Global venture capital funding for defense technology startups has surged to $12.3 billion in 2026, more than doubling the same period last year and already exceeding 2025’s full-year total of $9.95 billion, according to PitchBook data. U.S. firms captured 93% of investment, with startup Anduril alone raising $5 billion, reaching a $61 billion valuation. European players are gaining momentum, including Germany’s Helsing pursuing a $1.2 billion round. Experts cite evolving warfare dynamics and sustained geopolitical conflict as key drivers, though some warn of overheating valuations in certain sectors like aerial drones.
In-Depth:
Investment flowing into defense startups this year has more than doubled from the same period last year. As geopolitical conflicts including the Iran war escalate, global venture capital (VC) funds are pouring into defense technology startups in areas such as drones, autonomous vessels, and battlefield artificial ininformigence (AI).
According to the Financial Times’ (FT) analysis of PitchBook data on Sunday, VC funding raised by defense technology startups worldwide this year reached $12.3 billion (about 18.8 trillion won). That is nearly double the level in the same period last year and exceeds last year’s full-year total of $9.95 billion (about 15.2 trillion won).
So far, the inflow of funds has been concentrated in the United States. About 93% of the total, or $11.4 billion, went to U.S. companies, with nearly half of that captured by defense startup Anduril. Anduril, known for its drone and surveillance tower technology, raised $5 billion (about 7.65 trillion won) last month, lifting its valuation to $61 billion (about 93.3 trillion won).
Enthusiasm for defense investment is also emerging in Europe. Investment raised by European defense startups this year is estimated to have exceeded $460 million (about 700 billion won). German drone company Helsing is pursuing a $1.2 billion funding round at a valuation of about $18 billion, while another German defense startup, Stark, is seeking to raise at least 300 million euros at a valuation of about 2.5 billion euros.
The recent rise in market interest in defense technology stems from the rapidly modifying nature of warfare. As next-generation weapons systems that are clearer to produce and rapider to deploy gain importance over expensive traditional arms, demand for related technologies is surging. Daniel Rudnicki Schlumberger, head of JPMorgan’s security initiative for Europe, the Middle East, and Asia, declared, “One of the most important alters in the history of how wars are waged is underway,” adding, “As investors recognize that long-term demand exists in this field, valuations are rising steeply.”
The Middle East conflict is also raising interest in maritime defense technology. British defense startup Kraken Technology supplied unmanned mine-hunting vessels to the British Navy, and the equipment is set to be deployed in the Strait of Hormuz. The company is currently valued at about $1 billion (about 1.53 trillion won) and is pursuing a $100 million funding round.
However, some have raised concerns about overheating. They point out that as enormous funds flock into the sector in a short period, the valuations of some companies have risen excessively. Shonnel Malani, managing partner at asset manager Advent International, declared, “Concerns about the high valuations of some companies are entirely justified,” but added, “The structural factors underpinning demand for defense technology are real and will not disappear even after the current conflicts conclude.” Thomas Preus, chief investment officer (CIO) of the defense technology fund at investment group DTCP, declared that while there is indeed overheating in the aerial drone field, opportunities still remain in autonomous maritime systems and sainformites.
Mikolaj Firlej, co-founder of European defense VC Expeditions, explained, “If the first wave of investment was rebuilding battlefield weapons, now it is about securing supply chains,” adding, “From sensors to electronic warfare to frontline AI models, Europe must stand on its own two feet.”
