'Defence unicorns' awarded new contracts as government promises an increase in defence spending
New contracts as government promises an increase in defence spending
Two Hampshire business are among 13 which have been awarded multi-million pound contracts to work with the Ministry of Defence to develop cutting-edge systems for our Armed Forces.
Kraken Technology Group based at Whiteley and Aquark Technologies Ltd based at Eastleigh are among 13 British tech companies to have signed contracts in a bid to boost rapid procurement and deliver cutting-edge technology for the UK Armed Forces. Aquark builds miniaturised quantum devices, while marine specialists Kaken develops high-performance composite boats.
It is part of new scheme to grow next billion-pound British ‘defence unicorns’ and boost to British businesses, jobs and UK Armed Forces readiness with accelerated contracts awarded to small, innovative British companies who have done limited or no previous business with the Ministry of Defence.
The announcement comes as the Defence Secretary John Healey MP addresses the Good Growth Foundation, arguing that Britain’s record defence investment must come with a back British pledge to boost UK jobs and innovation. It follows criticism of reduced defence spending levelled at successive governments over the years.
Defence Secretary John Healey MP said: "This government is backing British innovators and entrepreneurs, doing things differently to deliver for our forces.
"These are contracts, not words or promises, and they mean that thirteen British companies, many of them new to defence, are receiving real investment to develop the technology our Armed Forces need. This is defence delivering growth right across the country.
"These companies may be small, but they all have the potential to become billion-pound FTSE 100 firms."
The contracts - the largest worth £4 million - have been awarded through Commercial X, the Ministry of Defence’s accelerated contracting vehicle, as part of the government’s search for Britain’s next defence unicorn.
The contracts underline the Government’s focus on moving at pace, getting contracts to innovative British businesses faster than traditional procurement routes allow, and getting innovative new kit into the hands of UK Armed Forces.
All the companies were founded after 2011, and the vast majority started in the last six years.
The thirteen contracts are with:
• The RC Den Ltd (London)
• Aquark Technologies Ltd (Hampshire)
• Aether Aerospace Ltd (Newport)
• SpaceAM Ltd (London)
• Avenue 3 Ltd (West Yorkshire)
• Nereus Medical Ltd (Devon)
• Kraken Technology Group (Hampshire)
• Flowcopter Ltd (Edinburgh)
• Helyx Secure Information Systems Limited (Buckinghamshire)
• EP90Group Ltd (Winfrith Newburgh)
• Ritson Reid Ltd (Berkshire)
• SimCentric Limited (Oxfordshire)
• Spectra Group (UK) Ltd (London)
Director of The Good Growth Foundation (GGF) Praful Nargund said: "Our research shows that to build a defence settlement that lasts, the public needs to see the benefits of defence spending brought home to the UK. Pounds spent on defence must do double duty, protecting both our national security and our economic security.
"Today’s announcements are a step towards bringing defence home: backing the British Innovators who will build our sovereign capability, keep the returns here, and create the defence industry Britain needs for a more dangerous world.
"SMEs have the potential to be the heart of innovation in Britain, and it is only by backing SMEs that you build the domestic supply chain resilience that sovereign capability depends upon. Yet too often they are locked out of defence contracts, and defence investment flows overseas rather than building resilience in Britain. By backing our innovators, giving them the contacts and capitals to grow, we can create the conditions to build Britain’s next defence unicorn."
The winning companies span a wide range of cutting-edge capability areas, from quantum sensing and autonomous systems to secure communications, space manufacturing and synthetic training. Together they represent the breadth and depth of British defence innovation - from established businesses scaling up to newer firms entering the sector for the first time.
The government said the awards are part of the its commitment to make Britain the best place to start and grow a defence business. Backed by the MOD’s commitment to increase defence spending with small and medium-sized enterprises by 50% through to May 2028 - an additional £2.5 billion, bringing total SME spend to £7.5 billion – the fund forms part of a wider package of reforms to open defence up to the next generation of British innovators.
The Government has also said it is backing UK Armed Forces with the largest sustained increase in defence spending since the end of the Cold War – hitting 2.6 per cent of GDP from 2027.
Commercial X, a specialist function within the UK Ministry of Defence designed to accelerate the procurement of digital technologies and ground-breaking innovations, led the search for winning companies, assessed applicants against the requirements of the UK Armed Forces across a range of technology and capability themes, including AI and machine learning, robotics and autonomy, and precision capabilities.
The contracts provide winning companies with a foundation to attract further private investment, helping them scale rapidly and realise their full potential. The fund sits alongside the MOD’s new Office of Small Business Growth, which provides a single point of access for SMEs looking to work with defence, as well as the recently held Dragons’ Den-style event connecting defence innovators with private investors.