Defence Spending is Rising. So Too Are the Opportunities for Investors
Founded by a team of industry veterans— Jim Odell, Justin Urquhart Stewart, Paul Newsham, Martin Taylor, Michael Mcdowell, and Tony Backhouse, Regionally Ventures is committed to bridging the funding gap for high-growth regional businesses across the UK. With 70p of every £1 traditionally invested in London, regional businesses represent a valuable, yet often overlooked, segment of the market.
You have probably seen the headlines over the last week or so: the UK’s defence industry is set for a major economic boost. With the government committing to increase defence spending to 2.5% of GDP by 2027, billions of pounds will flow into the sector.
For investors, this is not just about the usual suspects like BAE Systems, it is about the wider supply chain, the regional businesses powering innovation, and the long-term stability that government-backed defence contracts provide. Dual-use technology is going to be a huge market over the next 5 years.
Beyond the Headlines
We are already seeing significant movement. The Ministry of Defence is awarding contracts, reinforcing the UK’s role in NATO and international security alliances. While attention is often on headline defence firms, the real opportunity is further down the chain. From specialist manufacturers and advanced engineering firms to AI, cybersecurity, and logistics providers, many of the businesses poised for growth fall well outside the ‘golden triangle’.
The defence industry is not a short-term play. Government spending commitments ensure demand, while the geopolitical landscape means investment in security and military capability is only going to grow more.
What This Means for Investors
For those who might have traditionally focused on the South of England, this shift presents an opportunity to rethink their strategy. There are high-growth companies across the UK, particularly in established defence hubs, that will see significant gains from this increased spending. These are the businesses that might not have been on the radar before but are about to become critical players in the UK’s economic landscape.
Defence spending is not just about national security—it is an economic driver. The government’s commitment to is a clear signal that this sector is a priority.
Where the Real Opportunity Lies
We already know the established players will benefit. BAE Systems has a record order book, and other major contractors are securing long-term commitments. But the real opportunity lies in the businesses lower down the supply chain. The engineering firms, the precision manufacturers, and cutting-edge technology companies that are critical to delivering on these contracts.
These are the businesses that will be hiring, expanding, and driving innovation as defence funding increases. The opportunity is there - not just for the usual suspects, but for the entire supply chain that supports them. Regionally Ventures is already supporting a dual-use space and defence technology business that works as a critical subcontractor to major defence suppliers and we are looking for more great businesses like this that we can support with advice and capital.
Mind the Investment Gap
Many of these companies in supporting roles are regional, operating outside of the traditional investment focus of London. They are the ones expanding, innovating, and building the next generation of defence technology. Yet, all too often, they are struggling to access the investment they need to scale.
At Regionally Ventures, we are focused on bridging that gap. Investors looking for stable, long-term returns should be paying close attention to these businesses. With the right backing, they will be at the forefront of the UK’s industrial growth in the years ahead.
If you share our vision for unlocking regional potential, we’d love to hear from you.