City of London forum urges private capital boost for defence startups

Industry professionals and investors at the Defence and Dual-Use Investment Forum have called for more investment in startups to address the changing nature of conflict, amid European efforts to scale up the continent’s defence industrial base.

Organised by Nord Sloane Ventures at Deloitte’s London headquarters on 26 May, the event built on previous forums held at the Estonian embassy in 2025 and early 2026.

Throughout the day, a key theme was the urgent need for capital investment in defence and dual-use technologies in Europe. However, it was noted that intertwined regulatory and cultural obstacles make it difficult for companies seeking investment to expand.

Keynote speaker David Murrin – from Guernsey-based Spitfire Strategic Capital – insisted that while defence represents a major investment opportunity, a “staggering number” of SMEs remain starved of capital. “Europe is absolutely target rich” with organisations that have great ideas “but cannot get funded”, he said.

Murrin also warned that supply shocks and rising bond yields will constrain government spending, making the development and procurement of “exquisite” high-end weaponry economically unsustainable. Instead, he advocated for countries to follow the Ukrainian model of procurement, using inexpensive systems that can be purchased “en masse”.

However, the question was raised whether procurement of cheap technology alone is enough. Murrin argued that investors must also push for change in the regulations surrounding investment in defence companies to speed up the procurement of new equipment.

Echoing this, Todd Bartos, Managing Partner at the Bartos Group, LLC, said that while the US has a mature, predictable national security legal landscape, Europe “is not there yet”. Consequently, investors face regulatory headwinds around procurement processes and national supply chains which hinder market growth.

While Bartos does believe Europe's mid-stage funding is "starting to accelerate” and could overtake the US, it currently lacks the investment pipeline sustaining US defence tech.

One long-term investment solution raised was the Canada-headquartered Defence, Security and Resilience Bank, which the speakers said could inject the growth capital Europe needs.

More immediately, one panel discussion argued that startups should leverage smaller mechanisms like research and development tax credits. Andrew Carwardine, Defence Senior Partner at RCK, highlighted that in the UK, these provide important “non-dilutive capital”. 

However, Carwardine added that there is no “wraparound support” for SMEs from the UK Government to become defence ready. As a result, the setup is largely “self-help,”, requiring startups to proactively seek expertise from niche specialists.

Bartos concluded that to drive investment in smaller companies, the US and EU must recognise that their supply chains are integrated and their interests unified. “If we start grabbing for small pieces of the pie to protect narrow national interests, it becomes a zero-sum game,” he said.