Defense and aerospace startups have already raised more than $19 billion in 2025, according to data firm PitchBook.
This comes as the Pentagon, under Defense Secretary Pete Hegseth, calls for a total overhaul of the military’s acquisition system to “focus on speed and volume,” he said in a speech earlier this month. The military’s push towards faster and cheaper innovation is resonating in Silicon Valley, with investors pouring record amounts of cash into AI-powered weapons, drones, and other defense-focused startups.
The “objective is simple,” Hegseth continued. “Transform the entire acquisition system to operate on a wartime footing.”
Last year, global venture capital investments in defense and aerospace companies totaled over $10 billion. All signs point to this year nearly doubling last: As of late November, global defense and aerospace funding has surpassed $19 billion, per PitchBook.
As if Silicon Valley needed any more reassurance from the military’s top brass of its bet on defense tech, Army Secretary Dan Driscoll recently said the Army aims to work less with traditional defense businesses and procure more weapons from startups.
These proclamations highlight the Trump administration’s push to modernize the Defense Department and its armaments with Silicon Valley’s best and brightest.
The enthusiasm has spurred something of an arms race on the opposite coast. In El Segundo, Calif., where a handful of traditional defense contractors are headquartered, startups are setting up shop in warehouses adorned with American flags and squat racks and racing to build battlefield-ready tech. They’ve constructed FPV drones, used AI to automate factory floors, and sent capsules to space. Last week, an El Segundo-based nuclear startup said it split the atom.
It’s also led to mega rounds and soaring valuations. In February, Saronic, which makes autonomous ships, raised $600 million at a $4 billion valuation led by solo capitalist Elad Gil. Anduril Industries, Palmer Luckey’s autonomous weapons startup, raised $2.5 billion at a $30.5 billion valuation in June; Peter Thiel’s Founders Fund led the round with a $1 billion check. In mid November, Chaos Industries, a startup building radar tech to help militaries detect autonomous threats, raised $510 million led by Valor Equity Partners at a $4.5 billion valuation.
Business Insider has covered a handful of this year’s notable defense tech deals. Here are a few:
Onebrief raises $20 million at a $1.1 billion valuation
The Honolulu-based startup raised a $20 million Series C extension in June, led by Battery Ventures, bringing its total funding to over $120 million and pushing its valuation past $1 billion. That’s an over $400 million increase in valuation since January, when General Catalyst led a $50 million Series C round that valued Onebrief at $650 million.
Palantir alums raise $15 million to cut through red tape
Former Palantir employees Zachary Long, Eric Schwartz, and Ben Fichter founded Conductor AI in 2023. The startup uses artificial intelligence to help those in large organizations — like the US government — fill out paperwork and effectively resolve compliance issues, and has raised around $15 million for its Series A round led by Lux Capital.
Dirac secures $11 million to take the guesswork out of complex machinery assembly
Fil Aronshtein, Dirac’s cofounder and CEO, says BuildOS, the company’s main product, is a software tool that uses AI to generate assembly instructions for manufacturers. The startup raised nearly $11 million from Founders Fund and Coatue Management — and struck a new partnership with industrial manufacturing giant Siemens.
A former SpaceX engineer raised $10 million in 36 hours
AndrenaM’s rapid fundraise signals just how eager investors are about the new wave of defense tech. The startup, cofounded by Matej Cernosek and Alex Chu, uses AI to analyze sonar data and deliver real-time insights, aiming to give this legacy defense tool a high-tech upgrade.
A 21-year-old founder who cut open his leg to demo his biotech raises $4.3 million
Jake Adler poured his actual blood into his startup. Adler, the founder of Pilgrim, a biotech and defense startup building medical devices for the battlefield, filmed himself testing his flagship product — a hemostatic dressing he calls Kingsfoil — by cutting open both of his thighs. Following the video, the Redwood, Calif.-based startup raised $4.3 million in seed funding.
