Sector Snapshot: Defense Tech Funding Hits Record High

Global defense spending is on the rise, and startups are vying for a larger share of the outlays.

Looks like there’s plenty of capital to go around too. Last year, world military expenditures rose 9% to top $2.7 trillion, per think tank Sipri’s estimate. It was the sharpest rise in more than 30 years.

Meanwhile, in startup-land, defense tech is also sizzling. This applies to virtually every metric, including total spending, round counts, large deals and unicorn creation. In fact, global investment in defense tech has already hit a record high this year.

The numbers: Funding to VC-backed startups in defense — defined here as the industries of military, national security and law enforcement — hit $7.7 billion across close to 100 deals in 2025, per Crunchbase data.

That’s already well over double last year’s investment tally, as charted below, and marks an all-time high for investment in the space.

Noteworthy recent rounds: Ultra-large rounds were key in boosting the totals. So far this year, at least 10 rounds of $200 million or more have gone to companies in defense categories, per Crunchbase data.

Anduril Industries, probably the most famous defense tech startup, was also this year’s top fundraiser. The Costa Mesa, California-based company closed a $2.5 billion Series G round this summer. Founders Fund led the financing, which more than doubled 8-year-old Anduril’s valuation to $30.5 billion.

Defense and critical infrastructure tech startup Chaos Industries, was another investor favorite. The Los Angeles-based startup locked up a $500 million Series D this month, just six months after closing a $275 million Series C. Founded in 2022, Chaos specializes in advanced detection, monitoring and communication for the defense and commercial sectors. The company develops a radar system that provides early warning and tracking capabilities against drones, missiles and aircraft.

Meanwhile, Austin-based Saronic has closed on considerable capital to develop autonomous surface vessels for naval and maritime use. The 3-year-old startup picked up $600 million in Series C funding early this year.

Europe is also upping its defense spending considerably, with EU expenditures reaching record levels in the wake of Russia’s attack on Ukraine. In tandem, defense-related startups in the region are attracting big checks. The frontrunner here is Munich-based Helsing, a startup focused on applying software to modernize and improve defense capabilities, which raised $694 million in Series D funding this summer.

Software is eating the military: Defense-focused investors are optimistic that the recent spike in startup funding to the space is an indicator of much more to come.

In an overview this year, Point72 Ventures, a venture investor with defense among its core focus areas, opined that in coming years “AI, autonomy, and software-first systems will redefine modern conflict with their prioritization of agility over mass and scale.”

Per Point72, much of the defense sector’s industrial base was designed for a different era, in which six- to eight-year timelines and “hardware-first thinking” were the norm. Today, it says, “that’s not going to cut it.” Recent conflicts have shown there’s an urgent need for new technologies including autonomous systems, electronic warfare and advanced manufacturing.

While we at Crunchbase News lack the expertise to opine on the demands of a modern military, we can say something about what venture checkbooks indicate about the space’s momentum. In this area, it’s clear that investors’ interest is on the rise. Given the relative youth of much of the defense startup pipeline, there’s also a high likelihood of bigger checks to come.