Defence, cash on hand 12 billion for start-ups

The global defense technology sector is experiencing a significant surge in investment, driven by evolving military strategies and technological advancements. According to data from PitchBook cited by the Financial Times, venture capital firms have already allocated over $12.3 billion to defense startups since the beginning of 2026—a figure that surpasses the entire amount invested in the same sector during the entirety of 2025. This rapid influx of capital reflects a broader shift in how nations approach national security, particularly as conflicts become increasingly complex and hybrid in nature.

The transformation of warfare—from traditional land and air battles to more sophisticated forms involving cyber operations, artificial intelligence, and autonomous systems—has created new opportunities for innovation within the defense industry. Startups specializing in drone technology, autonomous vessels, and advanced surveillance systems are now central to modern military capabilities. For instance, British startup Kraken Technology, which develops autonomous ships designed for mine clearance, has been selected by the Royal Navy to operate in the Strait of Hormuz. The company is currently seeking approximately $100 million in funding, with a valuation close to $1 billion. Similarly, American venture capital firm Advent has announced plans to invest up to $1 billion in emerging defense technologies, highlighting the growing appetite among private investors for high-risk, high-reward ventures in this space.

In the United States, the defense technology market has seen particularly robust growth. American startups have attracted nearly $11.4 billion in investments so far this year, with a single company, Anduril Industries, accounting for almost half of that sum. Based in Silicon Valley, Anduril is known for its drones and surveillance towers, and recently raised $5 billion in a funding round that pushed its valuation to $61 billion. This level of investment underscores the confidence of both public and private sectors in the potential of these technologies to redefine battlefield dynamics.

Meanwhile, European countries are also witnessing increased activity. From January to date, European-based defense startups have collectively secured around $460 million in funding, though this figure does not account for ongoing or unfunded initiatives. In May, German drone manufacturer Helsing launched a fundraising campaign aiming to raise $1.2 billion, which would bring its valuation to $18 billion. Another notable example is the German kamikaze drone producer Stark, which is raising $2.5 billion, and Finnish-Polish satellite company Iceye, which recently secured one billion euros in funding, achieving a valuation of $10 billion.

This trend is not limited to private investment. Governments are also playing a crucial role in shaping the future of defense technology through strategic programs. Italy, the United Kingdom, and Japan have joined forces in a joint initiative called Gcap, where Italian aerospace giant Leonardo leads the effort alongside British defense contractor BAE Systems and Japanese engineering firm Mitsubishi Heavy Industries. The goal is to develop a sixth-generation fighter jet capable of replacing the current Eurofighter fleet by 2035. This collaboration marks a significant step toward international cooperation in defense innovation.

Recently, Leonardo’s newly appointed CEO, Lorenzo Mariani, emphasized Italy's readiness to welcome Germany into the Gcap project. This move comes after Berlin's withdrawal from the rival Future Combat Air System (FCAS) project, which was intended to involve France and Spain. The inclusion of Germany into the Gcap initiative signals a strategic realignment in Europe’s defense landscape, reflecting the continent’s desire to strengthen collective security through shared technological advancement. As the race for cutting-edge defense solutions intensifies, the implications for global military strategy and economic competition will likely continue to evolve.