Defence and Security Equipment International (DSEI) 2025

Key Takeaways

Autonomy and counter-autonomy dominated the show.
Veteran-owned businesses are thriving.
The Defence Industrial Strategy was launched, along with a ground-breaking defence technology sharing agreement between the UK and Ukraine.
Access to finance is a challenge still being grappled with by SMEs in the UK.

Defence and Security Equipment International (DSEI) is the UK’s flagship defence event – held in the UK every two years – bringing together the ‘who’s who’ of industry, academia, government, and the armed forces over four days. For vendors it serves as a platform to showcase new products as well as to hold critical conversations with those with the money in government to support deal flow and better understand demand signals. For government it provides the opportunity to articulate the needs of defence to industry, through a whole host of engagements and keynote speeches by ministers. For investors like Heligan, it serves as a forum to engage in meaningful dialogue with businesses in our sectors of expertise, to better understand their growth strategies and how we might be able to support.

The week started to much fanfare with the government’s publication of the eagerly anticipated Defence Industrial Strategy (DIS). Coinciding with DSEI, although I suspect by design, the DIS provides industry with the mechanisms to achieve the intent and vision laid down in the previously released Defence Strategic Review (SDR). From Heligan’s perspective, it excitingly commits to an annual budget of £400 million for a new UK Defence Innovation organisation as well as increases by £2.5 billion the amount the MOD intends to spend on SMEs in the ecosystem. The bold aspirations of the SDR, backed up by a robust DIS, makes for a sector that looks poised for significant growth.

Amongst the stands promoting the UK’s larger multilateral defence programmes such as the Global Combat Air Programme (GCAP) and the Future Combat Air System (FCAS), as well as the super-stands set up by the defence Primes, many smaller, innovative SMEs descended on the event to showcase their unique capability offerings to the defence sector. In an appreciation of the current character of conflict – seen playing out on the battlefields of Eastern Europe – there was a heavy emphasis on autonomous systems across the three domains of land, sea, and air. Prototypes on show ranged from uncrewed aerial systems (UAS) to uncrewed ground vehicles (UGS) to uncrewed surface and underwater vehicles (USV and UUV), configured for a myriad of uses from intelligence, surveillance, & reconnaissance (ISR) to kinetic strike capabilities.

Counterbalancing this emerging technology area, a number of businesses have developed maturing countermeasures, with a particular focus on counter-UAS solutions. Within this emerging subsector, SMEs have sought to specialise, with some focusing on threat detection through radar and acoustic methods, and others focusing on eliminating the threat altogether through electronic warfare (EW i.e. jamming), microwave, and kinetic (i.e. missiles, interceptor drones, drone nets) means.

With defence ministers of the E5 (UK, France, Germany, Poland, and Italy) and Ukraine in London ahead of the show, Defence Secretary John Healey MP announced a ground-breaking defence technology sharing agreement between the UK and Ukraine which would see IP shared and jointly developed across the two borders. This agreement also extends to using UK manufacturing facilities to produce UK-Ukrainian developed hardware, which intends to fuel growth in the UK’s economy.

Another evolving theme was the increasing prevalence of veteran-owned SMEs defining the defence market. This growing trend may partly stem from these entrepreneurs’ strong grasp of customer needs and their ability to navigate the complexities of the defence procurement landscape, including the multitude of MOD frameworks required to sell directly into government. Additionally, the possession of security clearances by these leadership teams paves the way for more in-depth commercial discussions with end customers, making them much more attractive to do business with.

In addition, a common topic of discussion across the floor of the show was the challenge for SMEs in accessing to finance to support growth. Despite the positive rhetoric coming from government, many SMEs still struggle to raise capital due to a long list of risk factors: long, unpredictable procurement cycles; high customer concentrations; cash flow issues; and entrenched negative views on the defence industry as a whole. All of this risks wasting the significant potential of the sector should it continue to go unaddressed, however, the government’s recent impetus in supporting the market – through its ‘defence reform’ programme – signals that change for the better is now underway.

On Friday, as another DSEI came to a close, I reflected on a show that showcased not only the breadth of innovation across the UK defence sector but also the growing alignment between government intent, industrial capability, and investor appetite. While challenges remain – particularly for SMEs seeking the capital required to scale – the combination of new government initiatives, collaborative partnerships, and a strong pipeline of emerging technologies suggests a sector on the cusp of accelerated growth. For Heligan, the opportunities to support and partner with the next generation of defence businesses have never been more compelling.