Private investment in Ukrainian defense technologies soared by 900% in one year but there is still not enough capital.

According to the Ukrainian Council of Gunsmiths, this sector experienced remarkable growth in 2024, surging by 900% compared to 2023, with estimates ranging from $35M to $50M. This demonstrates that Ukrainian manufacturers are developing effective defense solutions.

Over ten venture funds are actively investing in defense tech in Ukraine. Notable funding successes include $3M from German fund 42SAP for the Osavul platform, which focuses on AI-driven media analytics; $2.7M from the American fund Radius Ventures for drone software company Swarmer; and $1.3M from various investors for M-FLY, which is working on a laser guidance system for drones.

Most funding is directed toward early-stage companies, while scaling investments are nearly non-existent. The average amount for an early-stage investment round is between €125,000 and €500,000. Startups offering dual-purpose products or cutting-edge solutions are attracting particular interest from investors.

According to Green Flag Ventures, which invests in Defense Tech startups, “We have a pipeline larger than we can manage. There isn’t enough capital in the ecosystem for all the promising pre-seed and seed-stage companies, many of which already have LOIs or purchase orders.”