There’s a new kind of energy running through Canada’s tech sector and it’s coming from a place that most people didn’t expect – defence. In the past, the country’s tech ecosystem was largely built around FinTech, HealthTech, e-commerce and Software-as-a-Service (SaaS).
But that story is changing and it’s changing fast. A collision of events from rising tensions in the Arctic to a complicated relationship with the United States under the Trump era and NATO’s pressure on member states to spend more has pushed Canadian politicians and investors to take domestic defence innovation far more seriously.
How Has Canada’s DefenceTech Landscape Changed?
In their 2025 Budget, Canada committed $81.8 billion towards defence and launched its first-ever Defence Industrial Strategy earlier this year. They announced that $6.6 billion would be spent over five years specifically targeting the defence industrial base.
Meanwhile, the venture capital investment in DefenceTech hit a record $49.1 billion globally last year, up from $27.2 billion in 2024. Canada’s startups are positioning themselves to catch that wave.
What makes this moment particularly interesting is the type of startups that are emerging. They are software-first, AI-enabled and hardware-savvy setting out to build products the Canadian Armed Forces don’t yet know they need.
Canadian DefenceTech Startups Finally Having Their Moment
The country’s defence sector is undergoing quite a transformation, driven by a surge in venture capital and a new national focus on sovereign innovation. Some of these startups are proving to be high-growth, specialising in dual-use technologies that serve both military and commercial needs.
1. Kraken Robotics
Kraken builds synthetic aperture sonar systems, subsea batteries and autonomous underwater vehicles for both naval defence and offshore energy clients. The company trades on the TSX Venture Exchange and has grown into one of the most credible names in maritime technology on the global stage.
They completed their acquisition of 3D at Depth, expanding its subsea service capability into the US market and have received $34 million in SeaPower battery orders.
In 2024, Kraken reported a 31% revenue jump to $91.3 million, with its sales pipeline more than doubling to $2 billion year-over-year.
2. NP Aerospace
NP Aerospace is a global armour technology manufacturer and vehicle integrator that operates with a distinctly Canadian identity. They supply ballistic helmets, body armour plates, EOD suits and composite vehicle armour to the UK Ministry of Defence, Canada’s Department of National Defence and NATO allies.
To date, the company has integrated over 2,000 military vehicles and delivered more than one million combat helmets to allied forces across the UK, Canada and Italy.
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3. CarteNav
CarteNav is a Halifax-based software company which builds mission management systems for maritime patrol aircraft and ISR (intelligence, surveillance and reconnaissance) operations. Their AIMS software helps aircrews collect, process and make sense of sensor data in real time, turning aircraft into smarter, more capable intelligence platforms.
The company has raised around $2.8 million in funding with clients that include the Royal Canadian Air Force and other partner nations.
4. VRFY Inc
VRFY Inc is a Kelowna-based startup building AI-powered transcription and data intelligence tools specifically designed for law enforcement and defence. In industries where accuracy is legally and operationally non-negotiable, they have built a platform grounded in enterprise-grade security, ISO-certified compliance and end-to-end encryption.
Initially, the company was designed to solve the transcription problem for police and military intelligence applications but have since expanded into legal, finance and corporate security.
5. Dominion Dynamics
Dominion Dynamics was founded in October 2025 and is building sensing systems and autonomous platforms designed specifically for Arctic military and civilian operations. In January of this year, they closed a $21 million CAD seed round, making it the largest early-stage DefenceTech fundraise in Canadian history.
With pre-seed funding included, their total capital raised stands at approximately $26 million. They have a 25,000 square-foot factory opening in Kanata, Ontario with plans to triple their headcount to 75 staff throughout the year.
6. ArcadianAI
ArcadianAI is one of Canada’s newer entrants in the AI-for-defence space, focused on applying artificial intelligence to operational decision making and situational awareness.
The startup is working to bring machine intelligence to defence applications in a way that’s aligned with Canadian sovereignty goals and NATO interoperability standards.
7. Incendia
Incendia is a Canadian startup focused on intelligent civil security solutions, specifically focused on intelligent protection and rapid deployment systems designed to protect people and property.
By building tools that serve both civilian emergency response and security-sector applications, the company reflects the broader trend of Canadian companies designing for both markets simultaneously. Right now, their work sits in the dual-use space that Canada’s Industrial Defence Strategy is actively trying to develop.
