Key Takeaways
- • KPMG's Venture Pulse report puts US venture capital investment at $98.4 billion across 3,626 deals in Q3'26, down from exceptional prior-period totals but still strong.
- • AI remained the leading theme, but investor focus has broadened from models and consumer applications to compute, semiconductors, data centers, energy generation, advanced manufacturing, robotics and defense.
- • Secondary transactions are increasingly treated as a core liquidity pathway rather than a fallback, particularly for investors seeking exposure to companies that stay private longer.
- • Fundraising improved, but capital continues to concentrate in established managers and larger vehicles, while first-time funds face a much harder environment.
- • Capital is shifting toward physical AI, robotics, autonomous systems and defense technology, which KPMG characterizes as capital-intensive areas with strategic relevance and high barriers to entry.
Summary
KPMG's Venture Pulse report shows US venture capital investment remained strong in Q3'26, with $98.4 billion invested across 3,626 deals, according to the publisher's summary. That total declined from exceptional levels earlier in the year, but the report characterizes the market as resilient.
AI continued to dominate US venture activity, but the report describes a widening of the opportunity set. Investors are increasingly targeting the infrastructure and capabilities needed to support AI at scale, including compute, semiconductors, data centers, energy generation, advanced manufacturing, robotics and defense. KPMG attributes this shift to both demand for capacity and a search for durable, differentiated businesses. Outside AI-related areas, investment has been more selective, with greater weight placed on revenue traction, defensibility and a credible path to scale.
Liquidity conditions were described as relatively stable. Public-market activity has improved relative to recent years, although some anticipated listings have moved later. Acquisitions and secondary transactions have provided additional exit routes. KPMG says secondaries are increasingly viewed as a core component of the venture market, particularly for investors seeking positions in companies that remain private longer. On fundraising, the report notes improvement, but capital continues to favor established managers and larger vehicles, leaving first-time funds facing a much more challenging environment.
The report also highlights growing investor interest in physical AI and defense. Robotics, autonomous systems, logistics and advanced manufacturing are attracting capital because they address practical industrial needs and support productivity gains. Defense technology is drawing more investment amid geopolitical uncertainty, cybersecurity concerns and greater focus on government demand. KPMG frames these themes as part of a broader move toward capital-intensive technologies with clear strategic relevance, specialized capabilities and potential barriers to entry.
AI continued to dominate US venture activity, but the report describes a widening of the opportunity set. Investors are increasingly targeting the infrastructure and capabilities needed to support AI at scale, including compute, semiconductors, data centers, energy generation, advanced manufacturing, robotics and defense. KPMG attributes this shift to both demand for capacity and a search for durable, differentiated businesses. Outside AI-related areas, investment has been more selective, with greater weight placed on revenue traction, defensibility and a credible path to scale.
Liquidity conditions were described as relatively stable. Public-market activity has improved relative to recent years, although some anticipated listings have moved later. Acquisitions and secondary transactions have provided additional exit routes. KPMG says secondaries are increasingly viewed as a core component of the venture market, particularly for investors seeking positions in companies that remain private longer. On fundraising, the report notes improvement, but capital continues to favor established managers and larger vehicles, leaving first-time funds facing a much more challenging environment.
The report also highlights growing investor interest in physical AI and defense. Robotics, autonomous systems, logistics and advanced manufacturing are attracting capital because they address practical industrial needs and support productivity gains. Defense technology is drawing more investment amid geopolitical uncertainty, cybersecurity concerns and greater focus on government demand. KPMG frames these themes as part of a broader move toward capital-intensive technologies with clear strategic relevance, specialized capabilities and potential barriers to entry.
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