Investors are pouring billions into defence technology start-ups as wars in Ukraine and the Gulf turn drones, autonomous vessels and battlefield AI into one of this year’s hottest venture capital bets.
Companies in the sector have raised $12.3bn from VC funds since the start of 2026, almost double the amount raised in the same period last year and more than the $9.95bn achieved in the whole of last year, according to data compiled for the Financial Times by PitchBook.
The surge comes as conflicts expose demand for next-generation weapons systems that are cheaper and faster to produce. However, with some funds willing to pay increasing multiples as they bet heightened government defence spending will endure, it has also raised concerns that parts of the market are overheating.