Well, guys. The moment you’ve all been waiting for is here.
This morning, the Silicon Valley Defense Group released its fourth annual NatSec100 report, looking at the state of things in our cute lil’ defense tech world and the companies dominating the game. And lucky for you, we here at Tectonic got an exclusive first look.
So–for those of you who can’t quite face a full report with a Memorial Day/bank holiday hangover (it’s okay), we’re going to break it down for you. Happy Tuesday.
Change it up: First things first, let’s start with who SVDG is and how they put this report together.
- The group was founded back in 2015 to (put simply) create a bridge between innovators and capital in Silicon Valley and the world of defense.
- They put out their first annual NatSec100 report in 2023—basically, tracking the companies making the biggest moves in the defense tech ecosystem (importantly, not traditional defense primes) in terms of capital and growth.
- The result is a list of the most influential companies in the sector and a report looking at the overall health of defense tech land.
This year, they changed the way they measure that influence. Instead of tracking solely on overall company growth indicators (capital raised, headcount, etc.), for this report, they teamed up with Pryzm and included contracting data as well.
“When we started this, there were a couple 100 companies to evaluate. Now there’s about 1000,” SVDG Executive Director Mike Keating told Tectonic. ”They’re producing [and] deploying technologies. These technologies are being used in theater. So, how do you sift through that noise, and how do you come up with a ranking system that makes more sense for today, given the improved maturity of that ecosystem?”
Contracts serve as a “proxy for operational impact,” he said. The idea is to “turn…attention from innovation and incubation to innovation and adoption,” James Cross, SVDG founder, said in the report.
Plus, it’s not all about VCs now—SVDG teamed up with J.P. Morgan on this one (their launch today is at their fancy new offices in New York), and Keating told Tectonic that a big focus not only on helping Silicon Valley connect with defense, but also on helping institutional capital better understand how to deploy later-stage capital into these defense tech companies.
“The whole point of this is that we’re trying to build a new American industrial base,” Keating said. “How are you going to do that? You’re going to have to start engaging capital markets. Only capital markets are going to get you the speed to scale production that we need.”
Bring in the big dogs.
By the numbers: So, let’s jump into the results. First off, here’s where things stand, industry-wise:
- There have been $16B in total federal obligations to NatSec100 companies to date—up 36 percent from 2025, per the report. $6.5B of those were federal prime contracts.
- NatSec100 companies have raised a total of $304.1B (including OpenAI) and $118.2 (without OpenAI). That’s up 106 percent (again, without OpenAI) since May 2025.
The top ten companies are:
- Anduril
- Saronic
- Sierra Space
- Scale AI
- Shield AI
- Databricks
- Axiom Space
- Forterra
- Castelion
- CesiumAstro
While there is a lot of repetition on the list (24 companies have appeared on all four editions of the list), there were also a lot of newcomers—38 companies are on this year’s NatSec100 for the first time, including Picogrid, Divergent, Vulcan Elements, Code Metal, Havoc AI, Defense Unicorns, and Aalyria.
- A lot of companies you will be very familiar with—including Hermeus, Govini, Skidoo, Castelion, Chaos, Saronic, and Shield AI—have also moved majorly up the list. Hermeus went up 63 spots, Govini went up 79, by way of example.
- Keating pointed out that there were far fewer commercial first companies on the list this time around. Most of the winners are defense (or government) first businesses.
Feeling shifty: So that’s all well and good. Companies are still growing and raising money, while also scoring some government contracts. But what does this all actually mean in terms of the shifts impacting defense tech land?
Here’s where SVDG landed on what’s changed (using their terminology):
- Washington rewired the rules: The Pentagon—and the government as a whole—are like, actually changing the way they buy and develop weapons, but spend on nontraditionals is still a tiny portion of the overall defense budget, and it’s too early to see the impact of acquisition reform on the list.
- The battlefield imperative: The urgency of conflicts in Ukraine and Iran has meant the Pentagon has started acquiring and fielding novel tech (especially autonomous tech) faster, using fun, creative contracts like OTAs. But wide-scale speed and deployment still need to be proven.
- Production as the bottleneck: New, shiny, fun drones and munitions are only useful if you can build them at scale. A lot more money is still flowing into developing the tech itself rather than the infrastructure required to churn it out.
- The capital stack is being rebuilt: Put simply, the government is trying out new ways of getting money to non-traditional companies through things like the Office of Strategic Capital, the Economic Defense Unit, equity stakes, DPA-backed financing, multi-year purchase orders, and things like big ol’ IDIQs. However, it’s not yet clear whether these are actually making a significant difference.
- The primes are adapting: Basically, the primes are learning how to play nicely with newer defense tech companies. Venture spending by primes is way up, as are partnerships/subcontracting relationships and M&As.
- The exit landscape is maturing: On that note—the path to exit for newer defense tech companies is kinda sorta appearing. About 20 companies have “graduated” off the NatSec100 since 2023 through acquisition or public offering (including SpaceX). According to SVDG, “these exits represent the clearest evidence yet that defense tech is producing real liquidity events and that the asset class is becoming durable.”
Other interesting changes:
- OTAs are becoming even more the name of the game—33.4 percent of contracts awarded to NatSec100 companies from 2020 to 2025 were OTAs.
- The Air Force is leading the nontraditional charge, with the most spend (like over $1B) on NatSec100 companies in FY25. Next up is the Navy, followed by the Army.
- Contract types are also changing—this year, 8 percent of contracts to companies on the list were production contracts, up from pretty much zero.
Risky business: But all these positive-seeming changes don’t mean we’re all the way there yet. Risks remain, per this year’s report:
- Companies on the list are still super-duper concentrated in a few critical technology areas: applied artificial intelligence, quantum and battlefield information dominance, and contested logistics. Scaled hypersonics, bio-manufacturing, and scaled directed energy get a lot less attention. This concentration applies to private capital, too.
- Speaking of money: There is still a massive gap between private capital and federal dollars here. Like, a $102.2B gap between private capital and federal awards to NatSec100 companies (if we don’t count OpenAI).
- To that end—the share of the Pentagon’s budget going to companies on the list is still teeeeeeny tiny (like 0.52 percent in 2025).
Pro tips: So here’s what SVDG and its leadership recommended:
- Emphasis on adoption: The Pentagon (and companies) should actually focus on what’s being fielded and works. Their suggestion is that every acquisition office should publish an “adoption scorecard documenting what got fielded, what remains in prototype, and what stalled and why.” Show the receipts.
- Rebuild the acquisition workforce as a “warfighting priority”: That means following the Navy’s example and creating a shared framework (like the Innovation Adoption Kit) for how to buy emerging technology.
- Put government money towards the hardest problems: DoW should use things like the OSC and EDU to fund super-hard things like energetics, microelectronics, advanced materials, and manufacturing infrastructure. And follow up to make sure those loans, like, make a difference.
- Make sure there’s a clear demand signal: The Pentagon should also clearly publish, like, what they actually want. Show the market where you will invest and where you won’t.
Future so bright: If all goes according to plan, Keating hopes to see more exits and more later-stage investments in next year’s report.
“We want to see more exits of a diverse type, we would like to see more IPOs…we would love to see small- and mid-cap IPOs, we would like to see more M&A, we would like to see more sustainable private companies,” he said.
Plus, there will (hopefully) be the impact of all of the acquisition reform going on inside the Pentagon.
“I think for the first time in a generation, you sort of have a bipartisan opportunity where everyone’s rowing in the same direction here, but implementation takes longer than announcements,” he said. “I think we’re going to see a lot more of that [impact] next year.”