A Sector Breaking Its Own Record Mid-Year

Investors committed more than $14.6 billion to companies in the military, national security, and law enforcement categories in just the first five months of 2026 — already surpassing the sector’s previous full-year funding record of $9.6 billion, set in all of 2025, according to reporting from Technical.ly. Zoomed out, national security-focused firms across cyber, defense, aerospace, and autonomous systems raised $46.3 billion across nearly 1,900 deals last year alone — an almost 900% increase in under a decade.

The capital is concentrating in large, late-stage rounds rather than spreading across early deal volume, mirroring the pattern seen in AI and HealthTech. This year’s largest rounds include Anduril’s $5 billion Series H at a $30.5 billion valuation, Shield AI’s $2 billion Series G, and Saronic’s $1.75 billion Series D, per Value Add VC’s 2026 defense tech funding tracker.

What's Driving It

Two forces are converging. Conflicts in Ukraine and the Middle East have exposed urgent demand for weapons systems and surveillance technology that are cheaper and faster to field than legacy defense procurement can deliver, and the Pentagon has been actively encouraging venture capital participation in that pipeline rather than treating it as a threat to traditional primes. The result is a startup category that increasingly looks and raises like enterprise software — fast rounds, high valuations — while still needing to clear the security clearance, export control, and government contracting requirements that make it structurally different.

Where National Labs Fit In

Inside that surge, national laboratories have become active participants rather than passive customers. Sandia National Laboratories, Los Alamos National Laboratory, and a growing list of federal research institutions are showing up as technical partners and, in some structures, co-investors — a faster way for labs to move dual-use technology out of internal programs and into fielded capability than traditional procurement allows.

CIVC's Approach to Cyber & National Security Investing

As a cyber and national security venture capital firm, CIVC underwrites founders who can operate credibly in both commercial and government channels simultaneously, because the record funding environment has not made the underlying sales complexity — clearances, export controls, dual-use compliance — any simpler. Through Corporate Intelligence™, CIVC connects portfolio companies to both enterprise and government-adjacent buyers, rather than treating the two as sequential markets to conquer one at a time.