Global Venture Capital Market

Q1 2026 broke every venture capital record in history. $300 billion deployed globally. $242 billion of that 80% went to AI. But the real story isn’t the number. It’s the concentration. OpenAI raised $122 billion. Anthropic $30 billion. xAI $20 billion. Waymo $16 billion. Four companies. $188 billion. 65% of all global venture investment in a single quarter. SoftBank borrowed $40 billion just to fund its position. S&P downgraded their credit outlook to negative. The world’s largest technology investor is leveraging its balance sheet to the hilt for a company that has never turned a profit. This is not venture capital anymore. This is sovereign-scale capital allocation disguised as startup investing. And the fractures are showing everywhere: → U.S. companies captured 83% of global VC. A year ago it was 71%. → Horizontal SaaS down 25%. Vertical software down 34%. → Seed deals dropped 30% fewer founders funded, larger bets on fewer winners. → No foundational AI company is public. The exit math doesn’t work yet. → The physical infrastructure: power, data centers, grid capacity is the real bottleneck, not compute. This chart is the Great Fragmentation in a single image. The Gulf states are co-investing. Europe just celebrated a $1 billion seed round. But $1 billion is a rounding error against $122 billion. The gap between participating in AI and owning AI capability is widening every quarter. The question isn’t whether AI will reshape the global economy. That’s settled. The question is: who owns the infrastructure when it does?

Venture capital is being rebuilt. From the outside in. I've spent the last year watching a transformation happen in real time. 850+ emerging funds. Managers from 6 continents. The most comprehensive dataset on new fund managers that exists. Here's what the data says about where venture capital is going: The gatekeepers are losing power. Half of new GPs in 2025 had no prior VC experience. They came from biotech labs, AI startups, defense, climate, healthcare. They brought something more valuable than a rolodex: they brought domain expertise that institutional VCs can't replicate. Funds are getting smaller. And that's a feature, not a bug. Smaller funds mean tighter theses, faster deployment, and more alignment with the companies they back. The average fund size is now $9.4MM. The best-performing bracket is under $5MM. LPs are changing. The typical emerging fund LP is not a pension fund. It's an accredited individual writing a $100K check. Sometimes $50K. Sometimes $25K. Assembled together, these Micro LPs represent billions in untapped capital that legacy research firms can't even see. The managers are younger, more diverse, and more global than at any point in the industry's history. Women participated in 31% of fund leadership in 2024. GPs under 40 are the fastest-growing demographic. And they're executing with more discipline than their more experienced peers. This isn't a trend. It's a structural shift. The next great venture capital firms won't come from Sand Hill Road. They'll come from a 32-year-old climate scientist in Berlin. A former CTO in Nairobi. A healthcare operator in São Paulo. A defense engineer in Tel Aviv. They're already here. They're already raising. And our data shows they're already winning. The full 2025 Year End Report is in the comments. If you want to understand where this industry is going, start there.

The Economist published a piece on 'zombie' unicorns, drawing on data from my Stanford research: https://lnkd.in/gfbViENb    By May 2026, 332 of the 1,900 unicorns in my database had raised money at post-money valuations at or below their peak. Almost 400 raised their last round more than three years ago. As investors begin demanding results, Pitchbook expects net cuts in post-money valuations of between $500bn and $1trn as firms reprice, find a buyer, or wind down.     But the more important story is what this reveals about venture capital more broadly. The VC funding cycle depends on distributions flowing back to LPs so capital can be reinvested in the next generation of start-ups. That cycle is under serious strain. Among funds launched in 2021, three-quarters had returned less than a quarter of investors' money by their fourth anniversary — roughly half the rate of earlier vintages. Since 2022, US venture funds have drawn a net $196.9 billion more from investors than they have returned.     The result is a distribution drought that is slowing the innovation funding engine and concentrating resources at the top: the 10 largest VC funds now capture nearly 43% of all capital raised.     Our World Economic Forum report, co-authored with the Stanford GSB Venture Capital Initiative, examines these structural pressures in depth and sets out what needs to change: improving secondary-market infrastructure, mobilising institutional capital, reducing regulatory friction, and building the talent ecosystems that allow start-ups to scale into global companies.     P.S. A big thank you to Shera Avi-Yonah for this interview — and for adding 'unicorpses' to my vocabulary after 20 years of researching this space. I thought I'd seen it all!

Entrepreneurship on a cliff’s edge The US venture market is poised on a cliff’s edge. If economic conditions worsen, a major correction in venture capital will follow. Emergency action will be required by founders in order to enhance the probability of survival in a liquidity drought.   There are many troubling signs: First, more than 50,000 VC-backed companies are operating in the United States, twice as many as existed in 2016. There are too many firms chasing a fixed commercial opportunity set. These companies now face a shortage in the private capital supply.   Second, “rescue rounds”, fundings by existing investors to prolong the lifespan of portfolio companies that were expected to have had a liquidity event prior to the liquidity squeeze, stand at a ten-year high. Much of this financing has been at dilutive valuations. The growing volume of layoffs and borrowings by ventures are further signs of this strain. Pitchbook’s Dealmaking Indicator describes this market as the most investor friendly in a decade, which will pressure valuations, further diluting founders. Third, while there has been a recovery in the public markets the IPO market remains stagnant with dire implications for venture capital fund returns. Public listings represent more than eighty percent of venture capital fund investment performance. Fourth, the overhang of approximately 700 unicorns in venture portfolios threatens intermediate term fund returns and capital supply. Without explosive growth in the volume of IPOs of venture capital-backed firms, these portfolio companies will create massive, widespread markdowns in portfolio valuations and estimated investment returns. Fifth, nontraditional investors that have largely driven unicorn valuations have retrenched. These funding sources, from the hedge fund, equity mutual fund and sovereign wealth fund world, have been some of the first investors to experience drastic portfolio value write downs as a result of providing the final private round based upon the dimming prospects for a near-term, attractively valued initial public offering. Their struggle to raise new funds at the targeted size is a further consequence of the liquidity freeze. The current environment and looming headwinds dictate that founders operate their ventures in survival mode, reducing burn rates and focusing on near term financially attractive opportunities. These tactics can drive a firm to the point of financial viability, where internally generated cash flow can fund the survival, if not the growth, of their companies. Financial viability and the prospects of near-term achievement of financial viability will become a critical factor in a venture’s attractiveness to the dwindling supply of private risk capital providers operating on the cliff’s edge and the ground below.  

Venture capital’s growth story is real - but so is its concentration. The result? 𝐌𝐨𝐫𝐞 𝐦𝐨𝐧𝐞𝐲 𝐭𝐡𝐚𝐧 𝐞𝐯𝐞𝐫, 𝐢𝐧 𝐟𝐞𝐰𝐞𝐫 𝐡𝐚𝐧𝐝𝐬 𝐭𝐡𝐚𝐧 𝐞𝐯𝐞𝐫. Since 1995, the venture asset class has matured from a niche corner of private markets into an institutionalized segment of global capital. But when you zoom out, the real story isn’t how much money has flowed into venture - 𝐢𝐭’𝐬 𝐰𝐡𝐚𝐭 𝐤𝐢𝐧𝐝𝐬 𝐨𝐟 𝐟𝐮𝐧𝐝𝐬 𝐢𝐭’𝐬 𝐟𝐥𝐨𝐰𝐢𝐧𝐠 𝐢𝐧𝐭𝐨. I mapped every closed North American venture capital fund from 1995 to 2024, segmented by fund size. The top chart shows total fundraising; the bottom shows the composition of that capital - what % came from small (< $250M) versus large (+1B) mega-funds. The results show a massive structural reallocation: in 1995, 𝟔𝟓% of all VC capital came from sub-$250M funds; today it’s just 𝟏𝟑%. Meanwhile, funds over $1B now account for 𝟔𝟒% - by far the highest share on record. 🔍 𝐊𝐞𝐲 𝐈𝐧𝐬𝐢𝐠𝐡𝐭𝐬 1️⃣ 𝐍𝐨𝐭 𝐚𝐥𝐥 𝐝𝐫𝐲 𝐩𝐨𝐰𝐝𝐞𝐫 𝐢𝐬 𝐜𝐫𝐞𝐚𝐭𝐞𝐝 𝐞𝐪𝐮𝐚𝐥. Headline fundraising numbers obscure the fact that much of today’s “available” capital is concentrated in a small number of multi-stage funds. That capital behaves differently - price matters less, speed matters more, and experimentation takes a back seat to scale. 2️⃣ 𝐒𝐜𝐚𝐥𝐞 𝐢𝐬 𝐫𝐞𝐬𝐡𝐚𝐩𝐢𝐧𝐠 𝐢𝐧𝐜𝐞𝐧𝐭𝐢𝐯𝐞𝐬. The math breaks when funds get too big - returns compress, ownership falls, and even outliers at times struggle to move the needle at the fund level. Yet the pressure to deploy only grows. For GPs, fund size is your strategy - staying disciplined on scale often preserves flexibility, alignment, and return potential. 3️⃣ 𝐓𝐡𝐞 𝐦𝐢𝐝𝐝𝐥𝐞 𝐢𝐬 𝐬𝐡𝐫𝐢𝐧𝐤𝐢𝐧𝐠. The $250 - 999M fund sits in an increasingly tight spot - too small to match the scale and pricing power of multi-stage platforms, yet too large to lean fully into early-stage risk. It’s a segment being structurally squeezed from both directions. 4️⃣ 𝐂𝐨𝐧𝐜𝐞𝐧𝐭𝐫𝐚𝐭𝐢𝐨𝐧 𝐜𝐡𝐚𝐧𝐠𝐞𝐬 𝐛𝐞𝐡𝐚𝐯𝐢𝐨𝐮𝐫. With so few firms now controlling so much capital, venture risks becoming increasingly consensus-driven - large funds chasing the same companies, at the same stages, with the same theses. Capital scale brings efficiency, but it also erodes differentiation. Venture’s growth story has always been told through capital raised. But the composition of that capital is the real signal. The next decade will test whether scale delivers better outcomes - or whether the industry’s edge was always in its smaller, scrappier beginnings. 𝐒𝐢𝐠𝐧𝐚𝐥𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐍𝐨𝐢𝐬𝐞 🤓

Europe’s venture market is sending a warning signal… The number of VC funds actually closing in Europe has collapsed from 576 in 2022 to just 37 so far this year. At the same time: - Not a single European megafund surpassed €500M in 2025 - The US increased its share of global venture capital from 47% to 62% (!) - Europe stands at just 15% This is not only a venture capital issue. It is a competitiveness issue. A sovereignty issue. I joined Business Sweden Business Beyond Borders alongside Camilla Mellander (Ministry of Foreign Affairs), Maria Rosendahl (Teknikföretagen), and Therese Lindé (Elekta) to discuss how Swedish business and politics can better collaborate in an increasingly fragmented world.

In that discussion, I raised the shift reflected in the numbers above. What we’re now seeing in venture will soon hit the startup ecosystem. Fewer funds means fewer companies started, slower scaling, and tighter access to follow-on capital. If this continues, Europe risks becoming a net exporter of its most promising companies as they seek growth capital elsewhere, shifting both value creation and strategic control out of the region. Europe is already mobilizing around defense and security. The next step is expanding how we define resilience and strategic capability: food systems, cybersecurity, AI, energy, critical materials like cement and steel, advanced manufacturing, and deep tech infrastructure. This is where the next generation of globally important companies can rise. We also need stronger collaboration between industry, capital, and universities. Silicon Valley did not happen by accident, it was built through long-term alignment between research, entrepreneurship, and capital. Europe has the talent but we need the structures and capital to match it.
 What do you think we must do right now to prevent this from accelerating further?

State of #fintech at the end of Q3’2024 by CB Insights Global Funding Trends: 🔵 Fintech #funding fell to $7.3B in Q3’24, a 25% quarter-over-quarter (QoQ) drop. However, the decline adjusts to 13% when excluding large deals from the prior quarter (e.g., Stripe, AlphaSense) 🔵 The average deal size in 2024 remains steady at $12.7M, reflecting a focus on fewer, higher-value #investments despite a 16% drop in total deal volume, reaching the lowest level since 2017. Geographic Insights: 🟠 Emerging Markets Lead Early-Stage Deals: 52% of early-stage deals occurred outside traditional hubs (e.g., US, UK), favoring regions like India, France, and Kenya Sector-Specific Trends: 🟢 Wealth Tech: Notable funding increase with a focus on solutions targeting niche demographics, such as medical professionals. #Wealthtech saw a 67% increase in funding QoQ, driven by significant deals such as Human Interest ($242M) and Earned Wealth ($200M) 🟢 Digital Lending: Continued activity in Asia and the US, with standout deals like DMI Finance ($334M) and MNT-Halan ($158M) 🟢 Payments and Insurtech: Both sectors experienced declines but retained pockets of high-value activity, particularly in #insurance #innovation Investor and Exit Activity: 🟣 #VentureCapital Shift: VC investments accounted for 29% of deals, highlighting a cautious but persistent interest in fintech 🟣 Exits: M&A dominated the exit landscape, with fewer IPOs or SPACs, indicating a shift toward #consolidation over public market enthusiasm. So what does all this mean for the near future? ♻️ We are entering a consolidation phase: With deal volumes at a historic low, the industry is undergoing a consolidation phase. Expect M&A to drive market realignments, especially in crowded subsectors like #payments and lending. ♻️ Increased focus on Emerging Markets: The shift toward less-crowded geographies reflects the untapped potential in markets like #Africa and parts of Asia. Companies targeting these regions may enjoy less competition and high growth prospects. ♻️ Selective Investment Persists: Investors are prioritizing fewer, higher-quality deals. #Startups will face increased pressure to demonstrate solid unit economics and scalability before securing funding. ♻️ Some Sectoral Bright Spots: The wealth tech boom signals a growing appetite for personalized financial management solutions. #Insurtech and #lending (especially in the small business) innovation remain attractive as they address core pain points with digital solutions. ♻️ Challenges for #Unicorns: The slowed rate of unicorn births underscores a recalibration of valuations. Companies aspiring to cross this threshold will likely need to showcase strong #profitability or growth metrics. Also, some of the existing unicorns 🦄 will lose their wings 🪽 if they test the market

𝗧𝗵𝗲 𝗵𝗮𝗿𝗱 𝘁𝗿𝘂𝘁𝗵 𝗮𝗯𝗼𝘂𝘁 𝘀𝘁𝗮𝗿𝘁𝘂𝗽 𝗳𝘂𝗻𝗱𝗶𝗻𝗴 𝗶𝗻 𝟮𝟬𝟮𝟱... Global startup funding hit $𝟭𝟵𝗕 𝗶𝗻 𝗙𝗲𝗯𝗿𝘂𝗮𝗿𝘆—𝗼𝗻𝗲 𝗼𝗳 𝘁𝗵𝗲 𝘀𝗹𝗼𝘄𝗲𝘀𝘁 𝗺𝗼𝗻𝘁𝗵𝘀 𝘄𝗲'𝘃𝗲 𝘀𝗲𝗲𝗻 𝗶𝗻 𝘆𝗲𝗮𝗿𝘀. The 𝗨.𝗦. 𝗴𝗿𝗮𝗯𝗯𝗲𝗱 𝗺𝗼𝘀𝘁 𝗼𝗳 𝗶𝘁 𝗮𝘁 $𝟭𝟬𝗕, but here's what's really happening... AI and healthcare? They're still getting love from investors. Gaming, consumer startups, and women-led businesses? They're feeling the chill. 𝗟𝗼𝗼𝗸 𝗮𝘁 𝗦𝗼𝘂𝘁𝗵𝗲𝗮𝘀𝘁 𝗔𝘀𝗶𝗮—𝘄𝗼𝗺𝗲𝗻-𝗹𝗲𝗱 𝘁𝗲𝗰𝗵 𝘀𝘁𝗮𝗿𝘁𝘂𝗽𝘀 𝗿𝗮𝗶𝘀𝗲𝗱 𝗷𝘂𝘀𝘁 $𝟭𝟵𝟴𝗠 𝗶𝗻 𝟮𝟬𝟮𝟰. 𝗧𝗵𝗮𝘁'𝘀 𝗮 𝟲𝟱% 𝗱𝗿𝗼𝗽 𝗳𝗿𝗼𝗺 𝗹𝗮𝘀𝘁 𝘆𝗲𝗮𝗿. But here's what nobody's talking about... The rules have changed. Investors aren't just throwing money at good ideas anymore. 𝗧𝗵𝗲𝘆 𝘄𝗮𝗻𝘁: - 𝗥𝗲𝗮𝗹 𝗿𝗲𝘃𝗲𝗻𝘂𝗲 - 𝗖𝗹𝗲𝗮𝗿 𝘁𝗿𝗮𝗰𝘁𝗶𝗼𝗻 - 𝗦𝘁𝗿𝗼𝗻𝗴 𝗹𝗲𝗮𝗱𝗲𝗿𝘀𝗵𝗶𝗽 - 𝗣𝗮𝘁𝗵 𝘁𝗼 𝗽𝗿𝗼𝗳𝗶𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆 The "growth at all costs" era? It's fading away. 𝗦𝗺𝗮𝗿𝘁 𝗳𝗼𝘂𝗻𝗱𝗲𝗿𝘀 𝗮𝗿𝗲: - 𝗘𝘅𝗽𝗹𝗼𝗿𝗶𝗻𝗴 𝗯𝗼𝗼𝘁𝘀𝘁𝗿𝗮𝗽𝗽𝗶𝗻𝗴 - 𝗟𝗼𝗼𝗸𝗶𝗻𝗴 𝗮𝘁 𝗮𝗹𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝘃𝗲 𝗳𝘂𝗻𝗱𝗶𝗻𝗴 - 𝗕𝘂𝗶𝗹𝗱𝗶𝗻𝗴 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿 𝗹𝗼𝘆𝗮𝗹𝘁𝘆 - 𝗙𝗼𝗰𝘂𝘀𝗶𝗻𝗴 𝗼𝗻 𝗿𝗲𝗽𝗲𝗮𝘁 𝗿𝗲𝘃𝗲𝗻𝘂𝗲 Some VCs are whispering about a rebound later this year... But remember this—the startups that adapt will survive. The rest? They might not make it through this funding winter. What's your view? Are we headed for darker days, or do you see light at the end of the tunnel? Share your thoughts below... #StartupFunding #VentureCapital #BusinessGrowth

📉 VC Funds Brace for Market Shakeout as 2025 Approaches The venture capital industry is navigating turbulent waters as we head into 2025. Funds are taking longer to close rounds, and many Limited Partners (LPs) face liquidity constraints stemming from prior commitments to other asset classes like private equity, real estate, and infrastructure. This has led to a slow-moving fundraising environment, forcing VC firms to rethink how they operate. ➡️Extended Fundraising Timelines Fundraising cycles that once took six to nine months are now stretching well beyond a year. Data from PitchBook and CB Insights shows that total VC fundraising in 2024 is on track to hit its lowest level since 2017, reflecting a cautious investment landscape. Many LPs have hit their allocation limits, squeezed by reduced distributions from previous funds and declining public market portfolios. ➡️VC Firms Are Adapting To survive—and thrive—VC firms are making strategic adjustments: Portfolio Streamlining: Many firms are cutting underperforming startups from their portfolios to focus on top-performing companies that show real growth potential. ➡️Business Model Adjustments Some funds are pivoting their investment strategies, moving from traditional early-stage deals to growth equity, secondaries, or even structured financings. Firms are adjusting their fundraising schedules, spreading out capital raises over longer periods to ease LP pressure. ➡️Doubling Down Instead of chasing new deals, VC firms are deploying follow-on capital into their most promising startups, hoping to maximize returns from companies already showing strong fundamentals. 2025: The Final Market Shakeout? 🔎As we near 2025, the bottom of the venture market correction may be in sight. Analysts from Crunchbase and J.P. Morgan suggest that we’re entering the “final shakeout” phase—a critical inflection point where underperforming, cash-strapped start-up's will likely shut down or be acquired at distressed valuations. This will clear the decks for the next wave of high-potential startups. With weaker players exiting the ecosystem, VC balance sheets will become leaner, more focused, and better positioned for growth when the next upcycle begins. ✅Survival of the Fittest The coming year could be one of the most pivotal in recent VC history. Funds that adapt quickly, maintain LP trust, and invest with precision will likely emerge stronger. As the market resets, the best-managed funds with disciplined strategies and resilient portfolios will be well-positioned to dominate when conditions improve. Let me know if you’d like deeper insights or data-driven expansions! 🚀 #venturecapital2024 #ventureinsights #founders #innovation #startups #newable

Is the venture capital model we’ve relied on for over 50 years reaching its limits? Recent trends suggest it might be facing not just a cyclical downturn but a fundamental transformation. In my latest analysis, I present a counter-perspective to Scott Hartley's contention that what we’re seeing is just a “down market” - a mere dip VCs should buy into. There is something much more profound happening. Here’s why: 🧩 IPO Evaporation: The pathway to public markets has all but vanished, with fewer companies going public today than at any point in the last few decades. 💰 Ballooning Capital Needs: Today’s tech giants require far more capital than traditional VC fund sizes can provide. This mismatch forces funds to scale up, creating pressures that venture capital may not be able to handle long-term. 🌐 Global Competition: The US no longer has a monopoly on innovation. As China and Europe pour resources into tech infrastructure and sustainability, the competition is fiercer than ever. 📉 Misaligned Incentives: With large firms generating more revenue from fees than successful exits, the industry is drifting away from its mission to fund transformative technologies. This isn’t just an adjustment—it’s a transformation. Traditional venture capital faces existential challenges, but exciting new models are emerging from its decline: ✨ Venture Studios: A revolutionary approach, accelerating startups from ideation through to growth with operational expertise, rapid scaling, and more sustainable business models. 🔄 Revenue-Based Financing: Funding mechanisms that align interests across all stakeholders, supporting patient capital deployment without creating pressures for unicorn exits. The extinction of traditional venture capital doesn’t spell the end of innovation funding. In fact, it opens the door to models better suited for our complex, global innovation landscape. 👉 Read the full analysis in the lastest edition of Venture Capital 2.0 where I delve into how these changes are reshaping the future of innovation funding and why the next wave of technology development requires new approaches. Let’s explore what comes next! #VentureCapital #InnovationFunding #TechTransformation #VentureStudios #FutureOfVC #startups