President Trump Makes Announcement With Defense Secretary Hegseth In The Oval Office
Defense Secretary Pete Hegseth, right, talks about the “Golden Dome” missile defense system with President Donald Trump in the White House on May 20, 2025 in Washington, DC.
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A small group of venture capital firms is driving a record flood of capital into defense tech as investors seize geopolitical tailwinds, including the US war with Iran and continued tensions with China.
VCs invested a record $19.8 billion into the sector in Q1—the most ever in a single quarter, and more than a third of 2025’s full-year total, according to PitchBook’s Q1 2026 Defense Tech VC Trends report. The most active check writers ranged from Andreessen Horowitz to a $50 million shop focused on deep tech, underscoring the widespread interest among VCs.
Late-stage and venture growth rounds captured 88% of that $19.8 billion. Median venture growth pre-money valuations reached $1.4 billion, nearly triple the 2025 median of $500 million. The maturing cohort of unicorns now showing real contract traction and manufacturing capacity is what’s drawing the largest checks, said Ali Javaheri, a PitchBook senior emerging technology analyst and the report’s lead author.
The Iran war has been a significant factor in investment growth, but not the only one, according to Ryan Micheletti, co-founder and GP of The Veteran Fund.
“The macro factors are extremely important to this,” Micheletti said. “You’re seeing more capital allocators fund the critical technologies that matter, that ensure [the US] remains the dominant global superpower.”
The explosion in investments comes amid the Trump administration’s $839 billion FY 2026 defense budget and the Pentagon’s $151 billion “Golden Dome” missile-defense program. Wall Street has followed: JPMorganChase launched a $1.5 trillion, 10-year initiative last October to “facilitate, finance and invest” in national security imperatives.
Exit activity also jumped. Celestial AI, a photonic interconnect startup developing chip technology for AI data centers, was acquired by Marvell Technology in December in a stock and cash deal valued at $3.25 billion. Quantum computing firms Xanadu and Infleqtion both went public via SPACs in Q1, at valuations of $3.6 billion and $2.2 billion, respectively.
Here are the top 10 most-active VCs in defense tech in Q1 2026, ranked by deal count globally, according to PitchBook data.
This article originally appeared on PitchBook News