Defense Tech Startups Pull in $3B as Investor Interest Grows

Venture capital funding for defense technology startups picked up momentum last year. While the sector saw several headline-grabbing funding rounds, the overall amount raised was still lower than many industry watchers expected.

According to data from Crunchbase, venture-backed companies working in defense-related fields — including military, national security, and law enforcement — secured about $3 billion across 102 deals in 2024. That represents a modest increase compared with $2.7 billion raised through 100 deals in 2023, marking an 11% rise year over year.

At first glance, the $3 billion total may seem surprisingly small. That’s largely because a single company accounted for half of the funding. In August, Anduril Industries closed a massive $1.5 billion Series F round, co-led by Founders Fund and Sands Capital Ventures. The deal valued the Costa Mesa, California-based company at $14 billion and became one of the biggest defense tech investments of the year.

A shift in investor attitudes

Despite the relatively modest total funding figure, 2024 still turned out to be a solid year for defense tech startups. The increase in both the number of deals and the capital invested signals a gradual shift in how venture investors view the sector.

Not long ago, many venture capital firms avoided defense technology altogether. Ethical concerns, along with pressure from limited partners, often made the industry a difficult fit for Silicon Valley-style investing.

That perception began changing around 2022, when Anduril raised a major $1.5 billion Series E round that pushed its valuation to $8.5 billion. Since then, investors have started paying closer attention to opportunities in the defense space.

Ethan Thornton, CEO of Mach Industries, believes venture firms are now approaching the industry with a more thoughtful strategy.

According to Thornton, investors have become better at identifying strong teams, recognizing real market demand, and deciding which defense-related problems are worth solving. As a result, capital is being deployed more efficiently across the sector.

Big funding rounds highlight the trend

Anduril’s round may have dominated headlines, but several other startups also raised significant capital last year.

Among the biggest deals:

• In July, Helsing raised about $489 million in a funding round led by General Catalyst, giving the German startup a $5.4 billion valuation. The company develops artificial intelligence software designed to enhance military systems such as drones and fighter jets while improving battlefield decision-making.
• Just a week later, autonomous maritime technology company Saronic secured $175 million in a Series B led by Andreessen Horowitz, reaching a $1 billion valuation.
• In the fourth quarter, infrastructure and defense technology firm Chaos Industries raised $145 million in a Series B.

Why defense tech is attracting capital

Several factors are driving investor interest. Daniel Ateya from RTX Ventures points to rising geopolitical tensions, growing demand from defense customers, and increasing support from government agencies.

Certain technologies are also drawing particular attention from venture firms. These include artificial intelligence, autonomous systems, advanced propulsion technologies, and space-related innovations.

Growth likely to continue

The defense tech sector may continue expanding in the coming years. Many of the technologies developed for military applications — such as AI and cybersecurity — also have strong commercial uses in industries like energy, manufacturing, and infrastructure.

Large venture firms are already betting on this overlap. Firms such as Andreessen Horowitz, Alumni Ventures, and 8VC have all made multiple investments in the sector. Andreessen Horowitz even launched an “American Dynamism” initiative focused on industries tied to national security, including aerospace, defense, and manufacturing.

New deals are already appearing in 2025. Radar technology startup Hidden Level recently raised $65 million in a Series C led by DFJ Growth. Meanwhile, defense manufacturer Castelion secured $100 million in Series A funding, with Lightspeed Venture Partners leading the equity portion.

With global geopolitical tensions continuing to rise, many investors believe funding for defense technology startups is unlikely to slow anytime soon.

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