Venture capital firms need to rethink their hesitation about defence. That’s the message from Dame Fiona Murray, vice-chair of the NATO Innovation Fund, who says geopolitical instability and war have shifted investor attitudes—and that shift needs to continue.
In an interview tied to the launch of a new UK-based cybersecurity fund, Osney Capital, Murray said there’s now broader recognition that investing in defence and cybersecurity is not just acceptable, but necessary. “You can be responsible in your investment in defence, cybersecurity,” she said, “and in the end, you are really doing something that is ethically positive and important.”
“Osney Capital’s fund is an opportunity for the UK to build on the UK’s strong advantage and excellence in cybersecurity. In times of global uncertainty, we must foster a safe, secure and trusted digital economy in the UK — across all our digital and physical infrastructure,” she said.
“This means investing in and promoting innovation in the UK’s cyber security ecosystem. The work of Osney Capital’s fund is a matter of national security, digital sovereignty, and economic leadership.”
A Shift in Perception
The shift, she said, is driven in part by Russia’s invasion of Ukraine and the growing complexity of global threats.
VCs have traditionally avoided defence deals, citing ethical concerns. But that reluctance may be outdated. According to data from Deal Room and the NATO Innovation Fund, European defence and security startups raised a record $5.2 billion last year—despite an overall slowdown in venture funding.
The NATO Innovation Fund, which launched in 2022 with €1 billion from 24 NATO member states, is the first multi-sovereign VC fund focused on defence. It backs startups in science and engineering that support member states’ security and resilience.
Murray’s remarks came as Osney Capital announced a £50 million early-stage fund focused on cybersecurity. The fund, which closed oversubscribed, is backed by the British Business Bank and will write checks between £250,000 and £2.5 million for about 30 companies. Murray is serving as an advisor.
The message from the fund’s backers is clear: the world has changed, and venture capital needs to catch up.
