Ukraine’s defence-tech industry draws growing international investment

Foreign investment in Ukraine’s defence-tech industry is accelerating as investors seek exposure to some of the world’s most rapidly evolving military technologies.

From drone manufacturers to AI-enabled software developers, Ukrainian firms are attracting growing levels of international capital, with Buntar Aerospace’s latest $16 million fundraising round highlighting the trend.

Buntar Aerospace’s successful fundraising

Buntar Aerospace said it has raised $16 million in a new financing round, bringing its total capital raised to $30 million. Buntar is a Kyiv-based Ukrainian defence-tech company developing unmanned ISR systems and defence autonomy technologies.

This round was led by Freedom Fund and an international private equity fund. Gardar, Iron Wolf, and Autonomy Capital also participated.

The company said, “This is Buntar’s second major financing round this year. In March, the company raised $10.4m from US-based Axon Enterprise and Norway’s Munkene AS.” Details of the plans for the capital have not been disclosed.

The new funding is earmarked for scaling manufacturing, accelerating product development, and expanding into international markets. This includes new defence and dual-use product lines that will go beyond its core ISR business.

Buntar develops reconnaissance drones and software designed to operate in demanding environments, including under heavy electronic warfare conditions.

Axon is known for its law-enforcement tech, and its investment may hint that it sees potential for the technology in public safety.

Ukraine is a valuable developmental and proving ground

Buntar’s latest funding round reflects a broader increase in international investment across Ukraine’s defence-tech sector.

The announcement comes as European defence-tech investment reaches record levels. Startups in the sector have raised $7.4 billion in venture capital this year. US investors now account for 47% of European defence-tech funding.

According to a report by Dealroom & Resilience Media, drone startups alone have raised $4.7 billion across 40 rounds.

In 2025, AGN reported that Google’s co-founder Eric Schmidt was investing in developing interceptor drones for Ukraine. Details remain opaque.

Ukraine’s interceptor-drone programmes have gained growing attention as both sides continue adapting their drone capabilities. Russia has increasingly fielded higher-performance Shahed-derived systems, including some reported jet-powered variants.

Some countries, like the United Kingdom, have been able to develop a defence drone industry (e.g., Tekever, Windracers, Malloy Aeronautics) by supplying various types of drones to Ukraine.

This has given British manufacturers an unusual opportunity to develop and refine systems through operational experience in Ukraine, while giving the British Armed Forces access to increasingly battle-proven designs and a base able to deliver them at scale.

More recently, the UK has announced it will be cooperating with AI with Ukraine, allowing Ukraine to benefit from the “third-largest AI ecosystem in the world.” In return, the UK will be gaining access to Ukraine’s Avengers AI Labs database.

But while there are plenty of headlines highlighting countries in Europe, the Gulf, and the US purchasing Ukrainian drone technology, what is less reported is the number of Western tech firms investing in Ukrainian defence-tech companies.

Examples of investments into Ukraine’s defence-tech companies

Ukrainian defence-tech companies attracted at least $129 million in disclosed investment and grant funding in 2025 alone, according to AVentures Capital, with external investors accounting for 49% and a further 25% coming from joint foreign-Ukrainian investment.

According to Defender, Ukraine’s defence startups raised $6.7 million in 2023, $59 million in 2024, and $129 million in 2025.

The Ukrainian company Swarmer has received investment from US-based Broadband Capital Investments, R-G.AI, Green Flag Ventures, Radius Capital, and Nework VC.

Ukraine’s Frontline sold a 10% stake to Germany’s Quantum Systems in addition to funding from Freedom Fund. Amazing Drones has investment from Japan’s Terra Drone.

It’s impossible to list all the international companies investing in Ukraine, but some others include the Netherlands’ NUNC Capital, Estonia’s Darkstar, and Norway’s Gardar.

Perhaps one of the most high-profile near-examples is when the UAE’s EDGE Group sought to purchase a 30% stake in Ukraine’s leading Fire Point for $760 million, although Ukrainian authorities did not permit the sale.

Fire Point now produces many of Ukraine’s most effective long-range strike drones as well as cruise missiles and ballistic missiles.

Fire Point was initially established with around $1.5 to $2 million of its founder’s own money, and it is now reported to be worth as much as $5.8 billion.