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🚀 | TL;DR
Venture funding is breaking records again.
Global startups raised roughly $510B in the first half of 2026, already more than the $440B raised during all of 2025. U.S. venture investment also crossed $400B through June, according to PitchBook and NVCA.
The headline looks like a full-blown VC comeback.
The underlying market is way stranger:
OpenAI and Anthropic alone accounted for $217B, or 43%, of global startup funding in H1.
In Q2, mega-rounds captured 81% of all venture funding, while global deal count fell to its lowest level in more than a decade.
Carta's data shows seed funding fell roughly 42% YoY in H1, while Series C+ funding jumped 33%.
Even at pre-seed, roughly the same amount of capital is being invested across 22% fewer financing instruments.
Secondary markets have recovered sharply at the median, but the bottom of the market remains heavily discounted.
VC fund marks are improving faster than cash distributions. Even among 2017 and 2018 vintage funds, fewer than 20% have reached 1.0x DPI.
Venture is getting healthier.
It's also becoming much more concentrated.
What looks like one booming market from 30,000 feet increasingly looks like several completely different markets once you zoom in.
📈 | The Biggest Venture Market Ever
Global startup funding reached approximately $510B during H1 2026, according to Crunchbase. That's already above the roughly $440B invested during the entirety of 2025.
PitchBook and NVCA tell a similar story in the U.S. Their Q2 Venture Monitor says American startups raised more than $400B through June, which surpassed every previous full-year investment total on record.
For context, 2021 was supposed to be the absurd year.
That was when zero interest rates, crossover funds, Tiger Global, SoftBank, SPACs, and seemingly unlimited LP liquidity pushed startup valuations into territory the market spent the next several years unwinding.
2026 has already blown through many of those funding records.
There's one problem.
A huge amount of that money is landing in very few places.
🤖 | AI Is Eating the Funding Data
Crunchbase estimates AI companies raised $242B globally in Q1 alone, representing roughly 80% of all startup funding during the quarter.
Four companies accounted for most of it:
OpenAI
Anthropic
xAI
Waymo
Together, they raised approximately $188B in Q1.
That's about 65% of every venture dollar invested globally during the quarter.
Strip those four rounds out and Q1 global funding falls from roughly:
$300B → $112B
$112B is still a strong quarter.
It tells a completely different story than $300B.
The concentration carried into Q2. CB Insights found that funding again exceeded $200B globally, while 263 mega-rounds captured 81% of all capital. At the same time, deal count hit its lowest level in more than a decade.
Within AI itself, the concentration gets even sharper.
CB Insights estimates 89% of all AI funding in Q2 went into just 142 mega-rounds.
That's what makes today's venture numbers so easy to misread.
More money is moving through the ecosystem.
A shrinking group of companies is capturing a growing percentage of it.
🔬 | Look Underneath the Mega-Rounds
Carta gives us another useful view because its dataset is based on financings recorded across startup cap tables rather than simply aggregating the biggest announced rounds.
Its H1 data shows total funding increasing modestly:
H1 2025: $56.5B
H1 2026: $58.7B
So far, so good.
Then you split it by stage.
Seed funding:
$6.5B → $3.8B
That's a decline of roughly 42%.
Series B:
$13.5B → $10.4B
Series A:
Roughly flat at $12.7B
Series C+:
$23.9B → $31.8B
That's a roughly 33% increase.
The shape of the market changes once the stages are separated.
Later-stage winners are absorbing more capital.
Seed companies are competing for a smaller pool.
Carta described the trend as capital concentrating at the top, which matches what we're seeing across broader venture datasets.
🌱 | Even Pre-Seed Is Concentrating
You'd expect the very bottom of the venture market to behave differently.
It doesn't.
U.S. startups on Carta raised approximately $3.19B through more than 11,500 pre-seed SAFEs and convertible notes in Q2 2026.
One year earlier, they raised almost exactly the same amount:
$3.22B
But that money was spread across 14,825 instruments.
Capital barely changed.
The number of investments fell roughly 22%.
The average instrument got larger as investors concentrated more money into fewer companies.
Prices are moving with it.
Carta says 93% of pre-seed rounds are now SAFEs, and valuation caps continue to climb.
At seed, the very top of the market has gone vertical.
The 95th-percentile seed valuation reached $200.4M in Q2 2026.
A year earlier it was $72.2M.
That's a 177% increase in twelve months.
Think about how strange that combination is.
Total seed capital can fall while the most competitive seed companies command $100M to $200M valuations.
That's the market we're in.
🧊 | Meanwhile, the Old Venture Market Is Still Working Through 2021
There's another side of the story.
Thousands of startups raised capital during the 2020 to 2022 boom at valuations based on a very different cost of capital.
A lot of them never raised again.
Forge analyzed companies trading on its secondary marketplace at the end of 2024 and found that 36% had last raised primary capital in 2021.
Those companies traded at a median 59% discount to their last funding round.
Companies whose last rounds were in 2022 traded at a median 51% discount.
That data is older than today's funding boom, and the secondary market has recovered significantly since then.
Forge's latest August 2026 update shows the median secondary transaction was only 7% below the last primary round in July, after reaching roughly par in June.
That's meaningful improvement.
The distribution is where things get interesting.
In July:
Median trade: -7%
25th percentile: -34%
10th percentile: -57%
So the middle of the private market has recovered.
The weakest quarter of the market still looks very different.
🏷️ | A $1B Valuation Isn't a Price
Private-company valuations can survive on paper for years.
Secondary markets make that increasingly difficult.
Take a few companies currently priced by Forge.
Starburst Data
Starburst raised a Series D in February 2022 at $5.75 per share, corresponding to a roughly $3.35B post-money valuation.
Its current Forge Price is around $0.55 per share.
That's roughly 90% below the 2022 financing price.
ConsenSys
ConsenSys raised its March 2022 Series D at $140.06 per share, at a reported post-money valuation of roughly $7.07B.
Forge currently prices the shares at approximately $24.65.
That's roughly 82% below the Series D share price.
Discord
Discord's 2021 Series I came in at $55.06 per share, corresponding to a $15B valuation.
Its current Forge Price is approximately $36.79, about 33% below that round price.
Then look at the other end of the market.
Databricks
Databricks raised another $5B this month at a $190B valuation, at a reported price of $262.31 per share.
Forge currently prices it around $264.90, essentially at the new primary price.
One private market contains companies trading 80% to 90% below their boom-era rounds.
Another contains companies raising billions at new highs.
There's an important caveat here. Private secondary shares aren't identical to preferred shares issued in primary financings. Different share classes can carry different liquidation preferences, voting rights, transfer restrictions, and economics. Forge Price is also an indicative pricing measure built from marketplace activity rather than a public exchange quote.
The comparisons still tell us something important about price discovery.
The last funding round can sit frozen in time.
The market doesn't.
🚪 | Liquidity Is Improving, But the Market Is Still Concentrated
At the fund level, the same split shows up again.
Carta's Q1 2026 data shows median TVPI improving across nearly every recent VC vintage, so paper marks are recovering. Cash is lagging. For 2019 and 2020 funds, median DPI is still barely above zero, and fewer than half have distributed any capital back to LPs. Even for 2017 and 2018 vintages, fewer than 20% have reached 1.0x DPI. At the 90th percentile, DPI is still only 1.18x for 2017 and 1.12x for 2018.
Exit activity is picking up. PitchBook says Q2 saw stronger IPO and M&A activity, with SpaceX's IPO helping drive a record quarter for venture-backed exit value. But that cuts both ways. A handful of giant exits can make the market look healthier than it feels for the median fund.
That helps explain what's happening on the LP side. When distributions stay weak, LPs have less cash for new commitments, and they tend to retreat toward the biggest managers. In Q1, PitchBook reported that five venture firms captured 73% of all U.S. VC fundraising. By H1, 16 mega-funds captured nearly 70% of the $72.4B raised by 405 U.S. VC funds. Carta shows the same long-term trend: in 2025, funds with $100M+ in commitments captured 57% of all new VC capital raised on Carta, up from 31% eight years earlier.
So yes, venture is recovering. Secondary prices have improved, exits are reopening, and TVPI is moving up. But the recovery still looks highly concentrated. Capital is flowing toward a small group of elite companies on one side and a small group of established managers on the other. Everyone in the middle is still operating in a much tighter market.
⚓ | What This Means for Early-Stage Investors
The takeaway isn't to avoid AI. It's to get much stricter about entry price, ownership, and dilution.
A great company can still be a weak venture investment if you enter too high. A fund buying 5% at seed might end up owning roughly 2.5% after dilution. If that position was built at a $200M seed valuation, the company has to become enormous before it starts generating the kind of return a seed portfolio needs.
That's what this market is forcing investors to confront. The spread between company quality and investment quality is getting wider. In the hottest parts of the market, capital is abundant and pricing is aggressive. Outside those areas, investors are far more selective on burn, traction, margins, and valuation.
For early-stage funds, that makes sourcing even more important. The opportunity isn't usually where everybody already agrees. It's where the company can still become exceptional before the price fully reflects it.
🧭 | The Dhow Perspective
We're building Dhow around early-stage venture because this part of the market still rewards finding exceptional founders before everyone else reaches the same conclusion.
The numbers above reinforce how selective that has to be.
We're interested in companies capable of becoming large enough to matter at the fund level. We also care about the price paid to get there.
A $50M exit can be a great outcome for a founder and a weak venture outcome for an investor who entered at $40M.
A billion-dollar company can produce an incredible venture return if the entry price and ownership are right.
The AI boom hasn't made venture easier.
It's made the difference between company quality and investment quality harder to ignore.
✅ | Bottom Line
The private-market reset didn't end when funding started going up again.
It changed form.
The broad markdown of 2022 and 2023 has given way to a market that sorts companies much more aggressively.
At the top, AI companies are raising rounds once reserved for public companies.
In the middle, strong private companies are recovering toward prior valuations.
At the bottom, stale 2021 marks are still being repriced, sometimes brutally.
Meanwhile, fund managers are showing improving paper returns while many LPs continue waiting for meaningful cash distributions.
So when you see another headline saying venture funding is at an all-time high, look one layer deeper.
Ask how many companies raised it.
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At Dhow, we’re watching where the market is getting crowded and where it’s still being mispriced. AI is pulling record amounts of capital into venture, but the broader private market is still sorting through stale 2021 valuations, weak liquidity, and a widening gap between the companies everyone wants and everyone else. For early-stage investors, that makes entry price, ownership, dilution, and sourcing matter more than ever. The opportunity is still there, but the easy money is gone. Join the movement, share this with a friend (or two).
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Sources
PitchBook-NVCA Venture Monitor, Q2 2026: U.S. investment, fundraising concentration and exit trends.
Crunchbase, H1 and Q1 2026 funding reports: global funding totals, AI concentration and mega-round data.
CB Insights State of Venture Q2'26: deal count and mega-round concentration.
CB Insights State of AI Q2'26: AI mega-round concentration.
Carta, H1 2026 venture funding: stage-level funding trends.
Carta State of Pre-Seed Q2 2026: SAFE and convertible-note activity.
Carta Seed Valuations Q2 2026: 95th-percentile seed valuations.
Carta VC Fund Performance Q1 2026: TVPI, DPI and fundraising concentration.
Forge Global August 2026 Private Market Update: secondary pricing and discount distribution.
Forge Investment Outlook: historical repricing of companies last funded in 2021 and 2022.
Forge company pricing pages: Starburst Data, ConsenSys, Discord and Databricks secondary pricing and financing history.
Private-company secondary pricing is indicative and may involve different share classes, rights, preferences, transaction structures, and liquidity conditions than a company's primary financing. Nothing in Dhow Dispatch should be construed as investment advice.