Question to the Ministry of Defence:

To ask the Secretary of State for Defence, what steps his Department is taking to mobilise private finance for the development of defence technology, a) in the start-up sector and b) from European investors.

The Strategic Defence Review 2025 set out Defence’s role in seeding innovation and growth to keep the Integrated Force at the forefront of warfare. To deliver this, we established the UK Defence Innovation (UKDI) with a £400M ring-fenced annual budget to fund and scale UK-based companies.

UKDI provides a bespoke, strategic service, and capital for high-growth potential UK and allied SMEs, helping them attract private co-investment into defence innovation. As of October 2025, £9 million in Innovation Loan funding has helped 11 successful SMEs raise an additional £29 million in private finance, and 42% of the 72 businesses supported to date have secured £85.4 million in follow-on investment.

To support European and international investor engagement, the Ministry of Defence partners with the National Strategic Security Investment Fund and the NATO Innovation Fund to leverage opportunities for the UK and provide targeted engagement for defence and security SMEs.

We continue to break down barriers and open new avenues for innovation and technology funding through the Defence Finance and Investment Strategy which will be published this spring.