- Defense-tech startups hit a funding record in 2025, with VC deal value rising to $49.1B from $27.2B in 2024.
- Equity funding more than doubled to $17.9B, led by the U.S. at $14.2B while Europe grew to $2.48B with faster deal-count growth.
- Investors concentrated on AI, autonomy, drones, and dual-use systems, with $4.7B flowing to manufacturing and scale-up capacity.
- Exits jumped to $54.4B, mostly via acquisitions, as mega-rounds (e.g., Anduril, Helsing, Saronic) reset valuations.
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The defense technology funding ecosystem underwent transformative growth in 2025. According to PitchBook, venture capital (VC) inflows into defense tech reached $49.1 billion, almost double the $27.2 billion recorded in 2024—this includes both pure defense and dual-use startups. Equity funding alone, per CB Insights, rose sharply from $7.3 billion to $17.9 billion.
Regionally, the U.S. is dominating both in deal size and investor interest: $14.2 billion of defense tech equity was raised domestically, nearly tripling prior year numbers, while Europe posted more modest growth—38% increase to $2.48 billion—but saw deal counts rise by 67% versus 30% in the U.S.
Technology focus continues to tilt toward artificial intelligence, autonomy, unmanned and dual-use systems, validated in the conflict in Ukraine. Investors are no longer betting on ideas alone—they expect fieldable systems, supply-chain robustness, and repeatable scale. Manufacturing-oriented investment rose to $4.7 billion across 39 deals in 2025, signaling that executional infrastructure is now being heavily funded.
Large funding rounds and exits have reshaped valuation norms. Anduril led with a $2.5 billion round valuing it at $30.5 billion. European players like Helsing and Saronic also saw mega-rounds. Exits, largely through acquisition, jumped to $54.4 billion, with Nvidia’s acquisition of Groq among the largest.
Strategically, three major implications emerge: (i) incumbents are likelier to acquire rather than internally build high-velocity defense capabilities; (ii) startups able to scale manufacturing and handle supply-chain complexity will capture outsized market value; (iii) ethical, regulatory, and procurement frameworks will remain friction points, especially in cross-border or dual-use contexts.
Supporting Notes
- Total VC deal value in defense tech reached $49.1 billion in 2025 vs $27.2 billion in 2024.
- Equity funding globally rose from $7.3 billion in 2024 to $17.9 billion in 2025.
- Overall venture funding across sectors rose 47% to $469.3 billion in 2025, with defense tech outpacing this growth.
- U.S. defense-tech equity funding: ~$14.2 billion in 2025 vs ~$5 billion in 2024; Europe: $2.48 billion in 2025, up 38%.
- Number of equity funding deals in Europe grew 67% to 100 deals; U.S. grew by 30% to 155 deals.
- Manufacturing-focused investment: $4.7 billion across 39 deals in 2025 vs $2.6 billion across 24 in 2024.
- Venture-tech exits jumped to $54.4 billion from $18.2 billion in 2024; major exit include Nvidia’s purchase of Groq.
- Notable mega-rounds: Anduril’s $2.5 billion Series G; Helsing raised about €600 million ($695 million) at €12 billion valuation; Saronic raised $600 million.
- Ukraine conflict seen as proof-point for drone and autonomous system effectiveness, altering investor perception.