The Next Big Boom: Investing in Defense-Tech StartupsMatthew Milner 
The Paris Air Show is the world's largest and oldest trade show for aerospace. This year's show featured more than 2,400 exhibitors from nearly 50 countries. But this year's event featured a surprising new star: drones. 
While airlines inked new deals for commercial jets (boring), the real excitement was happening in the defense sector. Simply put, a record number of drones were on display — proof that unmanned and autonomous aircraft are going mainstream. These small, often AI-powered aircraft are reshaping modern warfare. And for investors like us, they're providing an exciting new sector to invest in… Drones and Modern Warfare: A New WingmanDrones have already become indispensable tools in conflicts like the Russia—Ukraine war, where they've been used for surveillance, targeting, and direct attacks. Both Russia and Ukraine are now producing millions of drones per year. Reports suggest that drones are responsible for over 70% of the casualties in that conflict alone. Meanwhile, Western defense firms are racing to develop the next generation of intelligent, autonomous drones. American startup Anduril, for example, made its debut at the Paris show with its 17-foot "Fury" drone. 
The Fury is a high-speed autonomous aircraft designed to fly alongside fighter jets as a "wingman." The U.S. Air Force plans to deploy more than a thousand drones like it over the coming years. In short, drones are no longer niche gadgets — they're now central to 21st-century defense strategy. And as nations boost military spending in response to global tensions, the market for defense-related technologies is poised for major growth. The New Boom in Defense-Tech InvestingFor decades, if we wanted to invest in defense technology, we were limited to the legacy players including Lockheed Martin, Northrop Grumman, and Raytheon. But today, that's changing. Today, investors like you can participate in early-stage defense-tech startups — in particular, the companies developing drones, sensors, and AI systems that could define the next generation of national security. Keep in mind, defense spending worldwide is surging. According to the Stockholm International Peace Research Institute, global military expenditures hit a record $2.4 trillion in 2024. The thing is, much of the new spending is going toward new, advanced technologies like AI, drones, and autonomous systems. For startup investors, this represents a significant opportunity. As defense innovation moves out of the big contractors' labs and into nimble startups, private investors can now gain exposure to this booming sector at a much earlier stage. Three Early-Stage Defense StartupsIn fact, here are three early-stage startups currently raising capital from investors like you. - Target Arm — Target Arm has developed a patented system that allows drones to launch and recover from moving vehicles — land, sea, or air — without stopping. This capability is critical for both defense and commercial applications, including logistics, surveillance, and search-and-rescue. The company has active relationships with the U.S. Air Force and the U.S. Army.
- AvaWatz — AvaWatz is building AI-powered autonomous systems designed for cooperative defense operations. Its technology enables fleets of drones and robots to collaborate intelligently in complex environments. The company has already secured over $2 million in research funding from the U.S. Air Force and Army.
- Jetoptera — Jetoptera has developed a revolutionary propulsion system that replaces traditional rotors and propellers with a bladeless "Fluidic Propulsion System." This innovation makes aircraft faster, quieter, and more efficient. Jetoptera's technology has drawn attention from the U.S. military for potential use in next-generation drones and air mobility vehicles.
A Final WordKeep in mind that these are early-stage startups. That's why I'm not recommending that you rush out and invest in them. As always, please be sure to do plenty of research before you consider "pulling the trigger"! But if you're intrigued by what's happening in defense-tech today — and believe in the investment opportunity this represents — these might be some good ones to explore. Happy investing, Best Regards,
Matthew Milner
Founder
Crowdability.com PS: Crowdability has no relationship with any of the startups we write about. We're an independent provider of education and research on startups and alternative investments. PPS: Later this month, we'll be introducing readers of Private Market Profits (PMP), our premium research service, to a defense-related startup that we're officially recommending. If you're not already a member of PMP, you can learn more here — or call our Baltimore-based team at 1-844-311-3191 to hear about a special discount. | 
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