Venture capital firms are showing greater interest in defense technology, a field that once seemed too controversial or unsuitable for startup funding. Large fundraising rounds and high-profile companies suggest that national security work is increasingly part of the technology investment conversation.
From taboo to fundable
Anduril illustrates how far investor attitudes have moved. The defense company was once described as “tech’s most controversial startup,” yet it raised a $1.48 billion Series E round last December. Its recent acquisition of Blue Force Technologies, the firm behind the “Fury” unmanned fighter jet, adds to the attention around its expansion.
The change reaches beyond one company. A view that defense technology cannot fit the venture capital model has weakened, as startups pursue work at the intersection of national security and commercial technology and more investors consider backing them. The source points to rising geopolitical tensions and a shift inside the Pentagon as part of this broader change.
There is also demand for governments to outsource research and development to venture-backed companies. That creates an opening for startups whose products may serve both commercial and security needs, and for investors willing to support a sector that previously attracted fewer of them.
Helsing draws mainstream attention
European defense technology company Helsing offers another sign of the trend. Its recent €209 million Series B round ($223 million) was reportedly raised at a €1.5 billion pre-money valuation, or $1.6 billion. The company is focused on software and artificial intelligence, an approach that may not require the same level of funding as a company building physical defense systems.
Helsing had already raised €100 million in November 2021 from Prima Materia, the investment vehicle of Spotify co-founder Daniel Ek, who joined the company’s board. Its Series B was led by General Catalyst, a mainstream venture capital firm. That participation suggests investors outside a narrow group of defense-focused backers are now willing to examine the market.
Funding is only one measure of acceptance. Helsing’s VP of AI, Antoine Bordes, said that peers responding to his new role tended to react either with polite distance or with interest in job opportunities. That range hints at a field where some people remain hesitant but others see meaningful work and career possibilities.
Geopolitics and the talent question
Helsing says it has been active in Ukraine since 2022, providing capabilities and technology for frontline operations, with personnel deployed on an ongoing basis. The war in Ukraine, alongside U.S. fears about China, may have made defense technology less taboo in Europe. The source also notes that NATO members and major industry players have become more willing to use innovative technology for defense.
Artificial intelligence is central to the debate. Helsing co-founder Gundbert Scherf believes AI will be essential for democracies to defend their values. Co-founder Torsten Reil has also argued that China’s large pool of machine learning engineers does not automatically translate into a decisive advantage: he said that a much smaller group of people could make the difference if they are brought together to build significant capabilities.
That argument places particular weight on attracting and organizing skilled people. The growth of talent working on defense problems in democratic societies could help address structural advantages elsewhere, according to Reil. The investment story, then, is connected not only to capital and products but also to whether companies can bring expertise together around difficult national security challenges.
AI’s promise comes with unresolved questions
More venture interest does not settle the hardest questions. The source raises whether AI can be applied effectively and ethically in defense, including the broader concern of whether an AI system should ever be allowed to pull the trigger. Those questions matter as startups develop tools for military use and seek support from investors.
The case for investment rests partly on the belief that these issues are more likely to be examined and answered in democracies. That is an argument for engagement, not proof that the technology is safe or that every application is justified. As defense startups attract mainstream capital and talent, investors will have to weigh the potential security benefits against the consequences of deploying AI in this setting.
For now, companies such as Anduril and Helsing show that venture capital’s relationship with defense technology is changing. More funding and greater willingness to join the sector have opened doors that once seemed closed. Whether that momentum leads to responsible and effective tools will depend on how the industry confronts the questions that remain.