In the first quarter of 2026, the Venture Monitor First Look report revealed that $267.2 billion, thanks to AI deals, according to an initial report from Pitchbook and the National Venture Capital Association (NVCA).
Dealmaking
Kyle Stanford, director of U.S. venture research at Pitchbook, said in the report that $267.2 billion in deal value was closed in the U.S. during the quarter.
That was more than double the prior record quarter. That figure is extremely concentrated, however, since $122 billion was closed by OpenAI, $30 billion by Anthropic, $20 billion by xAI, and $16 billion by Waymo.
Databricks’ $7 billion financing rounded out the five largest deals, and together those deals represented about 73% of all deal value for the quarter. Outside of those deals, the $72.2 billion investment remained a strong quarter, which was also shown by the estimated 4,595 deals closed during the quarter. The $72.2 billion in deal value would be consistent with the past several quarters, Stanford said.
AI continues to be the focal point of VC, and the continued growth is more of a signal that AI is no longer a nice to have for companies, but a necessity to receive interest from tech investors. 88.8% of deal value went to AI companies during the quarter. Those companies span the breadth of sectors and verticals, from healthcare and life sciences, to enterprise tech and consumer products, Stanford said.
Exits
Q1 2026 produced $347.3 billion in exit value, the highest quarterly total on record and already the second-largest annual figure in history, trailing only 2021.
But a single transaction tells most of that story: SpaceX’s $250 billion acquisition of xAI, a consolidation of two Elon Musk companies, accounts for 72% of the quarter’s total. Exclude it, and the underlying exit environment comes in at a more modest $97.3 billion, which is still the highest quarter since Q4 2021, Stanford said.
AI-centered M&A activity drove most of the quarter’s exit value. SpaceX aside, Google’s $32 billion acquisition of Wiz is the largest corporate acquisition of a VC-backed company on record. Marvell Technology acquired AI connectivity startup Celestial AI for $6 billion, and Palo Alto Networks acquired observability platform Chronosphere for $3.4 billion, Stanford said.
The IPO market continues its slow and selective recovery. Q1’s 15 VC-backed listings put 2026 on pace for 60 total, above 2025’s 50 but well short of what’s needed to clear the years-long backlog.
Potential IPOs from SpaceX, OpenAI, and Anthropic — each of which would rank among the largest in history — could generate more exit value than all VC-backed IPOs combined since 2000.
A strong reception would likely catalyze a broader wave of listings and inject long-awaited liquidity into a market that has been largely frozen since 2022. But the risk runs both ways: if these mega-IPOs crowd out underwriting capacity and institutional capital, the broader IPO window could be pushed into 2027, extending the liquidity drought for the rest of the market, Stanford said.
Fundraising
VC fundraising is recovering on paper, but the headline figure overstates the breadth of that recovery. Andreessen Horowitz and Thrive Capital alone raised $25 billion across seven funds in Q1 2026, accounting for 52.8% of the quarter’s total, underscoring that capital formation remains heavily concentrated among a small number of large managers, Stanford said.
LP capital continues to flow disproportionately to established managers with proven track records, widening the gap between the top of the market and the rest. Institutional LPs are navigating a challenging backdrop — shifting regulatory frameworks, heightened geopolitical tensions, and prevailing overallocation to the asset class — and are increasingly defaulting to known platforms as a result, Stanford said.
Not all emerging managers currently raising are new to the industry. Many are spinouts from pedigreed funds or seasoned industry professionals with deep sector expertise and established networks. In the current environment, a differentiated strategy and demonstrable manager-market fit have become prerequisites for accessing LP capital, not merely competitive advantages.
European deal activity
European VC deal activity commenced the year in a record-breaking fashion, buoyed by several large rounds involving AI startups. The five largest deals accounted for roughly 25% of European deal value, said Nalin Patel, Pitchbook’s director of EMEA private capital research.
The proportion of capital invested in AI-related businesses relative to the overall ecosystem also grew, pointing to an increasing reliance on AI-driven dealmaking. 61.3% of deal value in Europe, and 38.9% of deal count was completed into AI startups.
Q1 2026 European VC exit activity had a steady start, with value and volume reaching figures comparable to recent quarters as volatility persists. At €16.0 billion, the quarter lacked the large exits seen in the US, but did see several billion-euro exits get completed.
The VC fundraising landscape in Q1 2026 remained subdued, with figures relatively consistent with a weak showing in 2025 amid the tough capital-raising environment. Just €3.5 billion was closed across 37 funds, both pacing for near decade lows.
APAC venture data first look
Asia VC deal activity in Q1 2026 appears on track with recent quarterly run rates, said Ansel Tan, director of APAC private capital at Pitchbook.
The quarterly pattern has roughly had 3,000 to 3,500 deals per quarter since 2023 (when estimated data lag is taken into account), suggesting stabilization after the post-2021 correction, though the region has not recaptured the volume highs of the 2020–2021 cycle and shows no near-term signs of doing so.
AI & ML accounts for an increasingly structurally higher share of Asia deal count than at any point pre-2023. What began as a cyclical rotation into AI is increasingly looking like a permanent reallocation of deal flow away from consumer internet and fintech verticals that dominated the prior cycle.
Exit activity remains the clearest constraint on the Asia VC ecosystem. Both deal count and value have been flat to down since 2023 with no visible inflection in Q1 2026, compressing distributions to LPs and creating a reinforcing drag on new fund commitments, particularly acute for managers whose vintages are concentrated in the 2018–2021 period. With just $18.7 billion in exit value generated during the quarter, the year is on pace for exit values similar to the past couple years.
VC fundraising closed 2025 at 463 funds and roughly $42.0 billion raised, and early Q1 2026 data shows just 87 funds with $6.2 billion, consistent with a market where LP appetite for Asia-focused vehicles remains structurally constrained rather than cyclically depressed. The sustained gap between still-active deal deployment and compressed new fund formation suggests the industry is increasingly running on legacy dry powder.