Early-stage defense and space companies are increasingly opting for backdoor listings through special purpose acquisition companies (SPACs) this year, driven by surging investor interest, flexible capital, and a faster route to market. So far in 2026, six such companies have announced SPAC mergers, accounting for about 10% of all deals, up from three in 2025. This trend is exemplified by U.S. defense firm Ursa Major's $2.3 billion SPAC deal last month. The sector is benefiting from rising government and commercial spending, with the Trump administration proposing a sharp increase in the 2027 U.S. defense budget to $1.5 trillion from $901 billion in 2026. Additionally, prominent figures like Eric Trump and Donald Trump Jr. are investing in defense and space firms pursuing SPAC deals.