Global VC investment surges to record $330.9 billion in Q1’26 on back of AI megadeals, according to KPMG Private Enterprise’s Venture Pulse

KPMG Private Enterprise’s Venture Pulse

• Americas attracts $270.1 billion in VC investment: over 80% of global total
• Best quarter ever for VC megadeals, with ten over $2 billion

Q1'26 - Key Highlights

• Global VC investment increased from $128.6B billion across 10,097 deals in Q4’25 to $330.9 billion across 8,464 deals in Q1’26. 
• VC investment in the Americas rose from $78.6 billion in Q4’25 to $270.1 billion in Q1’26, driven primarily by the United States - where investment increased from $72.6 billion to $267.2 billion quarter-over-quarter. In Europe, VC investment rose from $23.4 billion in Q4’25 to $25.7 billion in Q1’26, while in Asia it rose from $26.2 billion to $31.8 billion.
• Software remained the leading sector for VC investment globally, attracting a quarterly record of $225.2 billion in Q1’26 - almost matching the sector’s 2025 annual total, and on a clear path to exceeding 2021’s record of $241.5 billion.
• Global exit value more than doubled from $184.3 billion in Q4’25 to $413.5 billion in Q1’26 - the highest level seen since Q4’21; exit value was driven primarily by large M&A deals, while IPO activity remained more muted.
• VC fundraising remained slow in Europe and Asia in Q1’26 but saw some rebound in the US; during the quarter, the US saw $47.8 billion in funds raised versus $66.7 billion during all of 2025 - driven particularly by larger funds over $500 million.

Global VC investment in AI remained extremely strong in Q1’26. Although the largest rounds were captured by major US-based LLM companies, investor interest extended well beyond foundational models to a diverse mix of AI-related startups across regions. These included companies focused on semiconductors, datacenters, and other enabling infrastructure, as well as AI platforms, agentic AI, physical AI, and vertical-specific solutions.

VC investment in the Americas surged from $78.6 billion in Q4’25 to $270.1 billion in Q1’25, with the increase driven overwhelmingly by the United States. US investment climbed from $72.6 billion to $267.2 billion quarter-over-quarter, fueled by a small number of massive outlier deals - most notably OpenAI, Anthropic, and xAI. At the same time, fundraising activity in the US strengthened considerably, with $47.8 billion raised by the end of Q1’26 - already more than half of the total raised in each of the last three years. The activity seen in the US during Q1’26 underscored continued LP preference for highly established fund managers, in addition to growing confidence in the market, particularly around AI.

Reflecting the strength of the quarter, the Americas also recorded 66 new unicorn births, up from 44 in Q4’25 and well above recent historical norms. Many of these new unicorn births occurred in the AI space as VC investors poured capital into the VC market’s most sought-after segment, driving valuations higher.

Europe’s VC market remained relatively robust in Q1’26, with $25.7 billion in VC investment, supported by a record wave of megadeals, particularly in the AI and deeptech sectors. The region saw six companies raise $1 billion or more – the highest total on record. Many of the largest rounds in Europe reflected growing investor interest in the application of AI across sectors, including infrastructure, autonomous driving, energy management, enterprise software, cleantech, and legaltech. Defense tech also continued to gain traction as an asset class, supported by growing investor interest in dual-use technologies.

While Europe saw a strong start to Q1’26, momentum weakened meaningfully during the final month of the quarter as geopolitical uncertainty weighed heavily on investment activity.

VC investment in Asia continued to recover in Q1’26, with investment rising from $26.2 billion in Q4’25 to $31.8 billion in Q1’26, driven by a number of large raises, including a $2 billion raise by China-based Rokid, and a $2 billion raise by Singapore-based DayOne. The geographic spread of these large deals highlights the growing breadth and maturity of the VC markets across the region.

China had a particularly robust quarter of VC investment in Q1’26, driven by renewed interest in AI, deeptech, biotech, semiconductors, and space innovation; the country saw a number of major funding rounds by AI-focused companies, including Rokid, Earendil Labs, Moonshot AI, and Stepfun.

Global exit value increased from $184.3 billion in Q4’25 to $413.5 billion in Q1’26 - the highest level of exit value seen since Q4’21 - even as overall deal count remained relatively stable. This sharp increase in deal value was driven primarily by M&A activity, including several exceptionally large transactions, including SpaceX’s acquisition of xAI. IPO activity, by contrast, presented a more mixed picture; during the quarter, IPO activity accounted for $65.2 billion in transaction value, while IPO volume remained quite subdued at 83 new listings. Regionally, IPO markets in the Americas began the quarter on a solid note before losing momentum as increasing geopolitical uncertainty pressured market sentiment, while Asia continued to benefit from the stronger trajectory established in 2025.

Looking ahead to Q2’26, geopolitical tensions will remain a key watchpoint for the VC market, particularly in the Americas and Europe as higher oil prices and renewed inflation concerns create a more fragile backdrop for investment. This uncertainty could keep US IPO activity largely subdued unless conditions improve quickly.

AI is expected to remain the top focus for VC investors globally, with continued investment in both foundational models and application layer-focused companies. The AI space is also expected to draw increasing M&A activity. More broadly, defense tech, spacetech, and cybersecurity are expected to attract growing interest from VC investors given the more volatile and uncertain global environment.

Dannielle McAllister, Global Media Relations Manager,
KPMG International

T: +44 7704 675 753
E: dannielle.mcallister@kpmg.co.uk

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