For defense tech startups, red tape is a burden—and also a moat

For defense tech startups, red tape is a burden—and also a moat

Andrew Woodman, PitchBook, August 11, 2025

New global conflicts fuel VC investment into defense and dual-use technologies, which have both civilian and military applications. PitchBook data shows that the total value of VC investment in defense tech this year has already reached a new peak, with just over $7 billion invested across 112 rounds globally. This is just over four times the level of investment seen in 2022.The private sector is now the primary driver for rapid defense innovation, with startups iterating and deploying new technologies within a shorter timeframe than traditional government R&D. A common complaint is that government procurement cycles are too slow. Governments are making efforts to slash red tape to help speed up adoption. In June, the US government introduced the Speed Act, a bipartisan initiative to cut bureaucracy in defense procurement.  Despite logistical challenges and long procurement cycles, the defense sector remains attractive for investors. Companies that establish themselves and perform well in the ecosystem have the potential to offer long-term, predictable revenue and strong customer loyalty—qualities that are often absent in fast-moving commercial markets. And once you get into this ecosystem for defense-first companies,  it’s really hard to dislodge incumbents, especially if you’re performing well. Read full article on PitchBook.com