Investments in defense sector startups are accelerating worldwide, with startups holding new technologies such as drones and artificial intelligence (AI) changing the landscape of security, the Nihon Keizai Shimbun (Nikkei) reported on the 5th.

According to market research firm PitchBook, venture capital (VC) investment in defense sector startups in the first half of this year (January–June) reached 40.8 billion dollars (approximately 54.9 trillion KRW), a 56% increase compared to the same period last year.

This is the highest half-year figure in the past 10 years, and investments are projected to hit an all-time high on an annual basis this year as well.

The most notable company is America's Anduril Industries, which announced in May that it raised approximately 780 billion yen (about 6.6 trillion KRW) in a single funding round.

Andreessen Horowitz, a major U.S. VC, is focusing on security investments—such as recruiting high-ranking retired U.S. military generals as special advisors—and has also invested in Anduril.

Nikkei pointed out that behind this increase in investment in defense startups are the war in Ukraine that began in 2022, U.S.-China conflicts, and military clashes between the U.S. and Iran.

Among these, software developed by U.S.-based Palantir featuring AI-integrated data analytics was utilized in U.S. military strikes against Iran.

In the war in Ukraine, new technologies are being actively applied, with drones demonstrating a prominent presence.

While the traditional defense sector has been led by major corporations like America's Lockheed Martin or Japan's Mitsubishi Heavy Industries, these large companies often face limitations such as taking a long time to develop new technologies.

However, building security systems capable of responding to modern warfare has become an urgent task for various nations, leading them to pour efforts into fostering startups capable of rapid development.

In Japan, funds are also flocking to defense sector startups.

Sakana AI, an AI development company, raised approximately 31 billion yen (about 264.4 billion KRW) in funding from domestic Japanese investors in the first half of this year, and in July, it signed a proof-of-concept contract with Japan's Ministry of Defense to utilize AI for intelligence analysis.

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