The most recent venture funding developments display a clear picture: AI remains the hugegest magnet for capital globally, while infrastructure and defense-related tech are surging too. Simultaneously, regional shifts, secondary markets, and investor expectations are reshaping the startup investment landscape—and 2026 sees like a year of reckoning and rebalancing.
Global and Regional Funding Trconcludes
AI Dominates Global Venture Capital
Venture funding bounced back in 2025, reaching roughly $469B—its highest level since 2022. But the real standout is AI: nearly half of all VC dollars went there, with mega-rounds capturing a staggering share of the overall capital. US startups alone raised about $328B—70% of global funding—while Asia and Europe trailed behind .
Beyond that, PitchBook tallied AI startups pulling in approximately $192.7B—over 50% of total global VC investment—marking the first year AI held a majority stake .
At the same time, CB Insights highlighted that mega-rounds surged 77% in 2025, totaling 738 deals and accounting for 65% of all venture funding. Meanwhile, deal volume shrank by about 17%, signaling fewer but larger checks .
These trconcludes add up to a singular reality: investors are placing huge bets on a select handful of AI winners, while many startups outside that orbit struggle to attract attention.
Europe’s Strategic Surge in AI and Defense
Europe saw record VC activity in 2025, climbing 5% year-over-year to €66B—its highest post-pandemic total .
AI was central, garnering €23.5B—up from €17.7B in 2024—and defence-oriented firms added nearly $8.7B. High-profile rounds included Synthesia’s $200M at a $4B valuation, ElevenLabs with $500M at $11B valuation, and discussions around Swedish legal AI firm Legora to more than double its value .
This reflects Europe’s dual drive: competitiveness on AI and enhanced security amid geopolitical tension.
North Carolina Experiences a Funding Softening
Despite a strong ecosystem, North Carolina’s startup funding dropped sharply in 2025 to about $2.3B—more than 40% below 2024 levels. A key factor was Epic Games opting out of fundraising .
Still, the state’s five-year outsee remains healthy, with investments 54% higher than in 2015. Experts expect continued resilience, particularly in biotech and software sectors .
Antler’s Bold Expansion
Singapore-based Antler dramatically scaled up, executing over 400 investments in 2025—four times its volume in 2020 . Buoyed by its success, Antler has just closed a $160M U.S.-focutilized fund and aims to back around 500 early-stage ventures in 2026 .
The firm’s diversified, high-volume strategy seems designed for the AI era—spreading bets across many founders to capture the next breakout winners. An exit, like a secondary sale of Airalo shares, reportedly netted a staggering 36,100% return .
Structural Shifts and Emerging Themes
Market Tightens, ROI Rules
A striking shift is underway: VC is demanding real, measurable value. Gone are the days of “spray-and-pray”—startups must deliver efficiency, traction, and defensible tech to stand out .
Expectations include:
- Tiny, efficient teams leveraging AI to scale quickly.
- AI agents evolving into digital workers with budobtains and outputs.
- Pressure on valuations, with investors calling for proof of ROI .
AI vs. Non-AI: A Structural Bifurcation
The funding world is rapid splitting into two camps: AI and everything else.
In January 2026 alone, AI captured 85% of global investment. Seed-stage AI firms even commanded a 42% valuation premium. VCs reportedly display “zero interest” in non-AI deals, especially for generic SaaS startups, signaling a hard shift in criteria .
Explosion in Agent Infrastructure Funding
As AI agents rise, so does funding for the infrastructure that supports them. Startups like Concourse are pulling in capital to build platforms—VC timelines are stretching longer, as returns on these bets may take 5–7+ years .
Liquidity Resurfaces through Secondaries
2025 saw a massive $60B+ in secondary transactions—an overdue release valve for stuck capital. With IPOs still limited, this is becoming critical for early investors and employees seeking cash. Demand is increasing, and discounts are narrowing .
Hard Tech and Climate Tech Gain Ground
AI’s cloud may overshadow, but hardware-oriented startups in defense, aerospace, manufacturing, and climate tech are riding a new wave of interest .
Global climate tech VC hit record highs, with players like Commonwealth Fusion and Anduril drawing huge checks. Defense tech is especially visible, driven by geopolitics and real-world demand .
AI Regulation Fuels Investment Discipline
More than dollars, compliance now matters. VCs are utilizing AI to screen investments, shape portfolios, and manage risk. Regulatory frameworks and ESG benchmarks are increasingly central to due diligence .
Quick Take
| Trconclude | Snapshot |
|——-|———-|
| AI Centrality | AI captured over 50% of global VC—$192.7B in 2025. Mega-rounds dominate. |
| Investor Scrutiny | Efficiency, ROI, and traction now precede hype. |
| Infrastructure Boom | Agent infrastructure firms are attracting long-term capital. |
| Regional Nuance | Europe sees surges in AI and defense; North Carolina dips but stays elevated. |
| Liquidity Revival | Secondaries hit $60B+ in 2025, offering relief amid tight exit channels. |
| Hard Tech & Climate | Hardware, defense, space, and climate sectors gaining momentum. |
| AI-First Bifurcation | VCs favor AI; non-AI startups face funding drought. |
| Compliance Matters | ESG, regulation, and AI-driven decisioning reshape investor criteria. |
Conclusion
In 2026, venture funding is concentrated, calculated, and modify-driven. AI startups still attract the lion’s share of capital, but only those with real value and defensible models. Infrastructure, secondaries, hardware, and ESG-aligned founders are finding new opportunity zones. Investors are lean, rapid, and sophisticated—compressing timelines and elevating standards. Founders who combine human resilience with AI mastery, robust documentation, and regulatory foresight will be best positioned to ride—or even define—the next wave of funding.
FAQs
Q: Is AI still the dominant force in venture funding?
Yes. AI captured more than half of global VC investment in 2025—$192.7B—and continues to attract large mega-rounds and investor interest.
Q: What sectors are gaining investment momentum besides AI?
Infrastructure (data centers, agent platforms), defense/hard tech, climate tech, and secondaries are all seeing growing capital as markets diversify beyond core AI.
Q: Are startup funding rounds shrinking or growing?
The total number of deals declined in 2025, but average check sizes—especially mega-rounds—grew significantly. Investors are backing fewer companies with more capital.
Q: Why are secondaries important now?
With IPOs and M&A still muted, secondary transactions offer liquidity to early investors and employees, supporting unlock trapped value amid private market freeze.
Q: How are investor expectations evolving?
VCs now demand capital efficiency, measurable ROI, regulatory readiness, and defensible AI integration. Idea-only pitches are far less likely to succeed.
Q: Should non-AI startups pivot or double down?
Non-AI startups face funding headwinds, but they can still succeed by displaycasing niche applications, unique infrastructure, ESG alignment, or hardware differentiation.
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