Ukraine is becoming a world power in defense technology

The large-scale war has changed the priorities of Ukraine’s technology sector. Innovative military technologies and advanced defense solutions are not only essential for the country’s security: they are also among the most promising vectors for business growth. Ukrainian defense technology is tested directly on the battlefield, in the most challenging conditions. These circumstances allow the products to demonstrate their effectiveness, attracting the interest of international partners, investors and allied countries seeking to strengthen their own defense capabilities.

From my position at the heart of Ukraine’s technology ecosystem, I have seen how quickly the sector has shifted towards defense and how global attention is now focused on our innovations.

The need to counter large-scale Russian aggression has led to a technological boom in the field of defense technology. Hundreds of young startups have emerged, attracting the attention of Ukrainian and international investors. More than 30 countries They have already expressed interest in Ukrainian defense innovations, indicating strong export potential for local technologies.

Since the start of the full-scale invasion in February 2022, Ukraine’s drone industry has grown from small voluntary initiatives to a structured and competitive sector. According to a report by Data-drivenDrone production increased from 5,000 units in 2022 to 4,000,000 by the end of 2024, an 800-fold increase. Today, the country has more than 500 active drone manufacturers and more than 1,000 drone models, with 80% of the FPV drone segment controlled by four companies. Investments in the drone industry in 2024 exceeded $60 million, with seed rounds typically ranging between $1 million and $3 million.

Since its launch in March 2023, the state defense technology cluster Brave1 It has recorded more than 4,600 innovations from more than 2,100 developers. Its members work on attack systems, unmanned aerial vehicles, munitions and advanced reconnaissance, cybersecurity and demining solutions. The group has awarded more than 600 grants totaling more than $52.4 million, effectively acting as the largest “angel investor” for Ukrainian defense innovations. Technologies developed with the support of Brave1, such as trench electronic warfare systems, interceptor drones and logistical unmanned ground vehicles (UGVs), are already changing the course of warfare. Brave1 also facilitates NATO standard coding, battlefield testing, and integration into the Armed Forces.

Investigation for him Kyiv School of Economics and Brave1 shows that investments in Ukraine’s defense technology sector grew from $5 million in 2023 to $50 million in 2024, and the average investment size increased from $500,000 to $1-3 million. The sector’s profit margin is 25%, the highest globally (compared to 17% in NATO countries and 15% in the EU), underlining the economic attractiveness of Ukrainian defense technology.

Ukraine’s rapid rise as a global power in defense technology is not occurring in isolation. Key innovations and successful startups need platforms to showcase their solutions, connect with investors, and scale globally. That’s where IT field in Lviv, Ukraine’s largest tech event, plays a crucial role.

This year, IT Arena will take place from September 26 to 28 and will bring together more than 6,000 participants from 30 countries. The center of the event is the Startup competitionthe country’s main startup battle and the central stage for cutting-edge innovation, including in defense technology. Many of the defense solutions presented at the event emerged during large-scale warfare, when Ukrainian innovators responded to urgent battlefield needs. Recognizing its importance, IT Arena introduced a category dedicated to defense technology, giving startups a platform to present their projects, attract funding and scale globally.

Contestants will have a unique opportunity to connect with venture capital firms, business angels and global investors, and bring Ukraine’s battlefield-tested solutions to international markets.

For the third consecutive year, participants in the Startup Competition 2025 will compete in two categories: general and defense, the latter focused on defense technology and cybersecurity. Defense technology remains the most competitive category, with 52 applications submitted, reflecting the growing importance of security-driven innovation in Ukraine. In total, 202 applications were received from Ukrainian and international teams, including startups from Warsaw, Berlin, Tallinn, Kaunas, Minnesota, Boston, Dundee and Hong Kong.

With such a diverse group of participants, the Startup Competition has also become a major draw for investors. This year, its investment fund has reached a record $12.5 million, providing significant opportunities for startups to grow.

In 2024, participants raised more than $2 million, demonstrating the power of the event as a bridge between Ukrainian innovators and global investors. A notable example is Hard Cat Drones, a startup developing unmanned systems for river and maritime operations. Its kamikaze and reconnaissance drones, tested by the Ukrainian Armed Forces, attracted strategic investment from Double Tap Investments after being showcased at IT Arena 2024.

The competition also attracts a diverse list of investors, from local funds to international venture capitalists, all eager to back Ukraine’s proven defense solutions. The average startup valuation is $5 million, and teams typically seek $600,000 in investments to fuel growth.

Initiatives like the IT Arena Startup Competition show that Ukrainian technology not only meets the urgent demands of war, but can also lead the world in defense innovation.