Traditional defense companies invest frequently in tech startups
This year, the world's largest defense companies are investing more than ever in military startups.
Published on July 27, 2026
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The world’s largest defense companies are investing more than ever in military startups this year, according to the Financial Times, citing data from research firm Dealroom. Traditional arms manufacturers are increasingly opening their wallets for young technology companies working on drones, autonomous systems, and other new military applications.
$4.1 billion
According to Dealroom, major defense contractors participated in investment rounds totaling $4.1 billion this year. Companies such as Lockheed Martin, BAE Systems, and Airbus are seeking to gain access to technologies that are rapidly changing the way war is waged.
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Technology is becoming increasingly important
Recent conflicts, such as the war in Ukraine, have made it clear that modern warfare is less and less about large weapons systems alone, such as fighter jets and tanks. Low-cost drones, smart software, and autonomous systems are playing an increasingly important role. Governments are therefore increasing their defense budgets and seeking technology that can be developed and produced more quickly.
As a result, the defense industry itself is also changing. Whereas large companies used to focus primarily on developing their own products, they are now increasingly acting as investors. They are taking stakes in promising startups or acquiring these companies outright.
German drone manufacturer: $1.2 billion
These investments are not limited to small amounts. For example, the German drone manufacturer Quantum Systems recently raised $1.2 billion, thanks in part to Airbus. The British company Kraken Technology also managed to attract $175 million in new capital, with support from, among others, the German company Rheinmetall.
Research and development
In addition to investments, major defense companies are also increasing their spending on research and development. According to research firm Vertical Research Partners, the combined R&D spending of thirteen major weapons manufacturers will rise by more than 25 percent to $11.6 billion between 2021 and 2026.
A shift is necessary
According to experts, this shift is necessary. Rapid technological developments and the lessons learned from recent wars are forcing established defense companies to collaborate more closely with smaller, innovative players. In this way, they hope to continue playing a key role on the battlefield in the future.