Global venture capital investment more than doubled to a record $330.9 billion in the first quarter of 2026,from $128.6 billion in the fourth quarter of 2025, fueled by an extraordinary concentration of capital in large megadeals, according to the latest edition of Venture Pulse from KPMG Private Enterprise.
During Q1’26, ten funding rounds attracted $2 billion+ in VC investment, contributing more than $206 billion to the global total. AI-focused companies attracted the majority of these funding rounds, including seven based in the US.
Deal value rose across all major regions during Q1’26. In the Americas, VC investment rose from $78.6 billion in Q4’25 to a record $270.1 billion quarter-over-quarter; the US alone accounted for $267.2 billion of the Americas’ Q1’26 total, more than double its previous record high. In Europe, VC investment rose to a 14-quarter high of $25.7 billion, while Asia saw funding climb to a 12-quarter high of $31.8 billion.
“Q1’26 marked a very strong start to the year for VC investment across all regions of the world, with megadeals occurring on a scale far beyond anything we’ve seen before. While the Americas – entirely due to the US – reached an extraordinary record high, both Europe and Asia also saw very healthy investment. AI remained the dominant investment theme, with interest pouring not only into large language model focused companies, but increasingly into startups focused on the application of AI across industries and verticals,” said Conor Moore, Global Head of KPMG Private Enterprise, KPMG International.
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.
“AI is the megatrend emerging in the VC space and India is still at a nascent stage with respect to AI both in terms of adoption and service delivery. AI first businesses are going to see a huge demand in the foreseeable future and is expected to drive the growth trajectory of VC investments in India,” said Nitish Poddar, Partner and National Leader, Private Equity, KPMG in India.
AI continues to attract exceptional levels of VC investment globally
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 Americas dominated by US-based AI ecosystem investments
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.
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.
VC investment in Europe holds strong due to record megadeals despite late-quarter slowdown
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.
Asia continues to see VC investment recover, driven by diverse megadeals across key innovation sectors
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. The geographic spread of these large deals highlights the growing breadth and maturity of the VC markets across the region.
Global exit value surges on M&A deals, while IPO activity remains mixed
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. 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.
Geopolitical tensions key area to watch headed into Q2’26
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.
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