Leading defense tech companies like SpaceX, Palantir, Anduril, Saronic and the top SVDG-ranked entities may earn defense contracts commensurate with the capital they've raised and invested. Most of the rest of the venture-backed defense players are running up an investment tab the Pentagon seems unlikely to pay down in the near-term, and the last month of contract awards is a troubling signal.
Every fall, Lucy holds the football. Every fall, Charlie Brown convinces himself this time is different. She’s smiling, the White House loves defense tech now, the NDAA has multiple reforms in it, everybody’s talking about commercial-first acquisition. So, he takes a running start. She pulls it away. He lands on his back and stares at the sky in deep surprise. He naively thought the Pentagon was different this time around.
The Kickers
SpaceX is on a good track. It received over $8B in new awards for space launch, AMTI and data network capabilities in recent months and continues to benefit from strong NASA and commercial business. Palantir has a robust commercial line plus a government-wide business. In defense, they have large enterprise contracts with the Army, CDAO, and SOCOM along with large efforts with the Navy and Space Force. Their rising stock price reflects strong financial performance.
Anduril remains short of awards at that scale but has won significant contracts for missile defense, low-cost cruise missiles, and Lattice. It also has a promising pipeline for Navy UUVs, Air Force CCAs, Army SBMC, various Space Force efforts, and ongoing c-UAS work. Saronic appears solidly positioned with a large USV production contract and a strong lead for follow-on MUSV marketplace awards.
The Defense Tech Kicking Percentage
0.84%
Despite the awards and promise, the Reagan Institute’s 2026 NSIB Report Card shows the top 15 defense tech disruptors received just 0.84% of total Pentagon obligated dollars in FY25, up from 0.7% in FY24 and 0.4% in FY23. The top five legacy primes still pull in obligation dollars at roughly 42 times the rate of those defense tech disruptors combined.
Silicon Valley Defense Group’s NatSec100 data shows that over the lifetime of the current crop of venture-backed national security startups, private investors have put in roughly $118B and gotten back only about $16B in federal contracts. That’s a 13.5% recovery rate on capital already deployed. The trend is not improving. In 2025 alone, nearly $40B was invested against $4.3B in contracts to the top 15, a measly 10% recovery rate for the year. 2026 is not shaping up to be much better with the DoW apparently doubling down on legacy system modernization.
Bain’s market-sizing work put the 2025 aggregate valuation of VC-backed defense tech firms (excluding SpaceX) at roughly $86 billion. At a 5 times revenue multiple consistent with mature defense tech comps, that valuation implies these companies need to generate approximately $17B in annual revenue. Even under more optimistic assumptions that push required revenue toward $25–30B by 2030, the sector would need to capture roughly 2–6% of U.S. defense investment accounts. That remains achievable, but only if 2026 and 2027 trend toward the goal rather than away from it.
Backyard Football vs the NFL
If you want to see where the actual money goes when Congress and the Pentagon get serious about buying something at scale, look at the last month. The Navy awarded General Dynamics Electric Boat and HII a combined $76.6B for five Columbia-class and nine Block VI Virginia-class submarines. Days later, the Army handed Lockheed Martin a $53.86B mod to its PAC-3 MSE contract and a $35.3B increase for THAAD. This week the Navy awarded RTX a $23B contract to accelerate Tomahawk missile production.
The framework agreements awarded under the Low-Cost Containerized Missiles (LCCM) program to 3 new entrants (Anduril, CoAspire, and Zone 5 Technologies) promises to order and deliver 10,000 missiles between 2027 and 2029 is a promising step forward. The promise to award Castelion a production contract for 500-12,000 lower cost hypersonic missiles is also promising. However, in context the LCCM order is only a max of ~$3B potentially spread across four companies (Leidos is also in the mix) across three years. The max Castelion buy (~$5B) would be significant, but DoW seems to only be committing to a 500 unit buy currently.
In context, these low-cost munition frameworks pale in comparison as the RTX award which exceeds the lifetime federal obligations of the entire NatSec100 cohort. The PAC-3 award is 3.4 times. The submarine award is nearly five times.
Combined, these contracts exceed by a wide margin both the lifetime obligations and the total private capital ever raised by the current generation of venture-backed defense tech companies.
Programs like the Navy’s MUSV Marketplace and Air Force’s CCA are also promising but the MUSV only has $4.4B across the FYDP spread over some undetermined number of companies. CCAs are much better positioned to generate value for defense tech with $9.5B projected over the FYDP with RDT&E to also support the next increment. So, whether that is allocated across one or two vendors, that will be an example of a program going in the right direction.
The Football is Still Held by Lucy
Overall, this isn’t a criticism of procuring advanced systems like submarines or advanced munitions. Nuclear deterrence and layered air defense are critical capabilities, and these programs were overdue for serious investment, but it is a serious data point for investors. When the Pentagon decides to write a real check, it still reaches for a legacy prime building an exquisite platform. Autonomy, attritable systems, and software-defined capability are not competing for the same dollars at the moment, and it might be a decade or more before the Pentagon buys systems at scale that the defense tech community is offering today. Pretending otherwise sets founders and investors up for a fall.
Some may feel that the tide is turning with clear public direction from the White House, the Pentagon leadership, and Congress for commercial-first acquisition. However, most officials in key roles seem to still be executing with the same tactics they always have with a greater focus on compliance than speed or adaptability.
While the executives are setting a clear direction, two and three layers down the resistance continues. Until those Lucys are removed or directly ordered to change, commercial-first remains a desired strategy, not an execution behavior.
Where Do We Go From Here?
If you’re building or investing in defense tech, the honest read is this: assume you are not Anduril, Palantir, or SpaceX, because statistically you almost certainly aren’t. Price your business on the obligation data that actually exists, not on the multiple your last round justified. Watch what the Pentagon does with real dollars, not what it says in a strategy document. Recognize that submarine and interceptor money is not coming out of the same pool your autonomy or sensing company is chasing.
Many startups will fail. Some will be acquired by larger traditional or non-traditional defense companies at more realistic multiples. A smaller number will grow into new primes and critical suppliers that fuel competition, close gaps in the supply chain, deliver novel technology solutions, and keep continuous pressure on the established primes to perform and control costs. That is a healthy industry outcome.
If the Pentagon is truly serious about rebuilding the Arsenal of Democracy, delivering warfighting capabilities at speed and scale, and placing industry on a wartime footing, it must act differently. It must invest in a broader range of capabilities from a broader mix of companies. It must demonstrate a commercial first commitment rather than imposing a costly, heavily regulated environment that only legacy companies can navigate. It must rethink contracting norms if it expects innovative entrepreneurs to invest private capital to rapidly develop novel warfighting solutions.
At the very least, we should be getting close to that $25–30B number by 2030 to build the hedge force, improve distribution of capabilities, enable operations from smaller locations and enable enemy surprise with asymmetric capabilities.
Lucy isn’t going to stop holding the football. The only real fix is Charlie Brown deciding if it is worth trying to kick it or give up and see what Snoopy is up to.
For those founders who decide the kick is still worth attempting:
Start with Portfolio Acquisition Executives (PAEs) who are genuinely empowered with budget flexibility, authorities that span R&D through sustainment, and a mandate to deliver at speed and scale while regenerating the industrial base.
Rapid prototyping that pivots cleanly into production will earn the greater funding allocations. The test is simple: Can you put meaningful warfighting capability in the hands of the Combatant Commanders that improves decision speed and delivers lethality?
Work directly with those PAEs and their program offices. Leverage CSOs, OTAs, and the Middle Tier of Acquisition to run rapid, iterative prototypes, field a viable v1, then keep iterating on real warfighter feedback and advancing technology.
Bring the low-cost, high-volume scale that complements the few exquisite, high-cost systems rather than pretending to replace them.
Remind every stakeholder of statute and regulation: commercial-first is required, and contracting officers already have the authority to treat non-traditional defense companies as commercial. They have the tools and authorities but often lack the will to use them.
While Charlie Brown never was able to pull off the kick with Lucy, we can build and sustain a new generation of kickers to augment the behemoth primes, build more resiliency into the industrial base and make America more secure.