Private equity investment in defense technology reaches $4 billion — CNBC
Private equity funds’ investments in the growth of defense technology companies reached $4 billion in the first nine months of 2026, compared with $500 million in 2024. This was reported by CNBC, citing PitchBook data. Traditional investors that had previously focused on buying mature businesses are increasingly financing younger companies with high growth rates.
Funds shift to growth investments
According to PitchBook, the number of private equity deals to finance the growth of defense companies increased from 15 in 2024 to 31 in 2025 and to 48 in the first nine months of 2026. Such investments accounted for 41% of the total value of private equity deals in the defense sector in 2026, compared with 3% in 2024.
Startups in NATO countries and allied states raised $27.1 billion in venture funding through September 2026, nearly twice as much as in all of 2025, according to a report by Dealroom and Resilience Media. Analysts expect private equity, debt financing and other sources of capital to play an increasingly important role in technology companies’ transition to industrial production.
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Law firm White & Case surveyed 250 senior executives at defense companies in the United Kingdom. Ninety-seven percent of respondents expect their businesses to seek significant external financing over the next 12 months. Investment company Advent International announced in March a commitment to invest up to $1 billion in next-generation defense technology, including developers of autonomous systems Shield AI and Saronic.
Investors warn of the risk of inflated valuations
Advent Managing Partner Shonnel Malani told CNBC that valuations of defense technology companies are increasingly based on the promise of their technologies rather than revenue, profit or order books. In his view, some companies may fail to turn technological developments into commercial success, creating a risk of valuation corrections.
At the same time, PitchBook analyst Jim Corridor believes investor interest will persist because of growing defense budgets, the need to replenish ammunition stockpiles, and the development of drone technologies and counter-drone capabilities. According to PitchBook, 504 private equity deals in the defense sector have been concluded since 2021, but only 101 investment exits have been recorded. Initial public offerings accounted for 70% of the value of such exits through September 2026.
