Private equity investment in security technology is accelerating, driven by rising geopolitical instability and increased government defence spending, according to research.
The security-tech sector has seen 191 direct investments since 2018, spanning cybersecurity, defence, intelligence, and surveillance technologies, according to research from Heligan Group, an intelligence-led investment and advisory group focused on global security firm.
Investment activity has risen across the UK, with 89 transactions recorded in the Southeast and 25 in the Midlands between 2018 and 2024, while deal volumes also increased in the Northwest and Scotland. The growing demand for advanced security solutions is reshaping the market and attracting more private equity interest, according to the researchers.
“Cybersecurity remains a standout sector for private equity, offering scalable, recurring revenues and a fragmented market ideal for buy-and-build strategies that enhance returns,” said Matt Croker, director at Heligan. “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.”
Cybersecurity takes centre stage in investor due diligence
The research has highlighted that 2024 was a record year for new security-tech investments despite a dip in 2022 and 2023. Looking ahead, 2025 is projected to exceed 2024 levels, reflecting a shift in government priorities toward national security, particularly in light of conflicts in Ukraine, Russia, and the Middle East.
“This geopolitical instability has driven structural change in governmental mindsets and budgets, expanding addressable markets—a crucial factor for investors,” Croker added.
Private equity platforms are increasingly turning to bolt-on transactions, particularly in cybersecurity and defence, where roll-up strategies are proving attractive. The sector’s recurring revenue models and evolving technology landscape are drawing sustained investor interest.
Technological innovation is playing a pivotal role in shaping the defence and security landscape. “Technological advances present both threats and opportunities, and the defence and security sectors are actively implementing AI, quantum computing, advanced robotics, and novel materials,” Croker said. “As these technologies evolve, they create new opportunities for private equity and venture capital investors, and we expect the security-tech ecosystem to continue to thrive.”
Governments are seeking dual-use technologies that can serve both military and civilian applications, further fueling private market investment. This shift is positioning security-tech as a key sector for long-term growth, supported by government, military, and law enforcement needs.
“Cybersecurity, intelligence, and defence assets remain highly attractive,” Croker concluded. “Private equity investment is crucial for accelerating innovation, market readiness, and maintaining our operational edge over adversaries.”
