Defense Tech Startups: The Companies, Valuations and Trends

Defense technology has gone from a niche that most venture investors avoided to one of the hottest areas of private investment. In 2026, Anduril reached a US$61 billion valuation, Helsing about US$18 billion and Shield AI US$12.7 billion, and European drone makers such as Quantum Systems and Tekever became multi-billion-dollar companies within a year. This guide covers the leading defense tech startups, how they make money, and why the sector is attracting so much capital.

The leading defense tech startups

Each name links to a full profile with funding history, products and sources.

Who they are

• Anduril (US) builds autonomous drones and aircraft, counter-drone systems, underwater vehicles, missiles and the Lattice software platform. It reported about US$2.2 billion in revenue for 2025.
• Helsing (Germany) makes AI defense software, strike drones, underwater gliders and an uncrewed combat jet, and has supplied drones to Ukraine.
• Shield AI (US) makes the Hivemind AI pilot and the V-BAT and X-BAT drones, and expects 2026 revenue of at least US$540 million.
• Saronic (US) builds autonomous ships and its own shipyards, with a US$392 million Navy contract.
• Quantum Systems (Germany) makes reconnaissance drones widely used in Ukraine and says it is profitable.
• Tekever (Portugal) makes long-endurance surveillance drones and sells intelligence as a service.
• Applied Intuition (US) supplies vehicle autonomy and simulation software to carmakers and, increasingly, militaries.
• Castelion (US) builds the Blackbeard hypersonic missile for low-cost mass production and says it has won more than US$500 million in US military contracts.
• Hadrian (US) runs automated factories that make precision parts for aerospace and defense, tackling bottlenecks in the supply chain.

Why investors changed their minds

For years, many venture investors avoided defense. Sales cycles were slow, the main customer was a single government, and some limited partners didn't want to own weapons makers. Several events changed that:

1. The war in Ukraine showed how cheap drones and fast software updates could reshape warfare, and how quickly militaries need new technology.
2. Rising defense budgets. NATO members agreed to sharply increase defense spending, and European governments created special funds and loosened borrowing rules.
3. Proof that startups can win big contracts. Anduril and others won programmes previously reserved for large prime contractors.
4. A shift in technology. Modern defense increasingly depends on software, AI, autonomy and electronics, areas where startups are strong.

How defense startups make money

Most revenue comes from governments, through development contracts, production contracts and support services. A key difference from traditional defense contractors is that startups often invest their own money to build products first and then sell them, rather than waiting to be paid for development. That lets them move faster and earn higher margins if a product wins, but means taking more risk upfront. Some, like Tekever, also sell services such as surveillance missions, and several sell software licences that can be installed on other companies' hardware.

Europe's defense startup boom

European defense tech has grown especially fast since 2022. Governments want suppliers based in Europe, partly to reduce dependence on the US. Helsing, Quantum Systems and Tekever all raised large rounds at sharply higher valuations in 2026. Combat experience in Ukraine has become a key selling point, because it proves products work under heavy electronic jamming. Our profiles of these companies explain the specific products and contracts behind their growth.

The risks

• Customer concentration: a single government can account for most revenue; budget fights and policy changes hit directly.
• Programme risk: losing a large competition can strand years of self-funded development.
• Manufacturing: moving from prototypes to mass production is hard and capital-intensive.
• Dependence on current conflicts: demand linked to Ukraine could change if the war ends.
• Export controls: sales abroad often require government approval.
• Ethics and reputation: autonomous weapons raise questions that can affect hiring and public support.

How to research a defense startup

Because many defense companies don't publish revenue, research relies on other sources:

• Contract awards: governments publish many contract awards, which show who is winning business and how much. In the US, contract databases and Department of Defense announcements are useful.
• Funding announcements and investor lists, which reveal valuation trends.
• Combat and exercise use, reported in defense media.
• Manufacturing announcements, such as new factories, which show confidence in future orders.

Our guide to researching a private company explains these sources in more detail.

Financing defense growth

Defense startups need large amounts of capital for factories and inventory. Beyond equity, many use debt and alternative structures; Shield AI raised US$500 million in non-dilutive preferred equity from Blackstone alongside its Series G. Our guide to venture debt covers how growth companies use debt alongside equity.

What to watch next

Watch large production contracts from NATO governments, IPO plans from the biggest players, consolidation through acquisitions, the effect of any ceasefire in Ukraine, and whether newer companies can manufacture at the volumes governments now want.

How defense procurement works

Selling to militaries is very different from selling to businesses. In the United States, most large purchases go through formal programmes with requirements, competitions, testing and multi-year budgets approved by Congress. A new product typically moves through several stages: research and prototyping contracts, small trial purchases, operational testing, and finally production contracts that can run for years. Each step can take months or years, and a programme can be cancelled or delayed by budget disputes. Traditional prime contractors are experienced at navigating this process, which has long been a barrier for startups.

Governments have tried to make it easier for new companies to compete. The US Department of Defense created organisations such as the Defense Innovation Unit and uses "other transaction authority" agreements that move faster than conventional contracts. Several European countries have set up innovation agencies and fast-track procurement for drones and counter-drone systems, often inspired by Ukraine's rapid adoption of new technology. Startups that understand these routes, and can show results in testing, have a much better chance of winning production orders.

The role of software and AI

A common thread among the most valuable defense startups is software. Anduril's Lattice, Shield AI's Hivemind and Helsing's AI systems are designed to run across many types of hardware, coordinating drones, sensors and weapons. Software can be updated quickly as threats change, a lesson from Ukraine, where electronic warfare tactics evolve within weeks. Software also scales differently from hardware: once built, it can be licensed to many platforms and customers. Investors value that potential, which helps explain why these companies command higher valuations than traditional defense manufacturers with similar revenue.

Autonomy is the other major theme. Militaries want systems that can operate with fewer people, in places too dangerous for crews, and in large numbers. Autonomous aircraft, ground vehicles and ships, like those built by Anduril, Shield AI and Saronic, aim to deliver that. They also raise difficult questions about how much decision-making should be left to machines, which governments are still working through.

Defense tech beyond weapons

Not all defense technology is about weapons. Many startups work on logistics, communications, cybersecurity, satellite imagery, training and simulation, and maintenance. Applied Intuition, for example, sells simulation and autonomy software used by both carmakers and militaries. These "dual-use" companies can sell to civilian and military customers, which spreads risk and can make them more attractive to investors who are cautious about pure weapons makers. Our profiles of individual companies explain where each sits on that spectrum.

Comparing the leaders on revenue

Revenue disclosure varies widely. Anduril reported about US$2.2 billion for 2025; Shield AI expects at least US$540 million in 2026; Quantum Systems says it is profitable; Tekever is described by an investor as profitable. Others, such as Helsing and Saronic, haven't published revenue. Comparing valuations with revenue where available suggests investors are paying high multiples, reflecting expectations that defense budgets for autonomy and AI will keep growing for years.

As more companies publish figures, often ahead of IPOs, it will become easier to judge which valuations are supported by real revenue.

Defense tech is also among the sectors most likely to see IPOs in coming years, which would bring full financial disclosure for the first time. Investors will then be able to compare startups directly with established prime contractors on revenue, margins and order backlogs.

Drones, counter-drone systems and hypersonics

Three newer additions to our defense coverage show how broad the sector has become. Skydio, the largest US drone maker, raised at US$4.4 billion in April 2026 as restrictions on Chinese drones increased demand for US-made alternatives. Epirus builds Leonidas, a high-power microwave system that disables drone swarms, and raised US$250 million in 2025. Hermeus is developing autonomous hypersonic aircraft and became a unicorn in April 2026. Our guide to drone companies covers the drone market in more detail.