Defence Tech is Evolving

Earlier this year in April we published our first in-depth report on Defence Tech with MD One. The trajectory that was nascent then has continued to evolve. As technological advancements in areas such as quantum computing and artificial intelligence continue to be used to advance society, they also introduce new threats to the global security landscape, requiring the development of new technologies to defend against such threats. Not only has the relevance of national security been increasing but a wider range of technologies have been recognised as playing a role in national security.

Below are some thoughts provided by leading experts in the role defence technology is playing in shaping the national security landscape. Alongside them are some of the investments made into the sector since our report was published which illustrate some of the directions in which the sector is evolving.

In July Materials Nexus, which combines quantum mechanics with the power of artificial intelligence to accurately predict the properties of materials, raised £2.3m of investment from a consortium of investors including Ada Ventures, MD One, and HTGF. The company’s technology will enable faster and more effective materials design for – amongst other things – energy generation and transmission, helping to address concerns around energy security.

Also in July this year, a spinout from Birmingham University received its first round of external investment. The company received £1.5m to develop its quantum gravity gradiometer technology, which can be used to map underground structures. As Birmingham Uni comments, [the technology will] “transform the efficiency of major infrastructure and repair projects by mapping complex unseen locations quickly, accurately, and without the need for disruptive excavations.” Pete Stirling, CEO, adds,”Our goal now is to take the technology and shrink it down so that it’s easier to be deployed in everyday development.” Amongst commercial applications, some defence applications suggest themselves.

It’s not just VC and angels that are continuing apace. BlueBear, which designs and develops a range of autonomous flight systems with applications in the defence, agriculture and emergency services sectors, was acquired by Saab. Prior to being acquired Blue Bear had developed its technologies with the support of £10m of grant funding. “BlueBear, as world-leading provider of AI-enabled autonomous swarm systems for complex defence and security applications, is a good fit with our approach of leveraging emerging technologies in the fields of autonomous systems and AI,” says Micael Johansson, President and CEO of Saab.

BlueBear also spun out Greenjets, an MD One portfolio company. Greenjets develop quiet, efficient and resilient propulsion systems for drones and other electric aircraft. The team has over 300 years of combined aerospace expertise from Rolls Royce, Cosworth, and BAE Systems. Their technology has caught the attention of established US defence primes and has attracted several £M in funding from the Aerospace Technology Institute. Anmol Manohar, CEO of Greenjets, commented that ”Recent global conflict has shown the transformative impact of drones on the modern battlefield. The rapid evolution of drone technology is calling for quieter, more efficient and more resilient systems especially as drones get bigger and more capable. We are also seeing an immediate read across of the technology from defence to civilian drone applications.”

We wrote in our report in April that “Companies creating world-beating technologies that address the UK Government’s security priorities will see faster growth than incumbents who fail to innovate. Fundamentally, the companies creating those technologies are one of the best counter-cyclical asset classes. […] defence budgets remain fixed regardless of changes in GDP.” This counter-cyclicality helps to explain the attentions – and investment – that the sector is now receiving.