Executive summary
Venture is back, but it is not back for everyone. Carta recorded $30.4 billion in startup funding in Q1 2026, already ahead of last year at this point. The market has fully cleared the hangover from the 2022 valuation reset. Down rounds are rare again. Dilution is down. Terms favor founders.
The catch is where the money is going. More than 60% of all venture capital raised by companies on Carta in Q1 went to AI companies. Within that, a small number of foundational model companies are raising at valuations that bear no resemblance to what everyone else is seeing. An AI foundational model startup at Series A might be raising at a $300 million median valuation. A non-AI startup at the same stage is at $55 million. These are not comparable markets.
SaaS, which has historically dominated this dataset, is facing a genuine question about its future. The category most likely to be disrupted by capable AI is also the largest category in the Carta data. Early-stage SaaS valuations softened this quarter. That may be seasonal. It may not be. Hardware is the quiet winner. Non-dilutive debt is letting hardware founders build before they raise, arriving at institutional rounds with sophisticated cap tables and less dilution than prior generations. Valuations are starting to reflect it.
On liquidity: The IPO market is cracking open. 34 IPOs priced in Q1, raising $9.9 billion. Cerebras priced 20 times oversubscribed. OpenAI has filed confidentially. SpaceX has filed its S-1. But for most companies in this dataset, the public markets are not yet the answer. The secondary market and the tender offer are the real liquidity mechanisms right now. Public listings are returning, but selectively. This is not a crisis. It is a structural shift that is still in progress.
Q1 highlights
AI crosses 60% of capital: Over 60 cents of each dollar of venture capital investment on Carta in Q1 2026 went to AI companies, the highest share recorded to date. Foundational model companies specifically drove much of this, accounting for 14.2% of total capital and nearly a quarter of AI capital. In SaaS, 83% of capital went to AI startups.
Down rounds at historical lows: The down-round rate fell to 11.4% in Q1. This is back in line with 2019 and 2020 levels. Before the bull market, before the reset, before the recovery. The three-year hangover from the valuation lows of 2022 may now be in the past.
Series B and Series C valuations rising: While early-stage primary valuations softened, Series B and Series C primary pre-money valuations are up 17.2% and 12.5%, respectively, since Q1 2025. This may be because AI companies are maturing and moving toward later stages after promising early wins.
New this quarter: Three side-by-side tables breaking out non-AI, AI applied, and AI foundational model companies across every stage from seed to Series E+. Post-money valuation, round size, and pre-money valuation. Q1 2025 versus Q1 2026. The clearest picture yet of how differently these three categories are being priced right now.
What's inside? 40+ charts spanning…
Volume and valuations
Capital raised and deal count by stage, every quarter back to 2018. The full recovery in one view.
Q1 2026 at seed, A, B, C, D, and E+. What each stage raised. What it looked like a year ago.
Median and 90th percentile post-money valuations by stage, 2018 to today.
Key trends
Which stages are seeing valuation gains. Which are softening.
Dilution across every stage for three years running. The numbers are moving in favor of founders.
Down rounds. From a peak of 22% in 2023 to below 12% today. The full arc.
Bridge rounds, time between rounds, company age at raise. The stay-private-longer trend in three charts.
Deal terms. Liquidation preferences and participation rights near multi-year lows.
Tender offers by year and by quarter. The acceleration is visible.
AI
The share of capital going to AI since 2018. Applied versus foundational.
Which industries are most AI-concentrated. SaaS, healthtech, hardware, adtech, education, fintech, consumer, biopharma, and more.
Which cities lead on AI investment. Bay Area, Austin, Washington, D.C., Seattle, Boston, Los Angeles.
Geography
State-by-state capital map for the last 12 months. Regional share by quarter since 2023.
Median valuations by metro: Bay Area, Austin, Boston, Washington, D.C., Los Angeles, New York, San Diego, Seattle, Philadelphia.
Capital raised by quarter since 2018 with industry mix for Bay Area and New York.
DISCLOSURE: This communication is on behalf of eShares, Inc. dba Carta, Inc. ("Carta"). This communication is for informational purposes only, and contains general information only. Carta is not, by means of this communication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services nor should it be used as a basis for any decision or action that may affect your business or interests. Before making any decision or taking any action that may affect your business or interests, you should consult a qualified professional advisor. This communication is not intended as a recommendation, offer or solicitation for the purchase or sale of any security. Carta does not assume any liability for reliance on the information provided herein. ©2026 Carta. All rights reserved. Reproduction prohibited.
