Army scraps plans for solo investment fund
THE Army has scrapped plans to launch a £50m venture capital fund which would have invested in promising defence technology start-ups.
Proposals for the scheme were shelved after Whitehall insiders decided generals should instead work more closely with the low-profile National Security Strategic Investment Fund, which is run by Britain’s spy agencies and backs firms seen as useful to the country’s interests.
Major General Jez Bennett, the Army’s capability director, told a conference in Twickenham in January that there were plans to create a fund that would invest £50m over four years.
This would have matched the approach taken by the US army, which launched a similar initiative in 2002 to harness the power of free enterprise. However, the British plan has been scrapped and the Army will instead team up with NSSIF.
Sources said the Army never came close to launching its own fund, and that Major General Bennett made his comments when it was still in the very early stages of planning.
A subsequent review found that it would be more efficient to combine planned investments with NSSIF, rather than setting up a separate venture capital fund just for the Army’s investments.
NSSIF confirmed that it had partnered with the Ministry of Defence. The fund was created after the 2017 Budget and has £135m to pump directly into technology start-ups or other technology investment companies.
NSSIF has already backed venture capital fund Amadeus Capital, The Sunday Telegraph revealed earlier this month. It has also invested in quantum computing start-up Quantum Motion and has held talks with Notion Capital, another existing fund.
Insiders say the fund was a key supporter of ministers’ decision to spend £400m on a 45pc stake in commercial satellite business OneWeb.
An MoD spokesman said working with the fund would allow it to deliver value for money.