Q1’26 Venture Pulse Report

Explore the Q1’26 regional insights

Global VC investment surged in Q1’26, driven by record-setting AI megadeals. A small number of multi-billion-dollar fundraising rounds significantly skewed global totals, underlining the growing concentration of capital around a handful of category-defining AI companies.

Global highlights of Q1'26

Global VC investment reached $330.9 billion across 8,464 deals
Q1’26 ranked among the strongest quarters for global VC activity since 2021
AI accounted for most of the quarter’s largest deals, driving highly concentrated funding totals
The Americas captured roughly 80% of global VC investment
Late‑stage deal sizes and valuations rebounded sharply, skewed by AI megadeals

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Americas dominate global VC investment amid AI-led surge

The Americas accounted for the majority of global VC investment in Q1’26, driven overwhelmingly by activity in the US. Several historic AI megadeals propelled the region to a standout quarter, while Europe and Asia also saw solid starts to the year supported by select billion-dollar rounds. Despite this uplift, investment activity across regions remained highly concentrated at the top end of the market.

AI continues to dominate global VC investment

AI attracted a disproportionate share of global venture funding in Q1’26, with much of the total driven by a handful of large LLM-focused raises. Beyond the largest LLM players, a range of AI-focused companies across data platforms, robotics, semiconductors, and industry-specific applications also raised significant rounds, highlighting continued breadth of investor interest across the AI ecosystem.

Defense tech and spacetech remain areas of growing focus

Defense tech and spacetech continued to gain traction among VC investors in Q1’26, supported by both private capital and expanding government engagement. Persistent geopolitical tensions have accelerated interest in autonomous defense, space infrastructure, and dual-use technologies, with governments in multiple jurisdictions increasing support for domestic defense and space ecosystems.

Trends to watch for Q2’26

Looking ahead to Q2’26, geopolitical developments, particularly ongoing conflicts and their impact on energy prices and inflation, will be key factors shaping VC sentiment. AI is expected to remain the strongest area of venture investment, alongside defense tech, spacetech, and cybersecurity. While IPO activity may remain uneven, M&A is expected to play an increasingly important role as a path to exit as companies seek liquidity amid ongoing market uncertainty.

Arguably, Q1'26 was the best quarter the global VC market has seen in quite a while, even normalizing for the big mega-deals. A lot of companies are getting funded, they’re just getting overshadowed in many ways because everyone is focused on the big three. But then there’s been the last few weeks, and that’s throwing a bit of a wrench into things, especially on the IPO front. Entering Q1’26, there were good expectations that we’d see a steady stream of IPOs in the first half of the year. That’s all very much in doubt now.

Conor Moore

Global Head, KPMG Private Enterprise, KPMG International

Partner, KPMG in the US