Ukraine’s defence tech market valued at $6.8B: which technology is growing fastest

The Ukrainian defence technology market is valued at $6.8 billion in 2025, with the unmanned aerial vehicle sector accounting for the largest share. It is growing year on year, as are the segments of UGVs and electronic warfare equipment.

Alongside the market itself, its funding is growing. The KSE Institute, Brave1, and Defence Builder have researched the Ukrainian deftech sector; Defender Media summarises the most notable figures.

UAVs

The unmanned aerial vehicle market continued to grow, reaching $6.3 billion in 2025. This represents a 137% increase from 2024, when it was valued at $2.7 billion. At least 150 companies are active in the market – the sector is driven primarily by private enterprises, though the state player continues to hold strategic weight due to its scale.

Among UAV types, the deep strike segment recorded the fastest growth, at +169% compared to 2024. The middle strike segment also expanded alongside it. The FPV drone market grew by 110%. The authors of the study note that this segment is characterised by intense competition, with a large number of manufacturers offering similar products, as well as constant pressure to improve performance while reducing unit costs.

The bomber segment is more concentrated and limited to a handful of proven models. Its growth rate stands at 121% year on year.

The reconnaissance UAV market – described as “the oldest and most structurally stable” – grew by just 11% compared to 2024. This, however, reflects the sector’s relative maturity. A promising trend within it is the development of Ukrainian alternatives to the DJI Mavic and Autel.

The interceptor market, by contrast, is the youngest and has only entered an active phase of development in 2025. It is currently at the formation stage, offering room for new entrants and technological differentiation. Researchers expect accelerated growth in the near term, driven by the need to counter both reconnaissance and strike UAVs.

UGVs

As with interceptor drones, the unmanned ground vehicles market is also not yet fully formed. Compared to UAVs, this segment developed more slowly, with 2022–2023 described as its “enthusiast period”.

In 2024, the sector was valued at $43 million; a year later, it had grown by 488%, reaching $252 million. More than 50 companies are active in the market, the majority of them small and medium-sized. However, high revenue is concentrated among a handful of leading manufacturers.

Logistics platforms account for the largest market share, at 61% of total volume. The fastest-growing segment over the year was kamikaze robots, which expanded by 967%.

The strike ground vehicles systems segment grew by 19% but, like kamikazes, represents a relatively small share of the overall market. These systems are not yet widely scaled. According to the researchers, this indicates that the platforms do not fully meet frontline unit needs in terms of mobility, protection, ease of operation, and cost-effectiveness.

Overall, the segment is transitioning from an experimental to a more structured phase. The emergence of new companies, growing competition, and the gradual entry of larger manufacturers will drive the next stage of growth and scaling.

Electronic warfare

In 2025, the electronic warfare market was valued at $220 million, up from just $3 million in 2023. Over this period, production has become more concentrated among leading companies, reflecting a shift from experimental development to large-scale manufacturing.

Short-range EW systems account for the largest share of this market, at 36%. This segment grew by 122% over the year, driven by its role as an integral element at the frontline and its large-scale deployment across a significant number of units.

Counter-drone electronic warfare and systems designed to counter precision-guided munitions occupy smaller shares. The latter began to develop in 2025 and, within a single year, captured 19% of the market.

The authors of the study also note the development of sea drones and artificial intelligence, though insufficient reliable data is available to produce a comprehensive report on these markets.

Investment in the deftech sector

Funding for defence companies is also growing, reaching $129 million in 2025. However, this figure covers only publicly disclosed investments and grants, meaning the actual total may be higher. The majority of significant investments went into the artificial intelligence and software segment.

Grants accounted for $78 million of the total. The largest share came from the state cluster Brave1, whose funding grew to over $60 million, up from $40 million in 2024. The money was distributed to more than 600 companies.

Private capital accounted for $51 million. The largest dedicated pool is the D3 venture fund, with $30 million under management. The researchers note that its early investments in Swarmer, Buntar Aerospace, Airlogix, and Frontline Robotics helped legitimise the market for foreign investors. Also mentioned are DB Fund, MITS, Green Flag Ventures, Nezlamni, Darkstar, Freedom Fund VC, Angel One, and WNISEF/u.ventures.