Australian Defence Tech Startups to Watch in 2026
Synopsis
From autonomous systems and counter-drone technology to AI, cyber and space capabilities, Australia’s defence-tech ecosystem is entering a new phase of growth. Here are the Australian startups worth watching in 2026 as sovereign capability and AUKUS priorities reshape the industry.
Defence tech has quietly become one of the most active corners of Australian startup investing, Defence and adjacent deep-tech startups attracted significant capital in the first quarter of 2026. Cut Through Venture recorded A$229 million across three space-and-defence deals, while Gilmour Space raised A $217 million in January and Advanced Navigation raised A$158 million in March. Together, those two rounds represented about 21% of the A$1.8 billion raised by Australian startups in Q1, rather than nearly a third.
That's not a blip. It's a sector that's moved from the margins of the startup ecosystem to somewhere near the centre of it, driven by a combination of sustained government spending, AUKUS obligations, and a belated recognition that Australia's reliance on imported defence technology creates a genuine strategic vulnerability.
The Government Money Behind It
The broader context matters here. Australia’s 2026 National Defence Strategy and budget outline approximately A$887 billion in Defence portfolio funding through 2035–36,including A$425 billion for capability investment and a meaningful slice of that is being pointed at domestic startups for the first time.
The most significant new mechanism is the Advanced Capabilities Investment (ACI) Fund. The federal government may contribute up to $500 million into one or more ACI Funds to finance Australian companies developing defence and dual-use advanced capabilities, with private investors expected to match that to reach a $1 billion total. The fund targets six technology areas: cyber, AI and autonomy, electronic warfare, quantum technologies, undersea warfare and hypersonics.
One thing worth being clear about: the ACI Fund is a capital co-investment vehicle, not a procurement guarantee. Receiving ACI Fund investment does not mean a company has secured defence contracts, it means the government is backing the company's development alongside private investors. Procurement is a separate process with its own timelines and approval requirements.
Despite a $347 billion total procurement budget between 2022 and 2025, local startups received less than 0.2% of that spend. The ACI Fund is partly designed to close that gap but critics, including ASPI, have noted that capital alone isn't sufficient without clearer demand signals from Defence and credible pathways from prototype to contract.
Advanced Navigation - Australia's Newest Deep Tech Unicorn
Advanced Navigation is the clearest proof point that Australian defence tech can scale globally. The Sydney company builds AI-based navigation and positioning systems products that have become significantly more strategically relevant as GPS jamming and electronic warfare become standard tools of conflict.
The company closed a AUD 158million(US110 million) Series C in March 2026, led by AirTree Ventures with strategic participation from Quadrant Private Equity and the National Reconstruction Fund Corporation. Existing investors KKR, In-Q-Tel, Main Sequence, Alpha Intelligence Capital, OIF Ventures and former Prime Minister Malcolm Turnbull also participated.
The round confirmed unicorn status. CEO Chris Shaw confirmed to Forbes Australia that "we've doubled in valuation for the last round, we're definitely in unicorn status now," though the exact valuation figure has not been publicly disclosed.
Revenue is projected to exceed US$100 million in 2026, with more than 80% coming from the US and Europe. Advanced Navigation has over 100,000 systems deployed worldwide. The Series C proceeds are being used for an aggressive acquisition strategy and US manufacturing expansion; the company is opening its first US manufacturing hub in Huntsville, Alabama, with engineering work beginning later in 2026.
Gilmour Space - Sovereign Launch Capability
Gilmour Space Technologies raised AUD217million(US145 million) in its Series E in January 2026, jointly led by the National Reconstruction Fund Corporation and Hostplus, with participation from Future Fund, Blackbird, Funds SA, HESTA, NGS Super, Main Sequence, QIC and Brighter Super. The NRFC has separately invested AUD$75 million in preferred equity in Gilmour, making it one of the fund's largest individual commitments.
The Gold Coast company is building end-to-end sovereign space capability designing, manufacturing, testing and launching rockets and satellites in Australia. On 30 July 2025, Gilmour made history by launching Australia's first orbital rocket, with the Eris vehicle achieving 14 seconds of flight before terminating. For a maiden orbital test flight that's a genuine milestone most first attempts don't get further and it moves Australia closer to joining the small group of nations with sovereign launch capability.
For defence purposes, that capability matters because it removes dependence on other countries' launch schedules and infrastructure for satellite deployment.
Hypersonix Launch Systems - Reusable Hypersonic Flight
Brisbane-based Hypersonix Launch Systems raised AUD46million in its Series A in October 2025, led by UK national security investor HighT or Capital. TheNationalReconstructionFundCorporationcontributed AUD10 million in equity its first investment in the defence sector alongside European defence company Saab, Polish family office RKKVC, and Queensland Investment Corporation, with North Ridge Partners advising the deal.
The company is developing reusable hydrogen-powered hypersonic aircraft built around its proprietary Spartan scramjet engine, a 3D-printed system capable of speeds up to Mach 12 that produces zero carbon emissions. Hypersonix was the first prototype contract awarded under the US Defense Innovation Unit's HyCAT program, selected from over 60 applicants. Series A proceeds are being used to develop VISR, an 8-metre reusable hypersonic aircraft designed for intelligence, surveillance and reconnaissance missions.
Silicon Quantum Computing - Quantum for Defence
Silicon Quantum Computing received AUD 20million from the National Reconstruction Fund Corporation in an initial investment,followed by an additional AUD40 million announced in June 2026, bringing total NRFC commitment to AUD$60 million.
The Sydney company's specific claim is that it's the only company in the world capable of manufacturing quantum chips with atomic precision, and one of Australia's only semiconductor manufacturing companies. The defence applications are significant; quantum computing has direct implications for cryptography, signals intelligence and secure communications. The Australian Defence Department has been buying chips from Silicon Quantum Computing, making it one of the few Australian startups with confirmed direct government procurement rather than just investment.
Arkeus - Early-Stage Surveillance
Arkeus is smaller and earlier than the companies above, but worth including. BZV Partners Steve Baxter's 60 million defence focused VCfund backed Arkeusina AUD 5 million raised alongside CSIRO-backed Main Sequence. The company builds defence surveillance technology and sits at the intersection of two credible backers with genuine defence focus.
The Funding Landscape
Note: figures below represent the most recent disclosed funding rounds. ACI Fund investment is a co-investment mechanism, not procurement. Currency notes were publicly confirmed; some sources report in AUD or USD check original announcements for the relevant currency before citing.
| Company | Sector | Round | Amount | Lead Investors |
| Advanced Navigation | AI navigation / positioning | Series C (March 2026) | AUD158M/US110M | AirTree Ventures, Quadrant PE, NRFC |
| Gilmour Space | Sovereign launch / space | Series E (January 2026) | AUD217M/US145M | NRFC, Hostplus, Future Fund |
| Hypersonix | Hypersonic aircraft | Series A (October 2025) | AUD$46M | High Tor Capital, NRFC, Saab |
| Silicon Quantum Computing | Quantum computing | NRFC investment (2025–2026) | AUD$60M total | NRFC |
| Arkeus | Defence surveillance | Seed (2025) | AUD$5M | BZV Partners, Main Sequence |
What's Still Holding the Sector Back
Australia's three leading VC firms Blackbird, AirTree and Square Peg have largely avoided pure defence investment, primarily because superannuation funds that are key investors in those VC vehicles have governance policies precluding weapons investment. The exception is dual-use technology, which is why most companies above are careful to frame their products as dual-use rather than purely military. AirTree's lead on Advanced Navigation's Series C is notable precisely because it's unusual.
American investors have been more willing. In-Q-Tel's participation in Advanced Navigation's raise is the clearest example of US defence-aligned capital moving into Australian companies in ways that domestic VC still largely hasn't matched.
The structural problem the ACI Fund is trying to address is real: despite billions in defence procurement, local startups received less than 0.2% of that spend. Whether the fund translates co-investment into procurement pull-through and not just capital sitting in startups without a clear path to contracts is the question that will determine whether this wave of investment actually builds the sovereign capability it's meant to.
FAQs
What is the ACI Fund and how does it work?
The Advanced Capabilities Investment Fund is a government co-investment vehicle that may contribute up to $500 million alongside private capital to back Australian SMEs and startups in defence and dual-use technology. It targets cyber, AI and autonomy, electronic warfare, quantum, undersea warfare and hypersonics. Importantly, ACI Fund investment is not a procurement guarantee; it funds development, not contracts.
Has any Australian defence tech startup confirmed unicorn status?
Yes. Advanced Navigation confirmed unicorn status following its AUD158million(US110 million) Series C in March 2026. CEO Chris Shaw told Forbes Australia the company has "doubled in valuation" in the last round and is "definitely in unicorn status," though the exact valuation figure remains undisclosed.
How does AUKUS create opportunities for Australian defence tech startups?
AUKUS creates demand for sovereign capability technology that Australia owns and controls rather than buys from overseas. Startups in navigation, quantum computing, hypersonics and space launch are directly relevant to the capability gaps AUKUS is designed to address. The ACI Fund is partly a policy response to that demand signal, though critics note that capital without procurement pull-through won't be sufficient on its own.
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
