Military Tech Takes Off: USD192M Raised in 2025 YTD Investor participation has broadened significantly, with around 110 venture capital firms backing the sector
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India's military tech startups are gearing up, with funding growing 61-fold over the past decade. According to Tracxn's India Military Tech Report 2025, annual funding has surged from just USD 3.1 million in 2016 to USD 192.4 million in 2025 so far, making this year the most funded year on record. The growth has been led by landmark rounds such as Raphe mPhibr's USD 100 million Series B.
A decade of growth
Cumulatively, the sector has raised USD 611 million across 211 equity funding rounds. The number of deals has steadily increased, from three in 2016 to a peak of 36 in 2023, with 20 rounds already recorded this year. India's military tech ecosystem now consists of more than 150 active startups, with Bengaluru (37), Delhi NCR (36), and Hyderabad (21) emerging as major hubs.
Funding trends show a strong bias toward early-stage companies. Eight of the 10 largest all-time deals have been struck at early stages. Newspace Research and Technologies raised USD 33 million in Series B, while Sagar Defence Engineering secured USD 25.4 million in Series A. Later-stage deals have been more limited, including Big Bang Boom Solutions' USD 29.9 million Series C and Tonbo Imaging's USD 20.4 million Series D.
Neha Singh, Co-founder of Tracxn, noted that India's military tech sector is "entering a defining phase, shaped by innovation, policy support, and growing investor participation." She added that technologies such as drones, AI, robotics, and cybersecurity are "moving from experimental to mission-critical, with dual-use applications strengthening both defence and civilian domains."
The government's push is also playing a significant role in this trajectory. Initiatives such as Atmanirbhar Bharat, iDEX, and the Defence Industrial Corridors are enabling innovation and widening investor confidence. Delhi NCR has led the funding landscape in 2025, securing USD 194.6 million, followed by Bengaluru at USD 166.1 million.
The sector is also showing signs of maturity through public listings and consolidation. Four defence technology firms have gone public: Zen Technologies (2015), Astra Microwave Products (2004), DroneAcharya (2022), and ideaForge (2023). On the acquisitions front, notable deals include Reliance Industries' acquisition of Asteria Aerospace in 2019 and Adani Defence Systems' acquisition of Alpha Design Technologies in 2018.
Expanding investor base
Investor participation has broadened significantly, with around 110 venture capital firms backing the sector. IDBI Capital Markets & Securities, Hda Tech Growth, and Venture Catalysts rank among the most active. In 2025, several global investors made first-time bets on India's defence tech, including General Catalyst (Raphe mPhibr), Dexter Ventures, AC Ventures (Armory), and Navam Capital (Vayudh).
Industry observers suggest that this growing pool of both domestic and global investors reflects the sector's transition into the mainstream. "The entry of new global funds into India's defence ecosystem signals that the world is watching India's ability to innovate in next-generation technologies," said a senior defence analyst familiar with the sector.
