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ARTICLE · 20 OCTOBER 2026

Incentivising Defence Tech: Short Cycles, Long Horizons

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European defence technology start-ups secured a record $8.7bn in venture capital during 2025, creating unprecedented challenges in talent retention and incentive design.

United KingdomEmployment and HR
Sam Taylor
Sam Taylor
Nigel Watson
Nigel Watson

According to research from the NATO Innovation Fund and Dealroom, European defence, security and resilience start-ups secured a record $8.7bn of venture capital in 2025, an increase of 55% on the previous year. For many businesses, that influx of capital has accelerated growth, increased valuations and intensified competition for talent.

The different timelines involved create a particular challenge for the defence sector. In short:

1. A funding round, strategic partnership or product breakthrough can reprice a defence technology business rapidly.

2. Government procurement programmes and value realisation timelines can, by contrast, take years.

3. The specialist individuals who create that value are often in short supply, meaning that companies need to move quickly to secure them, whilst retaining them over the medium to longer term.

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