For most of the past decade, founders and venture capitalists treated defence as a third rail. It was capital-intensive, ethically fraught, and shackled to glacial government procurement. That consensus is unravelling. When a country’s former defence minister trades the cabinet table for the cap table, it signals something larger than one career pivot: defence tech is becoming a legitimate, even fashionable, place to build. Canada is now reckoning with whether its ecosystem can move fast enough to capitalise on that shift — and India, running a parallel race under its self-reliance banner, offers a useful mirror.
The signal
According to reporting from Canadian outlet BetaKit, Harjit Sajjan — Canada’s former defence minister — has become a defence-tech entrepreneur, while industry leaders argue the country must move faster to pull defence-adjacent firms into the fold. The symbolism is hard to miss. A politician who once oversaw national procurement and military strategy is now on the other side of the table, betting that the smart money in security is shifting toward software, autonomy, and dual-use hardware.
The deeper story is the chorus around him. Founders and operators across Canada’s tech scene are warning that the country risks losing its best defence-adjacent companies — firms building sensors, AI, communications, and autonomy that have obvious military applications — to faster-moving allies and to larger U.S. defence-tech players. Two structural gaps keep surfacing in these conversations: procurement that takes years rather than months, and a talent pipeline that has historically pushed engineers toward consumer apps and fintech rather than national security. Closing both is now framed less as a defence-policy problem and more as an economic-competitiveness one.
Why defence tech, why now
The normalisation didn’t happen in a vacuum. Three forces are converging.
The first is geopolitics and supply-chain security. War in Europe, tension in the Indo-Pacific, and a renewed scramble to secure critical minerals, semiconductors, and manufacturing have made governments acutely aware of what they cannot build at home. That insecurity translates directly into demand for domestic capability — and into a willingness to fund startups that can deliver it.
The second is the rise of dual-use technology. The same AI models that power logistics optimisation can power targeting and reconnaissance; the same drone stack that inspects pipelines can patrol borders; the same autonomy that runs a warehouse robot can run an uncrewed vessel. Because these technologies straddle civilian and military markets, founders can build for commercial demand while keeping defence contracts in view — de-risking the bet that once made defence feel like a dead end.
- AI: decision support, threat detection, and intelligence analysis built on the same foundation models reshaping enterprise software.
- Drones and uncrewed systems: aerial, ground, and maritime platforms with overlapping commercial and security uses.
- Autonomy and sensing: navigation, perception, and coordination stacks that are inherently dual-use.
The third force is capital. After years of chasing growth-at-all-costs consumer plays, a meaningful slice of venture money is rotating back toward ‘hard’ problems — atoms as well as bits, with long moats and government-scale customers. Defence and national security sit squarely in that category. The taboo that kept many funds out is fading, replaced by the calculation that patient capital aimed at strategic technology can produce durable, defensible companies.
The hurdles
None of this makes defence tech easy. The obstacles that scared founders away are real, and they haven’t disappeared just because the mood has changed.
Procurement remains the central bottleneck. Government buying cycles are built for predictability and accountability, not speed — which is precisely the wrong shape for startups that live or die on runway. A sales cycle measured in years can kill a company before its technology ever reaches the field. This is the gap Canadian industry leaders are pointing at when they say the country must move faster: not just funding startups, but creating fast lanes to actually buy from them.
Ethics and oversight are the second hurdle, and they are not a footnote. Building autonomous and AI-enabled systems for security use raises genuine questions about accountability, escalation, and the limits of machine decision-making. Founders entering this space inherit responsibilities that consumer startups never face. The healthy version of a defence-tech boom is one where oversight scales alongside capability — not one where speed becomes an excuse to skip the hard governance questions.
Finally, there is the sheer capital intensity and time horizon. Hardware, testing, certification, and security clearances all cost money and years. This is a market that rewards investors with conviction and stamina, and punishes those expecting a quick flip. The renewed appetite for hard tech helps, but it does not repeal physics or bureaucracy.
The India parallel
What’s striking is how closely Canada’s debate rhymes with India’s — and how much further along India is in some respects. Industry reporting in 2026 places Canada’s normalisation moment alongside India’s own defence-tech momentum, with startups building autonomous naval and strategic systems under self-reliance initiatives as nations court dual-use innovation amid rising geopolitical pressure.
India has spent years building scaffolding for exactly this. Its iDEX (Innovations for Defence Excellence) framework was designed to channel startups, MSMEs, and innovators into the defence procurement system, offering grants and a structured path to working with the armed forces. Coupled with the broader Atmanirbhar Bharat (self-reliant India) push and a stated intent to reduce dependence on imported strategic hardware, India has treated defence-startup development as national policy rather than an afterthought. The emergence of Indian firms working on autonomous naval platforms and other strategic systems is the visible output of that intent.
The lessons run both ways. From India, Canada can borrow the idea of a dedicated, named on-ramp — a clear front door that tells founders exactly how to engage the defence establishment, backed by early non-dilutive capital and a political commitment to buy domestically. India’s framing of self-reliance as economic strategy, not just security strategy, is also instructive for any country worried about talent and capability leaking abroad.
From Canada — and the broader Western VC shift — India can borrow the capital playbook: deeper pools of private, risk-tolerant money willing to back hard-tech founders, and the cultural normalisation that lets top engineers see defence as a respectable place to build a career. India’s structural channels are strong; the velocity and scale of private capital flowing into them is where Western ecosystems still hold an edge.
The common thread is unmistakable. Across very different political systems, the same conclusion is taking hold: dual-use innovation is now a strategic asset, defence tech has shed its stigma, and the countries that win will be the ones that pair conviction capital with procurement that actually moves. A former minister becoming a founder is the headline. The real story is the scramble — in Ottawa, in New Delhi, and everywhere in between — to make sure the startups building the next generation of strategic technology don’t slip away.
