U.K.'s Own 'DARPA' Will Pour £165 Million Into Cyber Security

The British government has announced a bold series of new programs to boost its cyber security defences, including a new, £165 million ($250 million) fund that will see the government buy or invest in cyber security startups. Britain will also double its public spending on fighting cybercrime to £1.9 billion a year by 2020. The extra money will be spent on protecting the British public’s online assets as well as public infrastructure like hospitals and electricity grids, Chancellor George Osborne said in a speech at GCHQ, Britain’s main intelligence service focused on cyber crime.

The £165 million Defence and Cyber Innovation Fund will “support innovative procurement across both defence and cyber security,” Osborne said. “It will mean that we support our cyber sector at the same time as we need to solve investing in solutions to the hardest cyber problems that government faces.”

“The threats to our country in cyber space come from a range of places – from individual hackers, criminal gangs, terrorist groups and hostile powers,” he added.

The new program is similar in its intent to DARPA, the American Department of Defence agency that provides funding to startups who are creating cutting-edge technology, whose intellectual property can then be shared with the U.S. government. Among the projects DARPA is funding are jetpacks that can help soldiers run as fast as Olympic athletes and implants known as ‘neuroprosthetics’ that can treat memory loss.

Britain’s fund is dwarfed in its scope by DARPA, which had a budget of nearly $3 billion for 2015.  It may also end up being more closely aligned with another U.S. funding agency known as In-Q-Tel, based in Arlington, Virginia.

While DARPA covers a broad range of technologies including robotics and health, In-Q-Tel targets software startups and particularly those focused on data analytics, with the aim of  supporting America’s Central Intelligence Agency and other intelligence services.

Since it was created in 1999, In-Q-Tel has reportedly funded 200 companies with investments in the $1 million to $3 million range.

British startups with a focus on cyber security and analytics software will see the new public funding as great news for their fundraising prospects, at a time where Silicon Valley’s leading venture capitalists have warned that the days of privately funding startups at ultra-high valuations are coming to an end and private funding may be harder to come by.

Eileen Burbidge, a partner at venture capital firm Passion Capital and advisor to Cyber London, a local incubator for cyber security startups, says she and local firms have been waiting for ”years” for a funding announcement like this from the government, one that emulates the likes of In-Q-Tel.

“Devil is always in the details but I’m genuinely encouraged to see emphasis and investment committed to public and private sector collaboration,” Burbidge said.