Defense technology investments reach record levels

Investments in defense technology are reaching historic highs, driven by geopolitical uncertainty, increased military spending, and advancements in artificial intelligence. According to the ‘The State of Defence Tech 2026’ report by Dealroom, venture capital funding for defense startups within NATO countries has reached $27.1 billion, making 2026 the most active year in the market's history. This follows $14.5 billion in 2025, with projections suggesting 2026 could reach $38.5 billion—nearly 2.7 times the previous year's total.

In Europe, defense tech startups have seen a massive surge. Funding reached $7.4 billion in the first ten months of 2026, compared to $2.6 billion in 2025. Projections suggest total European funding could hit $10.5 billion by year-end, representing a significant increase in the share of the European venture capital market from 4% to approximately 11%.

Germany leads European funding with $5.9 billion since 2020, followed by the United Kingdom and Finland. Munich has emerged as a primary European hub, accounting for $5.2 billion in funding since 2020, with 64% of that attributed to the company Helsing. While the United States maintains global leadership, the shift in investor interest reflects a long-term move toward companies developing drones, autonomous weapons systems, and surveillance technologies.