PARIS — Protection-technology startups had their greatest funding 12 months ever in 2025, with traders eager to finance autonomous programs and synthetic intelligence for the battlefield, based on information from business-intelligence suppliers that observe enterprise capital funding.
The worth of enterprise capital offers in protection know-how jumped to a report $49.1 billion final 12 months from $27.2 billion a 12 months earlier, based on information compiled by PitchBook and shared with Protection Information. The PitchBook information contains startups that present dual-use know-how, together with corporations whose major markets are civilian but in addition have protection purposes.
Fairness funding for protection know-how startups greater than doubled to $17.9 billion final 12 months from $7.3 billion in 2024, based on CB Insights, which makes use of its personal classification methodology and in addition contains dual-use corporations. Protection tech outpaced general fairness funding, which rose 47% to $469.3 billion on the again of rising funds for AI startups, primarily based on CB Insights information.
Investor cash is flowing into protection as army spending rises globally, with a few of the greatest finances will increase in Europe. In the meantime, battlefield use of drones and AI-enabled programs in Ukraine has helped validate these applied sciences, with a deal with low-cost, scalable programs and sooner information processing and decision-making.
“Ukraine demonstrated drone and autonomous system effectiveness in actual fight, basically shifting how VCs view protection investments,” stated Jason Saltzman, head of insights at CB Insights, in an emailed remark. He stated the rising investor base and funding alternatives in dual-use synthetic intelligence helped drive report defense-tech funding.
In 2026, defense-tech startups must show to traders they will flip funding into precise manufacturing at scale, based on Saltzman.
Manufacturing scale is “the following aggressive battleground” within the defense-tech house, stated Ali Javaheri, senior analyst for rising know-how at PitchBook, in emailed feedback. “We’re going to see a concerted push to broaden throughput by investments not simply in new services, however within the manufacturing toolchain itself, together with robotics and software-augmented manufacturing.”
American defense-technology startups attracted many of the cash final 12 months, with fairness funding within the U.S. almost tripling to $14.2 billion from $5 billion a 12 months earlier, based on CB Insights. That compares to defense-tech fairness funding in Europe rising 38% to $2.48 billion.
The distinction is partly defined by extra giant funding rounds in the USA final 12 months, together with Anduril elevating $2.5 billion in June, valuing the California-based maker of autonomous programs and battlefield software program at $30.5 billion. Texas-based Saronic, which makes uncrewed floor vessels, raised $600 million in February at a valuation of $4 billion.
The comparability was extra favorable for Europe by way of the depend of defense-tech startups that acquired investor backing, based on the CB Insights information, with the variety of fairness funding offers there rising 67% to 100, in comparison with the tally within the U.S. rising 30% to 155 offers.
Final 12 months’s funding rounds for primarily defense-focused startups had been led by Anduril, Helsing and Saronic, the identical trio that topped the charts in 2024, based on Crunchbase, one other firm that compiles VC funding information. Helsing, which develops battlefield AI software program, raised €600 million ($695 million) in June at a reported valuation of €12 billion.
The variety of corporations actively investing in protection tech elevated 41% final 12 months, with “mainstream enterprise” dropping earlier moral objections to investing in protection and reframing it as supporting democratic values, based on Saltzman at CB Insights. AI opened new funding alternatives in each pure protection purposes and broader dual-use know-how, he stated.
The emphasis in 2026 is shifting in direction of the pace of getting programs fielded, and budgets this 12 months will prioritize artificial-intelligence enabled programs, autonomous platforms and collaborative fight plane, based on Saltzman.
“Progress will depend upon whether or not these startups can remedy the more durable downside: translating enterprise capital into large-scale manufacturing capability and navigating supply-chain constraints which have stored most from reaching battlefield scale,” Saltzman stated.
Manufacturing-focused protection funding rose to $4.7 billion throughout 39 offers in 2025 from $2.6 billion throughout 24 offers in 2024, based on PitchBook information printed in a separate analysis notice on Friday. A lot of the scale-up capital for manufacturing between 2022 and 2025 went to drones, house programs and infrastructure, and protection electronics and sensing, based on the info.
The implication for traders going into 2026 might be that “execution, not invention, will decide returns,” Javaheri wrote. “Firms that convert services into repeatable output will disproportionately seize each capital and contract velocity.”
Protection tech funding will proceed to develop in 2026, based on Javaheri, in feedback to Protection Information. He stated autonomy will stay a core focus, however broadening past aerial programs into maritime and floor autos particularly, whereas business consolidation will present a transparent acceleration.
“I might not be shocked to see a serious venture-backed protection tech startup acquired by a standard prime contractor within the first half of the 12 months as incumbents look to purchase confirmed capabilities moderately than construct them from scratch,” Javaheri stated.
Enterprise capital exits from defense-tech investments additionally jumped to a report final 12 months, rising to $54.4 billion from $18.2 billion in 2024, PitchBook information present. A lot of the exits had been by acquisitions of defense-tech startups, led by Nvidia’s €20 billion buy of Groq, which makes AI {hardware} and software program for purposes together with army autonomous programs.
Rudy Ruitenberg is a Europe correspondent for Protection Information. He began his profession at Bloomberg Information and has expertise reporting on know-how, commodity markets and politics.
