The wars in Ukraine and West Asia have made drones a fixture of every serious arsenal, on battlefields that demand precision and mass at once, and where targets deep inside heavily defended airspace are struck again and again.
India’s own experience during Operation Sindoor in May 2025 reinforced the point. The conflict showed the value of holding an adversary’s targets at risk from beyond its reach, and of fighting without bringing troops into contact. Since then, makers of unmanned aerial systems, most of them startups, have seen orders from the three services arrive far faster than before.
Data provided by Tracxn, a private market intelligence platform, and analysed by Blueprint show that 2025 also brought a sharp jump in the equity funding raised by India’s military and defence drone startups. Funding more than quadrupled to $159.2 million, a 343.1 per cent year-on-year rise, equal to about 90 per cent of the $176.3 million raised from 2020 to 2024 combined. In 2026, however, these startups have raised just $4.39 million up to October 5, 97.2 per cent less than in all of 2025.
The founder of one of the sector’s larger startups, speaking on condition of anonymity, said the sharp fall in funding also reflected companies still absorbing the large sums raised the previous year, and perhaps the absence of any large player raising funds in 2026, likely because they had already done so in 2025. Deal activity has thinned too: according to the data, the number of funding rounds fell from 27 in 2025 to 11 in 2026 up to October 5.
The pattern is sharper still among India’s pure-play military technology startups, those whose applications are primarily defence-specific, with no meaningful civilian or commercial use identified. According to the data, equity funding for these companies rose nearly sixfold in 2025 to $225.7 million, a 477.2 per cent year-on-year rise and about twice the $112.5 million raised from 2020 to 2024 combined. In 2026 up to October 5, however, they have raised just $5.22 million across seven funding rounds, against 18 the year before, 97.7 per cent less than in all of 2025.
Dual-use technology startups, whose applications span both defence and civilian or commercial markets, tell a different story. Together with pure-play firms, they make up the whole of India’s military technology startups in the Tracxn data, and no company is counted in both groups. Their equity funding peaked at $90.9 million in 2024 and fell 37.5 per cent to $56.8 million in 2025, even as pure-play funding surged. But they have not slid as sharply in 2026: up to October 5, they have raised $48.2 million, 15.3 per cent less than in all of 2025. Over the same period, pure-play military and drone startups saw falls of 97.7 and 97.2 per cent, respectively.
The 10 most-funded Indian military drone startups in the Tracxn data are, in order, Raphe, ideaForge, Garuda Aerospace, Vayudh, Anadrone, EndureAir Systems, S4E, BonV Aero, IG Defence and Aeroarc. Together they have raised $322.4 million, with Raphe alone accounting for $154 million, or 47.8 per cent. Uttar Pradesh is home to three of them (Raphe, EndureAir Systems and IG Defence), more than any other state on the list. Maharashtra and Delhi have two each, while Tamil Nadu, Haryana and Odisha have one apiece. The three Uttar Pradesh firms account for about 53 per cent of the group’s total, though about 90 per cent of that is Raphe’s.
Tracxn’s September 2026 report on military technology tracks 3,224 companies worldwide that supply technology to armed forces, from makers of unmanned weapons systems to firms providing training simulators and medical technology. Of these, 416 were founded in India, the second-highest number after the US, with 1,215. India also ranks second by the number of companies that have raised funding: 109, against 270 for the US. But measured as a share, India does less well. Only about one in four Indian companies (26 per cent) have raised funding. In France, the figure is 42 per cent; in Turkiye, 38 per cent; in Israel, 36 per cent; and in China, 29 per cent. Among the eight countries with the most military technology companies, India ranks fifth on this measure, ahead only of Canada (24 per cent), the United Kingdom (23 per cent) and the US (22 per cent).
3. Data is captured for equity funding only.
4. Funding data is captured irrespective of the founding year.
5. Y-o-Y growth = (funding in year ÷ funding in previous year) − 1. The 2026 YTD figure covers only Jan 1 to Oct 5, 2026, so its Y-o-Y versus full-year 2025 is not like-for-like.
Source: Tracxn
Military technology startup funding in Op sindoor year tops previous five combined, then slumps
Military technology startup funding in Op sindoor year tops previous five combined, then slumps
Note: *- Till October 5, 2026;
1.Data is captured for equity funding only.
2.Classification is based on publicly available evidence from official websites, press releases and credible media.
 "Drone startup funding slumps in 2026")
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