The VC funding winter is officially over
Q1 2026 numbers are in and they tell a clear story: capital is flowing again, but the bar is higher.
Venture capital deal volume in Q1 2026 reached $78B globally, up 42% from Q1 2025 and nearly matching the 2021 peak. The funding winter that began in late 2022 appears to be definitively over.
Where the money is going
AI infrastructure and applications account for 38% of all funding, up from 22% a year ago. Enterprise SaaS is rebounding. Climate tech is steady. Consumer tech remains depressed.
The new normal
Valuations are higher than during the trough but still below 2021 peaks. Investors are doing more due diligence and focusing on profitability metrics. The era of growth-at-all-costs is not coming back.
The startups that weathered the winter by cutting burn and focusing on unit economics are now in the strongest position. They enter this new cycle lean, profitable, and ready to scale.
Startup Correspondent
Startup and venture capital correspondent. Tracks funding rounds, founder stories, and market shifts across the global tech ecosystem. Former analyst at a16z.
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