Defense tech venture 2026: $14.6B in five months, while deal count stands still

Crunchbase data shows startups in the military, national security and law enforcement categories raised more than $14.6 billion in the first five months of 2026, beating the $9.6 billion full-year record of 2025. For scale: the sector took in $1.6 billion in 2020, $3.9 billion in 2021, then flatlined between roughly $2.8 billion and $3.8 billion from 2022 through 2024. A field many funds once avoided is now the fastest-growing category outside artificial intelligence.

Dollars soar, round counts barely move

The important number is not the total but the denominator. Crunchbase counts 107 venture rounds in the first five months of 2026, against 206 deals in all of 2025 — only slightly ahead of last year's pace. Capital blowing past the old record while deal counts stay flat means average round size is inflating fast, and most of the money stops at a small group of already-established companies.

Anduril Industries is the clearest case: in May 2026 it announced another $5 billion at a $61 billion valuation, double the $30.5 billion it carried less than a year earlier. Alongside it: Shield AI's $2 billion round, Saronic's $1.75 billion Series D, and Mach's $300 million Series C at a $1.8 billion valuation. A handful of names account for most of the $14.6 billion.

Earlier stages look calmer but still positive. Startup Genome's GSER 2026 — which tracks DefenseTech as a discrete category for the first time — records roughly 60% growth in Series A value and about 15% growth in global deal counts over the past year. The early-stage door is widening, but far more slowly than late-stage cheques are swelling.

Corporate and strategic capital sits at the table with VCs

What distinguishes this cycle is how early corporate venture capital and strategic funds show up. Firestorm's $82 million Series B — the San Diego builder of modular drone systems — included Booz Allen Ventures, IQT and Lockheed Martin alongside New Enterprise Associates. In the same week, space security startup True Anomaly raised $600 million.

Europe shows a similar structure at smaller scale. Per Dealroom and the NATO Innovation Fund, European defence, security and resilience startups raised a record $8.7 billion in 2025, up 55% year on year and nearly four times the level of five years earlier. Early-2026 European deals still sit in the tens of millions: Kelluu (autonomous airships, Finland) raised EUR 15 million led by the NATO Innovation Fund, Orqa (FPV drones, Croatia) EUR 12.7 million with Lightspeed participating, and Kyiv-based Buntar Aerospace $10.4 million.

• More dollars without a proportionally wider door: 107 rounds in five months versus 206 in all of 2025.
• Late-stage valuations move fast: Anduril doubled its valuation in under a year.
• Likely acquirers appear early on the cap table: Lockheed Martin, Booz Allen Ventures, IQT.

A cycle fed by public budgets

Unlike enterprise software, revenue here depends on public procurement cycles and defense spending commitments. That is both the support and the risk: while budgets rise, valuations are justified by long-term contracts; when budgets plateau, valuations that doubled in a year must be re-tested. For early-stage investors the key due diligence question is not whether the product is good, but whether the company has a real path to contracts rather than a demo plus a geopolitical narrative.