throughout the ‘innovation journey’.
Fear not. Whilst it is true that innovation funding alone does not offer a silver-bullet to market success, approached in the correct way it can aid market-entry, accelerate product development and de-risk your financial profile. The trick: smartly and deliberately align your innovation market opportunity with wider deliberate projects and programmes (not limited to a single territory).
Here's Karve’s pick of some of the most exciting public sector innovation schemes in the United Kingdom 🇬🇧 at the moment that can help you get your technology in the hands of those that need it most. Looking for schemes in the US? Check out our US 🇺🇸 Defence Innovation Funds guide.
(1) The Defence & Security Accelerator (DASA)
DASA is a cross-Government organisation created by the Ministry of Defence (MoD). It works intimately with the UK Home Office, MoD, Department for Transport and security services and aims to identify and fund rapidly exploitable innovation technology. Notably, it encourages innovators small and large, irrespective of previous Government experience. Furthermore, DASA links directly to the Defence Innovation Accelerator for the North Atlantic (DIANA), a NATO innovation initiative.
Key DASA Objectives
1). To strengthen and broaden links to innovators across the UK and beyond - attracting the best innovative ideas for Defence and Security
2). To collaborate with customers across UK government to find innovative solutions to national security challenges
3). To focus effort on increasing the pull-through of innovative ideas - supporting the exploitation and commercialisation of solutions into capability
In the period 2021-2022, DASA assessed 761 new innovation proposals and funded 165 of those to the total value of £36.2m. 63% of those contracts were awarded to SME businesses and will be used within the UK Ministry of Defence (MoD). Funds are allocated using a variety of concepts, including:
Open Call For Innovation
Defence Innovation Loans
Defence & Security Seed Fund
Defence Technology Exploitation Programme (DTEP)
Benefits and criteria to consider when entering an open or themed competition through DASA include:
Anyone can apply.
No matched funding is required - 100% of funding is awarded to the winning enterprise.
Intellectual Property (IP) remains with the company developing the solution. Additional mentoring and finance (strategic use of R&D tax credits) available.
Defence Innovation Loans
Another popular avenue for DASA funding is via the defence innovation loans programme. These are aimed at scaling companies who may be credit constrained but have a clear route to commercial success. Headlines include:
7.4% interest rate (below-market)
Up to 7 years availability with extension options
Up to 100% of eligible project costs
Loan size from £100k to £2m
Defence Technology Exploitation Programme (DTEP)
DTEP aims to support the integration of novel technologies, materials and processes into defence supply chains. Put another way, bring together disruptive innovators, big suppliers and government funding in order to allow pioneering projects to flourish.
The programme is delivered by the Ministry of Defence’s Defence and Security Accelerator (DASA) and works alongside Innovate UK. With a total budget of £16m funding over 3 years (from 2021), it offers individual grants up to 50% of a project’s value, to a maximum of £500,000 per grant.
For more info visit: www.gov.uk/government/organisations/defence-and-security-accelerator
(2) jHub Defence Innovation Accelerator
jHub are, in their words, the UK’s Strategic Command’s innovation team, connecting world-class technology and talent with users across Defence & Security. Their aim is to deliver competitive advantage against the UK’s adversaries by unlocking novel and disruptive capabilities, through an opportunity-led and user-centred approach – with a particular focus on harnessing leading dual-purpose technology. They also aim to pioneer and champion methods that enable Defence to be ‘innovative by instinct’.
So what does this actually mean?
JHUB focus on mature solutions that can deliver impact at pace. With a particular interest in repurposing high Technical Readiness Level (TRL) products and services from areas that do not traditionally have a Defence flavour.
jHub run three types of innovation projects:
1). Problem-led projects (majority focus)
Starting with a current end-user problem JHUB scouts source the best market solutions, whilst seeking to tackle any wider obstacles to exploitation such as accreditation, policy, training etc.
2). Thematic priority-led projects
Framed against UK MoD trends with respect to transformation or anticipated future need.
3). Tech opportunity-led projects
JHUB identifies an industry capability that is believed could be highly impactful if repurposed for Defence, then seek user traction to exploit.
A traditional funnel process for evaluating projects exists within the above. Generally, this begins with a Rapid Evaluation where a match-making activity occurs, followed by an Opportunity Assessment to assess sufficient user desirability, before moving onto a Pilot scheme (includes a formal presentation at some point between months 1-6). Finally, the project is evaluated by the Strategic Command Innovation Board for core capability review.
For more info visit: www.gov.uk/government/organisations/jhub-defence-innovation/
(3) National Security Strategic Investment Fund (NSSIF)
The National Security Strategic Investment Fund (NSSIF) is the Government’s corporate venture capital arm for dual-use advanced technologies. They are the Government’s centre of expertise for venture capital and dual-use national security and defence technologies.
Their organisation draws together expertise from government, security and defence, and the worlds of technology and venture capital. Using their deep knowledge of those different fields, they aim to attract businesses that are developing tomorrow’s technologies closer to buyers and innovators in national security and Defence.
Together, they identify and seize opportunities for HM Government to gain strategic advantages in technology and strengthen the UK’s deep-tech ecosystem. In identifying and developing dual-use technologies, they focus on 12 key areas, including:
Technologies to enhance and defend digital networks
Data analytics and A.I.
Technologies and tools for interactive data transformation and exploitation, and to enable analysts to work more efficiently
Audio and visual processing
Technologies that allow audio and visual data to be captured, recorded and analysed
Commercial (tech developed for private purposes) space, platforms and robotics
Low cost of deployment technologies for transporting sensor payloads into challenging environments
Biological and medical technologies
Technologies and techniques with national security implications, including to detect, manage and mitigate biosecurity risks. Looking for healthcare funding streams instead?
NSSIF’s investment strategy focuses on forming long-term partnerships with companies of strategic interest to the UK, and those where they have, or can foresee, demand from national security and defence customers.
They make investments through British Patient Capital, a commercial subsidiary of the British Business Bank, and the Bank’s Enterprise Capital Funds programme, as well as British Technology Investments Ltd, which enables NSSIF to invest directly.
Their investment partners include a select group of leading venture investment funds.
For more info visit: www.british-business-bank.co.uk/national-security-strategic-investment-fund/
(4) UK Innovation & Science Seed Fund (UKI2S)
In summer 2022, the UK Innovation and Science Seed Fund (UKI2S) announced the expansion of its patient capital fund by £37m. UKI2S is an early-stage investment fund backed by UK Research and Innovation (UKRI), Defence Science and Technology Laboratory (DSTL), the Department of Business, Energy and Industrial Strategy (BEIS), the UK Atomic Energy Authority (UKAEA) and other public bodies.
Together, they are supporting the most ambitious UK innovators at seed and beyond to facilitate sustainable growth, enhance the health and security of society and deliver economic gains from the UK’s publicly funded research. UKI2S is managed by Midven Ltd which is part of Future Planet Capital Group.
The expansion of the fund builds on UKI2S’s successful track-record in nurturing early-stage firms furthering UK science and innovation. The additional funding will enable UKI2S to initiate and expand investment across Defence.
For more info visit: www.ukinnovationscienceseedfund.co.uk
(5) BattleLab: UK Defence Innovation Accelerator
BattleLab is UK Defence’s innovation Co-Creation space and part of the government National Strategic Technology and Innovation Exchange (NSTIx) programme. The programme was established to enable innovative development and prosperity opportunities by bringing parties to the table that would not normally operate alongside one another.
As a highly equipped co-working facility in Dorset, the BattleLab site enables the UK Ministry of Defence (MoD) to work directly with academic institutions, Defence primes, small and medium enterprises, and wider industry to develop new products and technologies which have the potential to be commercialised at pace.
For more info visit: www.defencebattlelab.com
(6) Advanced Research & Invention Agency (ARIA)
ARIA is an executive non-departmental UK public body, sponsored by the Department for Business, Energy & Industrial Strategy, and focuses on projects with potential to produce transformative technological change, or a paradigm shift in an area of science including the military defence and security spaces.
This relatively new agency, established in 2021, has taken inspiration from the successful US-based Defense Advanced Research Projects Agency (DARPA), which was instrumental in creating transformational technologies such as the internet and GPS.
Below are some of the innovative funding approaches that ARIA is exploring:
ARIA will exclusively focus on projects with potential to produce transformative technological change, or a paradigm-shift in an area of science. While it is anticipated that most programmes may fail in achieving their ambitious aims, those who succeed will have profound and positive impact on society.
For more info visit: www.aria.org.uk
Partner with Karve
Our team of experienced Defence & Security experts are best placed to assist you with funding and accelerator programme applications so you can continue driving forward innovation whilst mitigating the cashflow runway risks that start-up and scale-up companies fight with regularly.