Global defense spending has reached unprecedented levels, with military expenditures surpassing $2.7 trillion in 2025, marking a significant 9% increase, according to the Stockholm International Peace Research Institute (Sipri). This surge represents the sharpest rise in over three decades, prompting a wave of interest from startups eager to capture a larger share of this growing market.
Investment in defense technology is experiencing a historic boom, with early 2025 figures indicating that funding for venture capital-backed startups in the defense sector has hit an all-time high of **$7.7 billion** across nearly 100 deals, as reported by Crunchbase. This figure is more than double the amount invested in the previous year, underscoring the increasing confidence in defense-related ventures.
Major Investments in Defense Startups
The landscape for defense tech startups is thriving, particularly driven by substantial funding rounds. Notably, **Anduril Industries**, often regarded as a leading name in defense technology, secured **$2.5 billion** in a Series G funding round this summer, significantly boosting its valuation to **$30.5 billion**. Founded in 2017 and based in Costa Mesa, California, Anduril has become synonymous with innovation in military technology.
Another prominent player in this sector, **Chaos Industries**, based in Los Angeles, recently closed a **$500 million** Series D round just six months after raising **$275 million** in a Series C round. Established in 2022, Chaos focuses on advanced detection and monitoring systems that enhance defense capabilities against modern threats, such as drones and missiles.
In Texas, **Saronic** has also made headlines by securing **$600 million** in Series C funding for its development of autonomous surface vessels designed for naval applications. This robust funding environment reflects a broader trend where defense startups are attracting significant investments to develop innovative solutions.
European Defense Spending and Startup Growth
Europe is not lagging behind in defense investments, as military spending in the region has surged to record levels, particularly following Russia’s invasion of Ukraine. This increase has created fertile ground for defense startups, with notable examples such as **Helsing**, a Munich-based company specializing in software to enhance defense capabilities. Helsing recently raised **$694 million** in Series D funding, further demonstrating the growing appetite for advanced defense solutions across Europe.
Industry experts, including those at **Point72 Ventures**, forecast that the surge in defense startup funding signals a transformative shift in military technology. The firm highlights that advancements in artificial intelligence, autonomy, and software-driven systems will redefine modern warfare, emphasizing agility over traditional mass and scale approaches. According to Point72, much of the current defense industrial base is outdated, having been designed for a different era where hardware-centric strategies prevailed.
Recent conflicts have underscored the urgent need for innovative technologies, including autonomous systems and electronic warfare capabilities. Investors are clearly recognizing this shift, as reflected in the increasing flow of capital into the defense tech sector.
As the landscape of defense technology evolves, the substantial investments made in early-stage companies suggest a promising future for the industry. With many startups still in their infancy, there is a strong likelihood of even larger funding rounds in the coming years, as venture capitalists continue to seek opportunities within this dynamic market.
In summary, the defense tech sector is undergoing a significant transformation driven by increased spending and investor interest, positioning it for further growth as it adapts to the demands of modern military needs.
