News
Private Equity investment across the security technology industry continues to surge
February 2025 by Matt Croker, Director at Heligan
Over the last 10 years, threats to the UK, including espionage, terrorism, cyber-attacks, and disinformation have increased dramatically in volume and velocity. Globally, multiple state-on-state conflicts pose serious risks, with the potential to escalate into both intra and intercontinental struggles.
Private Equity activity across Security-Tech has continued to grow year-on-year, with 191 direct investments made since 2018 across a range of sub-sectors. These include Safety & Security, Risk & Crime Prevention, Identity Technology, Intelligence and Surveillance, Communication Technology, Cyber Security, Defence and Frontier Technology. According to Heligan, as threats evolve, Private Equity investment is crucial for accelerating innovation and market readiness and maintaining our operational edge over adversaries.
Security-Tech investmenthas accelerated across different regions of the UK, with 89 transactions in the Southeast from 2018-2024 and 25 in the Midlands, with deal activity also rising in the Northwest and Scotland.
Matt Croker, Director at Heligan, said, “Cyber security remains a standout sector for Private Equity, offering scalable, recurring revenues and a fragmented market ideal for buy-and-build strategies that enhance returns. While Private Equity is now exploring buy-and-build approaches in other security and defence sectors, this trend is emerging but is expected to grow quickly.
“More broadly, 2024 was a record year for new investments. Although volumes dipped in 2022 and 2023, activity remained robust and looking ahead, 2025 could exceed the level of activity experienced in 2024. Government priorities have shifted with a renewed focus on national security amid conflicts like Ukraine-Russia and Israel Middle East. This geopolitical instability has driven structural change in governmental mindsets and budgets, expanding addressable markets - a crucial factor for investors.
“The defence and national security technology industry is transforming significantly in response to increased challenges”, added Croker. “The government’s increasing demand for innovative dual-use technologies is driving sector growth, which, in turn, is driving private market investment. Private Equity firms are looking to capitalise on this expanding market, which is often supported by government, military and law enforcement needs”
Bolt-on transactions for Private Equity platforms are also increasing in volume. Cyber security and defence are seeing more roll-up strategies driven by recurring revenue models that attract PE alongside attractive market dynamics.
Croker continued: “Technological advances present both threats and opportunities, and the defence and security sectors are actively implementing AI, quantum computing, advanced robotics and novel materials. As these technologies continue to evolve it creates new opportunities for Private Equity and Venture Capital investors and we expect the Security-Tech ecosystem to continue to thrive and grow in influence.
“Cybersecurity, Intelligence & Security and Defence assets remain highly attractive. Private Equity investment is crucial for accelerating innovation, market readiness and maintaining our operation edge over our adversaries”, concluded Croker.
