Defence Innovation Funding Beyond DASA: Routes for UK SMEs

If you run a UK SME with defence or dual-use technology, the old "send DASA any idea, any time" route is no longer how this works. As of 21 October 2026, the live routes are UK Defence Innovation (UKDI) competitions with fixed windows, a NATO accelerator whose latest call has closed, and equity from government-backed investors. Which one is worth your time depends on your technology readiness level (TRL), your timing and whether you want a grant, a contract or an investor.

This is a map of the routes, with what is open now and who should not bother. UKDI's own scheme, including how DASA folded into it, is covered in our explainer on DASA and UKDI. Dates below come from GOV.UK and Innovate UK Business Connect pages checked on 21 October 2026, and they change often.

The routes at a glance

Sources: GOV.UK live funding opportunities (updated 15 October 2026), and the competition documents linked in each section.

UKDI competitions: what is actually open

Security Open Call 2026 Cycle 2. The competition document (GOV.UK, updated 6 October 2026) sets Stage 1 to close at 12:00 on 29 October 2026, with no extensions. Awards go up to £350,000 for a project with a testing and trialling option, or £150,000 for testing and trialling alone. Projects run for up to 12 months, or 18 with the option. Three focus areas are open: Home Office, the National Protective Security Authority and the Department for Transport. Stage 1 is a 900-word idea overview and you may submit a maximum of three proposals. Stage 2 is by invitation, opens on 1 December 2026 and closes on 28 January 2027.

Tactical Power Challenge. The challenge document (GOV.UK, published 15 October 2026) offers £2.45m excluding VAT, with the number of funded proposals left open. Funded projects start at TRL 4 and must finish at TRL 6, with a contract start aimed for March 2027 and completion by 31 March 2028. Stage 1 closes at 12:00 GMT on 10 November 2026. A second strand, Immediate Power Problem, is a market engagement exercise for technology already at TRL 6 or above with a strong chance of commercialisation within 12 months. The document does not state whether it carries funding, so ask the UKDI contact before assuming.

Both competitions require a UK business registered at Companies House, with the work done in the UK. Neither requires UK ownership. Both limit you to three proposals.

What comes next. GOV.UK lists Rapid Detection of Toxic Gases and Generation After Next Electro-Optics as expected in November 2026, and the Defence Technology Exploitation Programme (DTEP) with a date still to be confirmed. It also shows provisional Open Call cycles from January 2027, but says they are subject to stakeholder funding and may not run. The same page's update log says that table was removed, so confirm it is still there before planning around it.

Defence Innovation Loans: paused

GOV.UK states that the loan cycles are "currently paused while we work on a new, improved service" and points businesses to their local Innovation Partner (live funding opportunities page, 15 October 2026). Older guides still describe loans at fixed sizes and rates. Treat those as historical: no current terms have been published, so do not build a funding plan on them.

NATO DIANA: closed for now, but worth knowing

NATO's Defence Innovation Accelerator for the North Atlantic (DIANA) ran its 2027 cohort call from 1 June to 3 July 2026, so it is closed. According to the Innovate UK Business Connect listing, selected companies receive €100,000 in contractual funding for a six-month programme starting in January 2027, with up to €300,000 more available to top performers. It targets TRL 4 to 7, and the company must be incorporated, headquartered and majority-owned in NATO member nations. That ownership test is stricter than UKDI's, so a UK company with significant non-NATO ownership could fail it.

We found no published date for the next call. The previous two ran in the early summer, which suggests mid-2027, but that is an inference from two data points. Check DIANA's own site before relying on it.

Equity: the National Security Strategic Investment Fund

The National Security Strategic Investment Fund (NSSIF) is a government-backed investor in dual-use technology, run through the British Business Bank. It is not a grant and not a competition. We could not load the Bank's pages from our research environment on 21 October, so we have not verified its current cheque sizes or criteria. Third-party mirrors of written parliamentary answers from late 2025 describe co-investment, typically at seed or Series A, taking minority stakes. Use that as a lead to check directly, not as fact. If your cap table is not ready for outside equity, this is not your route.

What UKDI does not fund

UKDI's own guidance says it does not buy mature products and points those suppliers to a separate defence contracting route (GOV.UK, updated 23 September 2026). If your product is already built and priced, you are selling, not seeking R&D funding. Grants are for development risk, and a finished product has little to offer them.

Should you apply?

A defence route is probably not for you if any of these apply:

• You cannot name a defence or security user who has the problem you solve. Assessors score desirability first.
• Your TRL is far from the band asked for. Tactical Power wants TRL 4 to 6, and the Security Open Call finishes at TRL 6 or 7. Our TRL guide helps you place yourself honestly.
• You cannot make a 29 October or 10 November deadline without writing carelessly. A rushed Stage 1 wastes the limited proposals you are allowed.
• Your ownership fails the NATO test, in the case of DIANA.

It is a reasonable bet if a live challenge names your problem, your readiness fits the band and you can explain the user benefit in a few hundred words. Assessment is competitive and nothing improves your odds beyond making a clear case. Our post on when not to apply for Innovate UK funding sets out the same discipline for civilian competitions, and much of it carries over.

A dual-use company also has a second option: civilian competitions where the same technology qualifies on its commercial merits. That is an inference from how dual-use work is usually positioned, not a funder rule, so read each competition's scope before assuming a fit.

Where GrantHero fits

GrantHero helps you find competitions worth your time, check eligibility before you commit and put forward a stronger application, working with experienced grant experts. Discovery is free and covers grant matching and eligibility fit checks. Expert Support is £1,300 plus a 3% success fee, and Full Service is £2,500 plus a 3% success fee (pricing page, checked 21 October 2026). Our coverage is strongest for Innovate UK, and UKDI submissions run through a different service, so talk to us about a specific UKDI competition before assuming the paid inclusions apply. We would rather tell you not to apply than take your fee for a poor fit.