How UK defence tech scale-ups are winning contracts in 2026
By Robert Jeffries, MD of the UK, Think & Grow · 3/11/2026 · Last updated 3/11/2026
In short: UK defence tech has strong foundations. The talent and research base is world class, investor sentiment towards defence has shifted, and programmes such as NSSIF and NATO DIANA put scale-ups in front of buyers. Primes are partnering with smaller companies earlier, and teams with defence experience in-house move faster. The hard step is still getting from pilot to funded programme.
Most conversations about UK defence procurement start with what needs fixing. When we interviewed founders, investors, industry bodies, primes and former senior officers for our white paper, Voices of Defence Tech: Inside the UK Procurement Gap, we heard plenty about slow buying cycles and unclear routes to contract. We also heard, again and again, about things that are already moving companies forward. This piece is about those.
What is working in UK defence tech right now?
Five things came up most often in our interviews. Each is covered below, with what founders can do about it.
- The UK's talent and research base
- Investors who now see defence as investable
- Government-backed programmes that give buyers a reason to trust a smaller company
- Primes willing to partner with SMEs
- Scale-ups bringing defence experience into their teams
Why is the UK a good place to found a defence tech company?
The UK produces the engineering talent and research that defence tech is built on, and early-stage capital is available for companies with a credible use case.
The money behind defence is also more certain than it was. The Defence Investment Plan, published on 30 June 2026, sets out £298bn of Ministry of Defence (MoD) spending over four years, including £15bn of additional funding. At the Budget on 28 October, the government said the plan is now fully funded, with the remaining £4.7bn coming from reprioritising capital budgets across government. We set out what else the Budget announced in our [Budget 2026 explainer]([live Budget blog URL]).
Has investor appetite for defence tech changed?
Yes. For years defence was treated as a "sin stock", grouped with tobacco and gambling and left outside many ESG frameworks. That view has shifted.
Dual-use technology has helped. When a product has a commercial market as well as a defence one, investors find it easier to discuss and to back.
State-backed capital is moving in the same direction. The Budget pointed up to £5bn of National Wealth Fund and British Business Bank investment and lending at defence, dual-use technology and sovereign capability over four years, and set up a defence finance taskforce that will report before the 2027 Spending Review.
The picture still runs both ways. Dealroom data shows the UK led Europe in defence tech investment in 2025, at $2.9bn, but was third in Europe so far in 2026, at $932m. Dealroom's reports use different definitions, so the two figures aren't a like-for-like comparison.
How do government-backed programmes help defence scale-ups win contracts?
A place on a recognised programme tells a buyer that someone credible has already looked hard at your technology. Founders described it as getting onto a buyer's radar before the first meeting, and two programmes came up most.
NSSIF
The National Security Strategic Investment Fund is the government's corporate venture capital arm for dual-use advanced technology, run with the British Business Bank. It invests alongside venture investors and connects the companies it backs with national security and defence buyers. It has up to £330 million to invest between 2026-27 and 2029-30. It suits venture-backed companies with a strong commercial market and a clear national security use, and the conversation usually starts through your existing or prospective investors.
NATO DIANA and its Rapid Adoption Service
DIANA, NATO's Defence Innovation Accelerator for the North Atlantic, runs its largest challenge programme yet in 2026: 150 companies from 24 NATO countries, working on ten challenge areas. The part founders most often overlook comes afterwards. Through the Rapid Adoption Service, allies can trial a DIANA company's technology with military end users, and once a prototype has been demonstrated, procurement can follow without a further competition.
If your technology maps to a DIANA challenge, read the challenge areas early and plan for the adoption route from the day you apply.
What role do primes play for defence SMEs?
Primes, the large contractors that lead major defence programmes, hold the frameworks, the integration work and the relationships with end users, so a prime that partners early can carry a smaller company through the stretch between a pilot and a programme. Some now run dedicated programmes for small and medium-sized enterprises (SMEs).
Contributors described the best primes as integrators: they take what a smaller company builds and make it part of the platforms the armed forces already use. Founders who arrive knowing which capability gap they fill, and treat the prime as a partner, get further.
Why are defence scale-ups hiring people with military and MoD experience?
The MoD buys across the Royal Navy, British Army, Royal Air Force and central procurement, each with its own structures, priorities and routes to funding. Scale-ups that bring that knowledge into the team find their way through faster, and build products around the people who will use them.
What still stops defence scale-ups winning MoD contracts?
None of this closes the gap on its own. MoD direct spend with SMEs was about 4% in 2024/25, roughly £1.24bn of £31.6bn. The SME Action Plan, published on 21 July 2026, targets £7.5bn of total SME spend by summer 2028. The companies we spoke to are proving their technology. The harder step is moving from a successful pilot to a funded programme, which we covered in From procurement gap to deployment gap.
What the routes above have in common is that each gives a buyer a reason to trust a smaller company: a vetted investor, a demonstrated prototype, a prime's backing or a team that already knows how defence works. Founders who pick the signal that fits their stage spend less time waiting for the right door to open.
Frequently asked questions
How do defence SMEs get onto a prime's supply chain?
Start with the capability gap you fill, and approach the prime as a partner rather than a customer. Some primes run SME partnership programmes. A place on NSSIF or NATO DIANA, or a team with defence experience in-house, gives a prime a reason to trust a smaller company.
What is NSSIF?
The National Security Strategic Investment Fund is the government's corporate venture capital arm for dual-use advanced technology, run with the British Business Bank. It has up to £330 million to invest between 2026-27 and 2029-30.
What is NATO DIANA's Rapid Adoption Service?
A fast-track route for companies in NATO's DIANA accelerator to trial their technology with military end users. Once a prototype has been demonstrated, allies can procure it without running a further competition.
Is the UK Defence Investment Plan fully funded?
At the Budget on 28 October 2026, the government said yes. The remaining £4.7bn of the plan's £15bn of additional funding will come from reprioritising capital budgets across government.
How much does the MoD spend with SMEs?
About 4% of its direct spend in 2024/25, roughly £1.24bn of £31.6bn. The SME Action Plan targets £7.5bn of total SME spend by summer 2028.
When is Voices of Defence Tech published?
Voices of Defence Tech: Inside the UK Procurement Gap is published on Wednesday 25 November 2026, with a launch panel in London.
Get the full paper first
Voices of Defence Tech: Inside the UK Procurement Gap is built from interviews with founders, investors, industry bodies, primes and former senior officers. It credits what's already working in UK defence innovation, sets out where funded technology stalls between pilot and programme, and gives practical takeaways for founders, primes, investors and banks.
It's published on Wednesday 25 November. Join the waitlist to get it 24 hours early.
Sources
- The Defence Investment Plan, MoD, 30 June 2026
- Reuters via Defense News, 28 October 2026
- ADS Advance, 28 October 2026
- NSSIF, British Business Bank
- UK Parliament written question on NSSIF funding
- NATO DIANA 2026 cohort announcement
- NATO DIANA Rapid Adoption Service
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