From garage drones to NASDAQ: Has Ukraine’s defense tech come of age?

A fast-growing defense industry is fueling innovation and investment, even as concerns mount over market concentration and state influence. People look at drone parts displayed at the exhibition of Ukrainian components for defense technologies during the Brave1 Components event in Kyiv, Ukraine, on Dec. 3, 2025. (Oleksandr Klymenko/Ukrinform/NurPhoto/Getty Images) Prefer on Google by Dominic Culverwell A party at a swanky downtown Kyiv restaurant feels a world away from the front lines of Russia's war against Ukraine. Yet its guests — defense analysts, consultants, and arms producers — are nonetheless shaping how the war is fought. The event's host was Skadi Law, a new firm focusing exclusively on Ukraine's fast-growing defense tech sector . Its arrival is not an isolated story, but part of a broader trend: an expanding network of venture capital funds, accelerators, consultancies, and media companies springing up around the industry. "The size of the pie is increasing, and there's work for everyone — the Ukrainian defense ecosystem has so much to offer," Damien Magrou, managing partner and co-founder of Skadi Law, told the Kyiv Independent in an interview after the event. Once a patchwork of IT engineers building crude drones at home , the sector's rapid evolution points to a new phase — one defined by consolidation, as larger and more professional companies emerge, attract investment, and scale production. "What I can see is a market maturing — everything points in that direction," Magrou said. With four years of full-scale war giving the industry time to mature, and a new war in Iran adding further momentum, the growth could lay the foundation for the sector to become a pillar of Ukraine's post-war economy. A recent wave of deals highlights how rapidly the transformation is unfolding. In March alone, drone AI startup Swarmer became the first Ukrainian defense tech firm to list on NASDAQ, Interceptor drone producer General Cherry signed deals for production sites in the U.S., and President Volodymyr Zelensky signed 10-year defense deals with three Gulf countries amid the war in the Middle East. 0:00 / 1× Ukrainian-American drone AI startup Swarmer's promo video. (Swarmer) The same month, dual-use company Sine Engineering was selected as the first project for the U.S.-Ukraine Reconstruction Investment Fund, the result of last year’s 'minerals deal,' signaling Washington's growing view of Ukraine's defense tech sector as strategic. Despite this growth, significant questions remain around export and profit margin restrictions in Ukraine, as well as government interference, all of which could hamper future development. "I will do everything in order not to move abroad. If you asked me one or two years ago, I would say no, but now I'm thinking about it," one defense firm, who agreed to speak on condition of anonymity to discuss matters freely, told the Kyiv Independent. "I want to develop, but we have these limitations in terms of margins, R&D investments, and foreign investments. It’s much easier to attract investments in the U.K. in Ukraine." Ukraine’s defense tech market, archaic and underfunded before 2022, was valued at $6.8 billion this year by the Kyiv School of Economics (KSE) — around six times larger than in 2021. Some estimates put the current number of private defense companies as high as 1,200 — more than double 2023 figures — with the capacity to produce $50 billion worth of weapons. Ukraine produced around 4.5 million drones last year — up from 300,000 in 2023 — with most being small first-person view (FPV) drones. Meanwhile, the U.S., the richest army in the world, plans to produce only 300,000 small drones over two years. Accelerators and incubators have been central to that growth, like the government-backed Brave1 platform, Alexander Ulanovych, a partner at headhunting firm Amrop Ukraine, told the Kyiv Independent. It has helped firms like drone giant TAF Industries scale production to over 80,000 drones a month. An engineer collects FPV drones of the "General Cherry" company at the workshop in an undisclosed location in Ukraine, on Dec. 4, 2025. (AP Photo/Evgeniy Maloletka) Once heavily dependent on its foreign partners for weapons, Ukrainian companies made up 82% of suppliers to the army last year — a massive jump from 46% in 2024 — providing over half of the army’s weapons. And that’s without any Ukrainian primes — the industry term for major defense companies like Raytheon. "We have a lot of opportunities right now. All you need is a good idea and a team that is eager to develop something useful," Andriy Bandrovskyy, co-founder and CEO of RendRock Ukraine, a miltech firm producing drone ammunition, told the Kyiv Independent. In practice, only a few dozen are actually market-ready, said Jan-Erik Saarinen, co-founder and CEO of Double-Tap Investments, a defense tech investment firm founded in 2024. Just a handful of firms make up 80% of total drone production, he added.