United States: Q1’26 Venture Pulse Report

US VC investment surged to a record high in Q1’26, driven by multiple historic AI megadeals, with late‑stage activity rebounding while fundraising and exits remained concentrated among established players.

Q1'26 highlights from the US

US VC investment reached $267.2 billion across 3,336 deals
Q1’26 marked a record quarter for US VC activity, driven by AI megadeals
Four $10B+ AI financings reshaped the US venture landscape
Late‑stage deal sizes and valuations rebounded sharply
Fundraising and exits remained concentrated among established players

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Deal value surges as volume remains uneven

VC deal value in the US rose dramatically in Q1’26, propelled by a wave of multi-billion-dollar AI financings. While overall deal counts remained uneven, investors continued to prioritize fewer, higher-conviction investments amid ongoing macroeconomic and geopolitical uncertainty.

AI megadeals reshape the US VC landscape

Q1’26 marked the most significant quarter on record for large AI financings in the US, with multiple $10 billion-plus rounds redefining market dynamics. The largest deals were concentrated among leading large language model developers, reinforcing the increasingly power-law nature of venture capital. Beyond the largest LLMs, other AI-focused companies across data platforms, robotics, infrastructure, and industry solutions also attracted substantial investor interest.

Late-stage confidence returns

After several quarters dominated by defensive and balance-sheet-support financings, Q1’26 saw a number of late-stage US startups return to growth-oriented funding rounds. While investor selectivity remains high, rising late-stage deal sizes suggest increasing confidence among investors backing companies viewed as category leaders or IPO-ready over the medium term.

Exit and fundraising dynamics remain polarized

Exit conditions in the US remained uneven during Q1’26, with IPO activity pausing amid geopolitical tensions and macro uncertainty. M&A activity continued to play an important role as a liquidity pathway, while fundraising activity strengthened primarily at the top end of the market, with capital concentrating among established managers and flagship funds.

Trends to watch for in Q2’26

Looking ahead to Q2’26, investor sentiment in the US VC market will be shaped by geopolitical developments, inflation expectations, and the trajectory of the IPO market. AI is expected to remain the dominant investment theme, alongside defense tech, spacetech, cybersecurity, and energy-related technologies. While large exits may remain selective, strategic M&A and selective IPOs could begin to re-emerge should market conditions stabilize.

I think it’s clear that certain VCs are doubling down. Part of that is you’ve got to keep increasing your holds so you don’t dilute your ownership and returns. Additionally, if you were in on any of the large deals, you have the opportunity for a potentially large exit. These big investments are really centered around a few companies as well, which suggests VC investors are putting money on companies they expect to be the winners, as opposed to putting those kinds of bets on smaller players in the space too.

Shivani Sopory

Partner

KPMG in the US