Ernestine Siu
A wave of defense tech startups in Silicon Valley is drawing billions in funding and reshaping America’s national security.
Anduril Industries, recently valued at $30.5 billion following its latest funding round, is among the so-called “neoprimes” — companies challenging the dominance of legacy contractors, dubbed “primes,” such as Lockheed Martin, Northrop Grumman, Boeing, General Dynamics, and RTX (formerly Raytheon).
“There’s more money than ever going to what we call the ‘neoprimes’” Jameson Darby, co-founder and director of autonomy at investment syndicate MilVet Angels, or MVA, told CNBC. “It’s still a fraction of the overall budget, but the trend is all positive.”
Other examples of defense tech startups challenging the incumbents include SpaceX and Palantir Technologies, said Darby, who is also a founding member of the U.S. Department of Defense’s Defense Innovation Unit.
Unlike the primes, these startups are faster, leaner and software-first — with many of them building things that can help close “critical technology gaps that are really important to national security,” said Ernestine Fu Mak, co-founder of MVA and founder of Brave Capital, a venture capital firm.
Venture funding for U.S.-based defense tech startups totaled about $38 billion through the first half of 2025, and could exceed its 2021 peak if the pace remains constant for the rest of the year, according to JPMorgan.
‘The battlefield is changing’
As the global war landscape changed over the past decades, the U.S. Department of Defense has identified several technologies that are critical to national security, including hypersonics, energy resilience, space technology, integrated sensing and cyber.
“In a post-9/11 world, the entire Department of Defense effectively focused on ... the global war on terrorism. It was our military versus insurgents, guerrillas, asymmetric warfare, relatively low-tech fighters in most cases,” said Darby.
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