European defence, security, and resilience startups raised a record $8.7 billion in 2025, according to data published in February by Dealroom and the NATO Innovation Fund — this was up 55% year-on-year, and nearly four times on what the sector raised in 2020. The UK led the pack, pulling in $2.9 billion last year, and just shy of $10 billion in total since 2020, more than any other European country.
Public spending on defence tech looks just as healthy on the surface. The UK spent £61.4 billion in 2025, according to a Tracxn report, equivalent to 2.3% of GDP and second in Europe only to Germany. Between the venture capital flowing in and the Ministry of Defence (MoD) money pouring out, there is no obvious shortage of resources or good will in British defence tech.
However, none of that makes it any easier for a startup trying to turn a pilot, grant, or warm introduction into an actual MoD contract. Raising money and selling to the Ministry of Defence are two different games, and a new report out today argues that most founders are still playing the wrong one.
Keen Venture Partners, an Amsterdam- and London-based venture capital (VC) firm that launched its first defence-focused fund in November 2025, has published “Selling to the UK MoD: A practical (but surely incomplete) guide for defence tech founders.” It’s the second in a series of reports guiding how defence tech founders can sell into Europe’s NATO defence ministries, and follows the inaugural Dutch edition published in June.
Co-authored by Keen and Robbie Hicks, a defence strategist and former Army officer now working as an independent consultant, the paper’s core argument is that founders can often confuse a good reception with a good outcome.
“There’s a process, there are stages [and] procedures to follow, and being liked by the people in the room is only a small part of it,” Angad Singh, associate at Keen, tells Resilience Media. “Founders who do well are the ones who understand that early, plan for the expected long timelines and manage their priorities around it.”
MoD cons
Hicks says the mistake often starts even earlier than a bad meeting. Founders tend to focus on finishing their product and chasing a sale before they’ve properly understood the problem they’re solving, or who owns it inside the military system.
“You need to know what military problem you are fixing, its relation to the wider military system, and whose responsibility it is to fix that problem before you lock down the design,” Hicks explains to Resilience Media. “One thing is certain, the team procuring the solution will already have an idea of what they want the answer to be [or] do.”
The Ministry itself is in the middle of a major rebuild. It created its National Armaments Director Group (NADG) in March 2025, bringing procurement, digital, science, and infrastructure teams together under one roof. Rupert Pearce, the former Inmarsat chief executive, took over as National Armaments Director that October on a five-year term, with the Ministry calling the changes “the biggest defence reforms for more than 50 years.”
With those changes still fermenting, the UK’s new leadership under Andy Burnham has already reshuffled the department further, installing Wes Streeting as Defence Secretary. Meanwhile, John Healey — who resigned from the Defence Secretary role in June to protest a shortfall in the defence budget (a shortfall that is still in place) — is now the Chancellor of the Exchequer, running the very Treasury that will determine whether that defence budget budges. All of this will also have an impact on how procurement plays out.
Hicks, for his part, says the Ministry’s various efforts to court smaller businesses are welcome, but haven’t yet proven themselves where it counts.
“We are yet to see its effect on procurement,” he says.
However, Keen’s paper credits the wider reform agenda as a genuine attempt to open the system to new entrants, pointing to the NAD Group alongside two newer additions: UK Defence Innovation (UKDI), which consolidates the Ministry’s various innovation and grant-funding schemes under a single £400 million budget, and the Dynamic Market, a rolling online marketplace launched last year that lets Ministry teams run smaller competitions without waiting for a full tender process.
None of those mechanisms, however, solve the more basic confusion Keen’s paper keeps returning to: who a founder actually needs to convince. Establishing whether your product works is, in many ways, the easy part. Getting soldiers to say so in a field trial is proof of concept, and proof of concept is genuinely useful — it’s just not the same thing as a sale.
As the report notes:
“A soldier can confirm that your system works in the field. That is extremely valuable, but it does not move money.”
So who is actually moving the money?
“The honest answer is that it depends on what you’re selling and which route you’re going down — and the reorganisation is shifting some of this as we speak,” Singh says. “But the principle holds, and the person who moves money is the one who owns the budget and programme, not the person who tries your kit. If you do get in front of them, it makes a real difference if you already understand where you’d fit into their priorities and can show you can actually deliver.”
Prime examples: Grants don’t equal procurement
Distilling Keen’s paper reveals a handful of recurring missteps beyond pitching the wrong people. For instance, startups treat grants from DASA, the Ministry’s innovation-funding arm that recently became part of UKDI, as validation that a sale is coming, when in reality very few of those grants lead anywhere near a funded contract. This doesn’t negate the usefulness of grants, of course. Non-dilutive capital has its place in building defence and space companies, it’s just that founders need to understand the role that it plays.
“For deeptech in general, it’s often the norm and an ideal way to fund early and innovative R&D work,” Singh says. “Innovation funding and procurement are separate pots with separate owners and sometimes one doesn’t automatically lead to the other. Success often involves running both tracks at once, i.e. take the grant, get the exposure, trials and build procurement relationships in parallel. That way, grants can become a leveraged stepping stone.”
Security clearance is another trap that often surfaces too late. Cyber Essentials, a government-backed cybersecurity certification, is just the entry requirement, with programmes routinely demanding ISO 27001, JOSCAR, or full Facility Security Clearance before a contract can be signed.
However, the report also flags a separate, but no-less important mistake: overlooking the role played by prime contractors, the elite group of large defence companies that win the Ministry’s biggest programmes and then subcontract pieces of that work down to smaller suppliers. Most of the money the Ministry spends with small businesses doesn’t arrive as a direct government contract at all — it comes filtered down through primes such as BAE and Rolls-Royce. The MoD’s own statistics show that just 4% of its direct expenditure with UK industry in 2024/25 went straight to SMEs, worth £1.2 billion out of £31.7 billion overall, meaning whatever share of that remaining money that does reach smaller firms mostly arrives filtered through the primes holding the direct contracts.
Just last week, news emerged that BAE and its Team Tempest partners were handed a £708 million extension to keep developing Britain’s next fighter jet programme, work the Ministry says will eventually touch roughly 600 companies nationwide. Getting into a supply chain of that size has little to do with impressing a government official.
Singh said those doors open in more than one way. Some companies end up as subcontractors on programmes already running, while others get pulled in earlier, brought on as development partners, or invited to join a bid the prime wants to strengthen.
“Each of those is a different conversation and it helps to be clear about which one you’re having,” Singh says. “What they share is that the prime needs a reason i.e. a capability gap on a programme, a requirement they can’t meet in-house or a bid that’s stronger with you on it. So you’d have to determine where you strengthen their position and have your requirements in order before the conversation gets serious. For some companies, a prime could be the quicker route to market.”
Practical steps
Beyond the diagnosis, the report offers founders some concrete takeaways: a free registration on the Defence Sourcing Portal covers any Ministry opportunity above £10,000, and getting Cyber Essentials certified alongside a JOSCAR listing puts a company on record as pre-vetted before it even approaches a buyer. It’s also worth liaising with a DASA Regional Innovation Partner before submitting any proposal.
Elsewhere, the report also flags the Dynamic Market as something that’s worth monitoring closely, since contracts there tend to close in a month versus the usual drawn-out tender cycle.
Underneath all of it sits one diagnostic step the guide treats as essential: figuring out which of the Ministry’s eight TEPIDOIL capability categories a product actually belongs to, who commands that area, and whether the right entry point is the slow core programme, the faster rapid-procurement route, or an early-stage trial.
There are signs the Ministry is trying to shorten that road itself. In May, 13 British companies picked up contracts worth up to £4 million apiece through Commercial X, the Ministry’s accelerated contracting arm. A separate effort is tackling the pipeline further upstream. The Technology and Growth Alliance, launched by the MoD’s own commercialisation entity Ploughshare, and backed by members including BAE, Thales, Leonardo, and Helsing, is aiming to help create 20 defence technology spinouts a year, turning research that would otherwise stay locked inside a lab into companies with both military and commercial uses.
So change is certainly afoot in the UK defence procurement sphere, and the appetite to fix things is obviously there. Whether that appetite translates into speedy contracts for defence tech founders is another matter.
“It’s a rewarding market but it’s not all rainbows, and it’s certainly not quick,” Singh says.
