As the venture capital world looks ahead to 2026, the prevailing sentiment is one of continued growth, driven overwhelmingly by the transformative power of artificial intelligence, yet underscored by a sharp bifurcation in outcomes where only a select few will truly capture the lion’s share of capital and success. Following a robust 2025, which saw global venture investment track to be the third-highest on record, thanks in large part to a frenzied pace of AI funding, top venture capitalists anticipate an even larger deployment of capital in the coming year, but with a critical shift towards deeper integration, proven fundamentals, and a concentration of wealth into established and emerging winners, signaling an era of "fewer winners" despite increased overall dollars.

The year 2025 set an impressive precedent, demonstrating a powerful resurgence in venture activity. Preliminary Crunchbase data revealed global venture investment reached $205 billion through mid-2025, a substantial 32% increase from the first half of 2024, marking the strongest half-year for venture capital since the peak of early 2022. This momentum continued into the third quarter, with global funding jumping 38% year-over-year, though this growth was notably concentrated at the top, primarily flowing into the largest AI companies. Indeed, the two largest venture funding rounds on record in 2025—Scale AI’s $14.3 billion in Q2 and OpenAI’s staggering $40 billion in Q1—were both squarely within the AI domain, underscoring the sector’s unprecedented ability to attract mega-deals. With 2024 seeing approximately $340 billion invested, and 2025 on track to exceed $400 billion (a 17.6% increase), the stage is set for an even more expansive, yet discerning, 2026.

To glean insights into the 2026 startup funding landscape, Crunchbase News consulted leading investors: George Mathew, managing director at Insight Partners; Tim Tully and Matt Murphy, partners at Menlo Ventures; and Anders Ranum, partner at Sapphire Ventures. Their collective forecasts paint a detailed picture of a market evolving rapidly, driven by technological breakthroughs and a more mature, albeit still competitive, investment environment.

Overall Funding and Round Dynamics: More Dollars, Sharper Divisions

The consensus among VCs is clear: total dollars deployed in 2026 will be up compared to 2025. George Mathew of Insight Partners predicts a rise from the low $400 billion mark to the high $400 billion range, implying a 10% increase. Tim Tully of Menlo Ventures is even more bullish, suggesting a potential 25% increase from the $400 billion-plus trajectory of 2025. This surge is attributed to large funds raising progressively bigger funds, accumulating significant dry powder, and an observable trend of round sizes growing larger across all stages. Matt Murphy, also from Menlo Ventures, highlights the "fast growth and maturation of AI native companies" as a primary driver for large expansion rounds, while Anders Ranum of Sapphire Ventures forecasts a 10% to 15% increase, propelled by "reopening growth rounds and fewer, but larger checks from scaled funds."

However, this increase in overall capital doesn’t signal a rising tide lifting all boats. Instead, 2026 will be a "tale of two cities," as Mathew describes it, or a clear "bifurcation" according to Murphy. AI funding will continue to dominate, potentially accounting for half of all venture capital, with growth and later-stage AI companies commanding substantial raises at premium valuations. For the broader market, particularly non-AI-native companies or those without clear differentiation, the outlook is less rosy. Murphy anticipates that while AI winners will see rounds continue upwards, the "number 3 to 8 players in categories really struggle to raise and likely seek M&A." Even winning SaaS companies from the ZIRP era, now past their initial valuations, will likely raise flat to slightly up rounds, with those failing to rebound seeking liquidity through private equity. Ranum succinctly captures this duality, noting that "hyper-growth AI companies clearing at premium valuations, while the median remains flat with tighter terms and less available capital." This dynamic starkly underscores the "fewer winners" theme: abundant capital for the few, constrained resources for the many.

Concentration of Capital: Growth Dominates, Seed Sees Activity

When it comes to where these net new dollars will concentrate, the VCs largely point to growth-stage deals, especially the "megarounds of AI infra and foundational models" (Mathew). Murphy agrees, stating that "bigger rounds in growth" will lead, as early AI winners continue to separate themselves and the enormous private growth market capital pours in. Tully also sees concentration in growth, attributing it to the growing capital needs of high-growth companies dependent on frontier lab and hardware spend.

While growth will command the largest dollar volumes, seed rounds are also expected to see an uptick in deal count and even larger individual fundraises, thanks to new entrants like neolabs and neoclouds. Ranum, however, suggests Series A might be a crucial stage, as seed remains crowded and growth selectively reopens for companies with "real revenue and AI leverage." This indicates a "barbell" effect, where concentrated bets occur at the growth end, and a vibrant, albeit competitive, early stage.

Sectoral Shifts: AI’s Unassailable Reign

The question of which sectors will gain share of venture dollars in 2026 elicits a near-unanimous response: AI, AI, and AI. Mathew humorously, yet accurately, sums it up, identifying foundational models, agentic infrastructure, and vertical AI as the three key sub-sectors within AI poised for significant expansion. The implication is stark: "it will likely be very difficult for a SaaS company without native AI/agentic capabilities to find VC dollars at any stage."

Tully elaborates on this, predicting an increase in Frontier Labs (driven by compute and data demand), AI infrastructure (for models, tooling, and applications), and Biotech/Healthtech AI (catalyzed by the acceleration of R&D). Ranum adds AI infrastructure (due to cost/performance breakthroughs), defense (influenced by geopolitical factors), and healthcare AI (pressured by provider margin challenges) to the list of gaining sectors. Conversely, traditional consumer and horizontal SaaS companies, particularly those without a compelling AI narrative, are expected to lose share. This aggressive pivot to AI, and away from undifferentiated software, solidifies the notion that only companies at the cutting edge of technological innovation, or those profoundly leveraging it, will be the "winners."

AI Evolution: Beyond Wrappers to Deep Integration

The discussion around "AI wrappers" versus deeper infrastructure, data, and verticalized workflows reveals a maturing perspective. Mathew believes the shift away from superficial AI wrappers has "already happened," stating that 2025 demonstrated the difficulty of survival for such companies. He emphasizes that even vertical AI providers must be "deeply embedded into industry workflows" to differentiate from foundational models. Murphy sees a more balanced market in 2026, with the number of AI apps scaling significantly, driving demand for more tooling and infrastructure products to support operational challenges. While apps remain strong, he anticipates a 50-50 split between apps and infrastructure. Ranum, meanwhile, is optimistic that there are enough dollars to support both generic AI wrapper apps and deeper infrastructure/verticalized workflows, noting potential app-layer winners in accounting, ITSM, and ERP. The message here is clear: superficial AI will not cut it; depth, differentiation, and solving real-world problems are paramount for success.

Liquidity Pathways: M&A and Secondaries Take Center Stage

For liquidity in 2026, the VCs foresee a mix, but with a pronounced emphasis on M&A and secondaries. Mathew expects both IPOs and M&A to be drivers. However, Tully points out that the bar for IPOs has significantly risen, with the median time to IPO for companies valued over $500 million now exceeding 11 years, and requirements including $500 million-plus in revenue, over 30% growth, and positive Rule of 40. Given these stringent criteria, he believes only a handful of companies are positioned for IPO, leading to continued growth in M&A and secondaries as shareholders seek liquidity. Murphy echoes this, predicting IPOs will be "slightly up," but M&A will see a "continued upward trend" as legacy companies seek AI assets and private market players consolidate. He also expects secondaries to "continue to rise as VCs get more intentional about liquidity, and even become more active in buying and selling to each other." Ranum agrees, expressing excitement for more M&A and secondaries, alongside an uptick in IPOs for high-end, scaled companies. This landscape indicates that while public markets might offer an exit for a select few "super winners," M&A and secondary markets will provide crucial liquidity for a broader, though still selective, group of successful ventures.

Venture Fundraising and Deployment: Specialization is Key

The impact of 2026 venture fundraising on deployment will further highlight the "fewer winners" dynamic. Mathew stresses that "scale and domain expertise will matter," making it "increasingly harder to be a generalist tech investor." Murphy notes that "multistage firms have an advantage" given the size of AI rounds, forcing smaller funds to either go earlier or write smaller participation checks. He suggests it could be a "great time to be an early-stage firm if you can pick well and get in before the big uptick rounds," which are increasingly happening at the Series A stage. Ranum doesn’t anticipate a shortage of capital for funds, expecting total fundraising in 2026 to be comparable to or stronger than 2025, as limited partners (LPs) are actively seeking exposure to the AI wave. This means capital is available, but it will flow to specialized funds with a proven track record, further concentrating power and opportunity.

The 2026 Outlook: A Year of Fundamental AI Advantage

The collective wisdom of these top VCs paints a vivid picture for 2026: a year of accelerated venture capital deployment, predominantly funneled into the burgeoning AI sector. George Mathew encapsulates the technological leap, predicting "we are accelerating to a world where models and agents can complete a full day’s worth of work with minimal or no human intervention, and we may already be there in some domains." Matt Murphy sees "AI hitting a further inflection in the enterprise as security issues and technology choices are largely addressed, and enterprises substantially increase their application development velocity with tools like Claude Code."

Ultimately, Anders Ranum’s one-sentence prediction serves as the guiding principle for the year: "2026 is a fundamentals-first year where capital rewards revenue growth, efficiency and real AI advantage, and punishes anything that is AI veneer on old ideas." This implies a market that, while flush with cash for the right opportunities, will be highly discerning. The increased venture dollars and bigger rounds will be concentrated among a select group of companies that demonstrate genuine innovation, strong business models, and profound AI integration, leaving a growing cohort of undifferentiated or underperforming ventures struggling for funding, and thus creating a landscape defined by "fewer winners" but significantly more impactful ones. The future of venture capital is bright, but it’s a brilliance reserved for the truly exceptional.