KAPITAL PARTNER INSIGHT · AUGUST 2026
Why revenue quality, battle proof and deal structure matter more than the headline multiple
Defence-tech valuation is not primarily a question of selecting the “right” revenue multiple. Two companies with the same revenue and growth can have materially different values because the quality of the evidence behind that revenue – and the ability to transfer it from Ukraine to NATO markets – is different.
This Insight explains how value is built as technology, battlefield validation, repeat orders, scalable production, international qualification and NATO sales progressively reduce risk. It also shows how remaining uncertainty can be addressed through deal structure instead of being forced into a single headline multiple.
Four central themes
Battle proof is valuable – but not binary
Operational use in Ukraine can demonstrate that a system works under real conditions, electronic warfare and changing tactics. The strongest evidence is not simply that the product has been used, but that independent military users have used it repeatedly, placed repeat orders and can document the results credibly to other countries’ armed forces.
Revenue quality matters more than the invoice total
Investors should establish who selected the product, who contracted the order, who financed it, who ultimately paid, and whether the purchase was repeated. A large one-off order financed by an NGO may have less value than a smaller, repeated and centrally or internationally funded order with better visibility and payment quality.
Moving from Ukraine to NATO can trigger a commercial re-rating
A first meaningful NATO sale validates more than technical performance. It also demonstrates international product-market fit, compliance, cybersecurity, quality assurance, supply-chain acceptability and the ability to support customers outside the Ukrainian operating environment. A smaller international production order can therefore reduce more risk than additional Ukraine revenue.
Structure around uncertainty
Disagreement about future Ukraine revenue or international scaling should not necessarily be resolved through a single lower or higher multiple. Value can be divided into a base value for what has already been demonstrated and contingent value linked to specific milestones. Ratchets, tranches, preferred equity, Ukraine-linked contingent value and NATO milestones can allocate risk more precisely.
Main conclusion
Defence-tech valuation is fundamentally about evidence, transferability and risk allocation.
The central question is how much of the company’s value is already sufficiently de-risked to price today, and how much should depend on future Ukraine sales, NATO commercialisation, certification, production scale-up or other milestones. The right valuation is only half the transaction; the other half is deciding who bears the risk if the assumptions do not materialise.
Read the full Kapital Partner Insight
The full analysis covers the valuation bridge, battle-proof levels, revenue quality, Ukraine-to-NATO commercialisation, dual-market value, public and private multiples, and practical deal structures.
Specialised corporate finance advisory for defence-tech
Kapital Partner advises defence-tech companies and investors on valuation, capital raising, financing, strategic partnerships, IPO readiness and access to Nordic and international capital markets.
Jesper Ilsøe
Partner
ji@kapitalpartner.dk
+45 26 80 27 28
