The defense tech sector has seen unprecedented growth in 2026, with over $14.6 billion in venture capital investments, surpassing the previous record of $9.6 billion set in 2025. This surge is largely attributed to major players like Anduril Industries, which secured a $5 billion Series H funding round, enhancing its valuation to $30.5 billion. The sector's funding trajectory has been steadily rising since 2020, with significant increases in investment amounts and deal flow. This year alone, 107 venture rounds have been announced, indicating a robust interest in defense technologies, particularly in AI, autonomous systems, and space applications. Noteworthy funding also went to startups such as Mach Industries and Shield AI, highlighting the diverse innovations within the sector. As funding increases, attention is shifting towards potential exits, with Swarmer's recent IPO success paving the way for other companies, including Anduril, to consider public offerings, which could reshape the landscape of defense contracting.