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Defense tech exits: Cycles, clusters, and premium outcomes
Defense tech exit activity peaked at 74 in 2021 and rebounded to 71 in 2024 as geopolitical shocks and rising defense budgets reignited strategic demand. M&A accounts for roughly 72% of exits, while IPOs and SPACs remain rare, reserved for scaled dual-use firms like Palantir, Rocket Lab, and Voyager. Valuations have swung from $534 million in 2022 to just $62 million in 2023, before surging to about $1.8 billion in 2025. Liquidity clusters around software, sensing, and biotech, where commercialization cycles are shorter, while hardware-heavy plays like space and advanced manufacturing remain long-horizon bets. For investors, the signal is clear: Defense tech exits are cyclical, but dual-use leaders in software, sensing, autonomy, and space are best positioned to capture premium outcomes.
Table of contents
| Key takeaways | 1 |
| Exit volumes over time | 3 |
| Exit routes | 4 |
| Valuation benchmarks | 5 |
| Exits by segment | 6 |
| Time to exit by segment | 7 |
| Top sellers and acquirer landscape | 8 |
| Case studies | 9 |
| Macro drivers and risks | 10 |
| Outlook through 2030 | 11 |
