Defense tech went from ‘uninvestable’ by private capital to a $14.6B+ VC category. It’s not just because of ongoing conflict.
Three things came together…the government changed how it buys, VCs built their own investment rules and the cultural zeitgeist shifted
Palantir and Anduril are proof it works. Anduril’s valuation is closing in on Northrop Grumman’s and could soon surpass the other primes
The boom isn’t evenly spread. A handful of startups are getting most of the money. Some are calling it a bubble.
For founders and investors.. dual-use revenue, IP protection, and speed are a part of the checklist for getting funded.
I got very curious about the defense tech sector as I was writing an article a few weeks ago about the National Labs that were set up in the United States to drive advanced research in defense tech (and other science and tech projects).
For decades, startups and venture capital mostly stayed away from taking on defense tech ideas. The risk was too high. The outcome too unpredictable. The timeline super long. And the primary customer, the government, bureaucratic. Uninvestable!
