Hard Power Returns: Why Investors Are Betting on Defense

The era of Silicon Valley distancing itself from the Pentagon is effectively over. As geopolitical tensions rise, the "Peace Dividend" that characterized the post-Cold War world has ended. In its place, a new mandate has emerged for the tech sector: modernizing the West’s defense capabilities through software-defined autonomy and rapid manufacturing.

This shift isn't just about patriotism; it's about a structural gap in national security that legacy primes have struggled to fill. The conflict in Ukraine exposed the fragility of Western supply chains and the dominance of cheap, dispensable systems like drones over expensive, exquisite platforms. Today, investors are funding the companies that promise to rebuild the arsenal of democracy faster, cheaper, and smarter.

The Data: A Market in Transformation

The numbers confirm that 2025 was a watershed year for the sector. According to PitchBook’s 2025 Vertical Snapshot, investor interest in defense technology shattered previous records. In the first half of 2025 alone, defense tech startups raised $28.4 billion, surpassing the total capital deployed in full-year 2023. Q2 of 2025 alone saw a staggering $19.1 billion deployed.

While external funding data tells part of the story, proprietary activity on the EquityZen platform reveals a dramatic shift in investor psychology. We analyzed three key datasets from 2022 through the end of 2025, and the conclusion is clear: Defense and Aerospace, the main industries comprising defense tech companies, have become primary drivers of investor interest.

1. Interest Goes Vertical 

As shown by Indications of Interest, investor demand for defense technology was relatively flat throughout 2023. However, starting in late 2024, interest went parabolic.

This surge aligns with the maturation of key private defense companies. As these companies moved from R&D projects to active government contracts, the private market responded with a level of demand most recently reserved for generative AI breakouts.

2. The "Hard Tech" Flip

Fintech have dominated the private markets. But 2025 marked a turning point where "Hard Power" overtook software.

By Q4 2025, Aerospace (#2) and National Security (#4) had firmly established themselves in the top tier of popularity on EquityZen, leapfrogging traditional heavyweights like SaaS (#7). This rotation suggests investors are moving capital into physical industries with high barriers to entry and the revenue potential of massive government contracts.

3. The Price of Conviction

The relative scarcity of defense tech investment opportunities has a price. In 2023, defense companies on the secondary market frequently traded at deep discounts (as low as -63.6%).

Today, the dynamic has inverted.

Throughout 2025, defense companies traded at significant premiums, peaking at +144.9% in Q1. This showcases that investors are willing to pay above last-round prices to secure access to these high-growth companies. This demand is underpinned by a concentration of capital among a smaller number of players than other tech verticals. PitchBook data reveals that while the US Aerospace and Defense sector is comprised of 22 VC-backed unicorns, the Artificial Intelligence and Machine Learning sector has nearly 400. This relative scarcity can create a supply-demand imbalance that favors sellers.¹

The New Guard

The data above is driven by a specific cohort of companies that are not just writing code, but building the physical infrastructure required for 21st-century deterrence. Here is our list of top venture-backed defense companies, ranked by EquityZen popularity score.

1. The Standard Bearer: Anduril Industries

Anduril has effectively written the playbook for the modern defense unicorn. By prioritizing software-defined hardware and rapid manufacturing, they have introduced a new operating model that competes directly with traditional defense contractors.

• EquityZen Popularity Score: 98
• Funding + Scale: In June 2025, Anduril raised a massive $2.5 billion Series G led by Founders Fund. This round doubled the company's valuation to $30.5 billion, cementing its status as one of the most valuable private defense companies in the world.
• Key Innovation: The capital is dedicated to Arsenal-1, a hyperscale manufacturing initiative designed to produce tens of thousands of autonomous systems annually. This includes the Roadrunner, a vertical take-off and landing (VTOL) interceptor designed to hunt aerial threats.
• Potential Risks: Anduril relies heavily on fixed-price contracts, which can erode margins if production costs rise unexpectedly.

2. AI Pilots: Shield AI

Shield AI aims to build the "world’s best AI pilot" to operate in GPS-denied environments where human pilots cannot fly.

• EquityZen Popularity Score: 86
• Funding: The company closed a $240 million Series F in March 2025, securing a $5.3 billion valuation.
• Key Products: Their V-BAT drone has become a workhorse for the U.S. Navy, powered by the Hivemind autonomy stack which enables intelligent teaming without remote operators.
• Potential Risks: The AI automation market for aviation is becoming increasingly crowded. Shield AI will need to continue to out-innovate competitors to maintain market share.

3. Rebuilding the Base: Hadrian 

The bottleneck for defense isn't just design; it's manufacturing. Hadrian is building highly automated "factories-as-a-service" that claim to produce aerospace components faster than legacy machine shops.

• EquityZen Popularity Score: 64
• Breaking News: Just last week, Hadrian raised expanded capital at a $1.6 billion valuation led by T. Rowe Price.
• Mission: By automating the machining supply chain, Hadrian aims to cut lead times for critical space and defense parts by 50%, addressing one of the most critical vulnerabilities in the U.S. industrial base.
• Potential Risks: Hadrian’s business model is capital intensive, requiring large upfront investment to build factories before revenue scales. This model may require ongoing capital investment to fuel growth.

4. The European Powerhouse: Helsing

While American firms often grab the headlines, Germany's Helsing has rapidly emerged as Europe's defining defense AI company, proving that the continent is ready to fund its own technological sovereignty.

• EquityZen Popularity Score: 64
• Funding + Scale: Helsing secured a €600 million (~$690M) Series D in July 2025, led by Spotify founder Daniel Ek’s Prima Materia. This round valued the company at €12 billion (~$14B), making it one of Europe's most valuable AI startups.
• Mission: Unlike hardware-first companies, Helsing focuses on AI software that upgrades existing platforms, like the Eurofighter Typhoon, with cognitive electronic warfare capabilities, serving as the "cortex" of modern defense systems.
• Potential Risks: As a software-first overlay for legacy hardware, Helsing's growth is tied to the slow, bureaucratic procurement cycles of European governments and the technical challenges of integrating with aging platforms like the Eurofighter. Slowdowns in integration may impact their ability to scale.

5. The Shield: Epirus

As drone swarms become a defining feature of modern conflict, the ability to counter them without running out of ammunition is critical. Epirus aims to solve this with high-power microwave (HPM) technology.

• EquityZen Popularity Score: 63
• Growth: In 2025, Epirus closed a $250 million Series D specifically to hyperscale production of its directed energy systems.
• Impact: Their flagship system, Leonidas, creates a force field of microwave energy that can disable swarm electronics instantly. The company is now deploying these systems to protect U.S. assets abroad, validating the shift toward directed energy weapons.
• Potential Risks: Directed energy weapons face physical limitations regarding range and power consumption compared to kinetic interceptors. Widespread adoption depends on overcoming these limitations and winning support from government contracts.

6. Maritime Autonomy: Saronic Technologies

Naval warfare is undergoing a revolution, with low-cost autonomous vessels replacing expensive manned ships for dangerous missions. Saronic is leading this charge by building boats that can be "attritable", effective enough to win, but cheap enough to lose.

• EquityZen Popularity Score: 61
• Funding + Scale: Saronic raised a $600 million Series C in February 2025, reaching a $4 billion valuation.
• Expansion: The funding is being used to build Port Alpha, a state-of-the-art shipyard dedicated to mass-producing its Corsair and Cutlass Autonomous Surface Vessels (ASVs). These swarm-capable boats are designed to project power in contested waters without risking sailors' lives.
• Potential Risks: The company faces stiff competition from China's massive shipbuilding capacity, which currently outpaces the U.S. by a significant margin.

7. The Sensor Network: Chaos Industries

Chaos has rapidly grown in the defense tech market by addressing a critical modern vulnerability: the ability to detect stealthy drone and missile threats that legacy radars may miss.

• EquityZen Popularity Score: 60 
• Funding + Scale: In November 2025, Chaos raised a massive $510 million Series D led by Valor Equity Partners and 8VC. The round valued the company at $4.5 billion, reflecting the market's premium on "domain dominance" capabilities.
• Key Products: Chaos builds Coherent Distributed Networks (CDN), a technology that links multiple sensors together to create an inescapable detection web. Their flagship hardware, the Vanquish radar, is an expeditionary system designed to detect and track unmanned aerial systems (UAS) and cruise missiles.
• News: The company recently secured a spot on the U.S. Army's G-TEAD marketplace, allowing NATO forces to rapidly acquire their systems for the Eastern Flank.
• Potential Risks: The sensor market is crowded with both legacy primes and new entrants. Chaos Industries will need to continually outperform to solidify their place in the market.

8. Hydrogen Hardtech: Mach Industries

Mach Industries is attempting to commercialize hydrogen generation for defense applications. Their goal is to produce hardware that offers a distinct range and payload advantages over battery-electric systems. 

• EquityZen Popularity Score: 58
• Momentum: Backed by heavyweights like Sequoia and Bedrock, Mach Industries has rapidly scaled its hydrogen-first platform following a $100 million Series B in June 2025.
• Differentiation: Their technology uses hydrogen for everything from UAV propulsion to munitions, offering a unique supply chain advantage by allowing forces to generate fuel in the field rather than transporting it across dangerous logistics lines.
• Potential Risks: Field-deployable hydrogen generation presents significant safety and logistical challenges that have not yet been proven at scale in active combat zones. Roadblocks in adoption may impact Mach’s ability to scale.

The Investor Opportunity 

The surge in defense tech isn't just a reaction to current events; it's a structural realignment of the market. New private market leaders are proving they can out-innovate and out-manufacture legacy giants, bringing defense tech to the main stage.

For private market investors, this sector offers a rare convergence of patriotic imperative and financial opportunity. As these companies mature from venture-backed startups into critical infrastructure providers, they are reshaping the defense industry from the ground up.

To explore current opportunities in Defense Tech, visit the EquityZen Marketplace.