GoKawiilThis report is from this week's The Tech Download newsletter. Like what you see? You can subscribe here.
Once considered a taboo sector to funnel money into by venture capitalists, defense tech has seen a remarkable shift over the past few years.
It raised just $869 million globally in 2020, according to deal-counting platform Dealroom — a figure that rose more than tenfold to hit $11.2 billion in 2025.
A lot can change in five years.
Rising geopolitical tensions across the world have led states scrambling to modernize militaries and increasing commercial opportunities for new defense startups.
Russia's war in Ukraine has given rise to a new kind of drone warfare. It also provided a test bed for new defense technology developed by startups, and now tech companies have their sights set on opportunities brought about by the conflict in the Middle East.
Over the past week, defense tech startups in the U.S. and Europe have told reporters at CNBC that they're seeing increased demand and are eyeing commercial deals as a result of the conflict.