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2023
Vertical Snapshot: Defense Tech
May 22, 2023
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Table of contents
Uncle Sam’s defense tech checkbook
With rising geopolitical tensions and government acquisition reforms, investment in defense tech is on track to surge to nearly $185 billion by 2027. Our 2023 Vertical Snapshot: Defense Tech report dives into the industry drivers and the startups poised for liftoff.
Key takeaways include:
- Renewable energy and biotech ranked as the top defense tech segments by deal flow in 2022.
- 71% of exit activity in the space since 2016 has involved strategic acquisitions.
- Despite a projected CAGR of nearly 16%, there are challenges: the "valley of death" funding gap, government bureaucracy, and specialized talent shortages.
Table of contents
| Executive summary | 3 |
| Introduction | 4 |
| Defense innovation ecosystem | 5 |
| DoD innovation organizations | 5 |
| A variety of funding options | 8 |
| The Office of Strategic Capital | 10 |
| Challenges | 10 |
| Go-to-market strategies for startups | 11 |
| Defense tech timeline | 12 |
| Industry drivers | 17 |
| Outlook | 19 |
| Defense tech taxonomy | 20 |
| Defense tech market map | 26 |
| Market size | 28 |
| VC activity | 29 |
| Key players | 34 |
| Key deals and contracts | 43 |
| Recommended reads | 45 |