Funding to North American startups declined sequentially in the third quarter and came in well below the all-time peak. However, the dip is largely due to the absence of new megarounds for OpenAI and Anthropic and doesn’t appear to reflect any broad weakening in the venture investment climate.
In total, investors poured $92 billion into seed- through growth-stage rounds for U.S. and Canadian startups in the third quarter, per Crunchbase data. That’s a 35% decline from the prior quarter but up 50% from year-ago levels.
Deal volume held fairly steady, with late-stage and early-stage round counts remaining close to prior quarter levels.
Artificial intelligence remained the prevailing theme for startup investors. Per Crunchbase data, roughly two-thirds of total funding this past quarter went to AI-focused companies. Of that, a big chunk went to large rounds for Databricks, Safe SuperIntelligence and Crusoe.
Overall, however, investment fell across most stages. Early-stage dealmaking posted a particularly sharp decline from a multiyear peak the prior quarter, while later-stage funding was also down.
As for exits, quarter-over-quarter IPO comps were always going to be challenging, given that Q2 featured SpaceX’s record-setting market entry. Even compared to a typical quarter, however, the IPO market was fairly sluggish in Q3, with a few biotech, energy and consumer-facing offerings, but no blockbuster tech debuts. M&A activity was more exciting, topped by Nvidia’s September acquisition of Hugging Face.
Below, we look over the quarterly numbers in more detail, breaking out investment by stage, charting AI funding, and analyzing exit activity.
Table of contents
- Late-stage and technology growth funding
- Early stage
- Seed
- AI
- Exits
- M&A
- IPOs
- Slower, but not a slowdown
- Methodology
- Glossary of funding terms
Late-stage and technology growth funding
We’ll start with late stage, since that’s where most startup funding went.
For Q3, investors poured $66.45 billion into late- and growth-stage deals, per Crunchbase data. That’s up about a third from year-ago levels, but down sharply from Q1 and Q2 of this year, when OpenAI and Anthropic pulled in financings of $110 billion and $65 billion, respectively.
For the just-ended quarter, the largest late-stage and growth rounds went to Databricks ($5 billion), AI infrastructure unicorn Crusoe ($3.9 billion), The Boring Co. ($3 billion), and AI coding startup Cognition ($2 billion). Overall, more than a dozen startups attracted late-stage or growth rounds of $1 billion or more, per Crunchbase data.
Early stage
Early-stage investment also held up at historically high levels in Q3, albeit down from prior highs.
Overall, investors put $20.6 billion into early-stage rounds in the just-ended quarter, per Crunchbase data. That was down sequentially from the prior quarter but still well above prior year levels.
A few exceptionally big rounds pushed up the latest quarterly tally. The largest funding recipients included open source AI company River AI’s $1.1 billion Series A, nuclear startup Valar Atomics’ $660 million Series B, and chip hardware and software developer Fab2’s $500 million Series A.
Seed
Seed-stage dealmaking was also quite busy in Q3.
At least $5 billion went to seed, angel and pre-seed rounds in the just-ended quarter, per preliminary Crunchbase data. That’s a bit below both the prior quarter and year-ago comps. However, we expect the Q3 tally to rise a bit over time as seed deals commonly get added to the dataset a few weeks or months after they close.
The AI space delivered some particularly large seed rounds. Of these, standouts were physical AI startups Walden Robotics, which picked up $300 million, and Veeda AI. which secured $90 million.
AI
The percentage of funding going to AI-focused startups also held up at high levels in Q3, per Crunchbase data.
A total of $61 billion went to AI-focused rounds, per Crunchbase data. While that’s down sharply from the prior two quarters, it’s still one of the highest tallies on record.
Exits
As for exits, Q3 featured a number of large M&A deals, particularly in the AI space. The IPO market was a bit quieter, with much of the market’s attention looking forward to enormous offerings from foundational AI pioneers in coming months.
M&A
Acquisition activity was fairly robust in Q3, boosted by a handful of large AI-related purchases. Of these, the biggest was Nvidia’s acquisition of open model development platform Hugging Face for $12.93 billion.
The next-biggest M&A deal was AMD’s purchase last week of World Labs, an AI model and research lab led by AI pioneer Fei-Fei Li, in a stock deal valued around $8.2 billion. Not far behind, in third place, was Stripe’s acquisition of OpenRouter, a startup that routes prompts through different AI models, in an August transaction reportedly valued around $7.5 billion.
In total, there were 11 North American startup acquisitions at reported prices of $1 billion or more in Q3, per Crunchbase data. We list them below.
IPOs
Overall, it was a light quarter for IPO activity. Per Crunchbase data, 17 venture-backed North American companies went public on major U.S. and Canadian exchanges in Q3, per Crunchbase data, collectively raising just under $4 billion.
Three biotech companies raised the largest sums in their IPOs: Adarx Pharmaceuticals, focused on mRNA; Braveheart Bio, a developer of cardiovascular therapies; and Electra Therapeutics, which is working on antibody therapeutics.
Other venture-backed companies that carried out good-sized debuts included Standard Nuclear, a developer of advanced nuclear fuel, and Lime, the scooter and e-bike rental platform.
Notably, however, it was the IPOs that didn’t happen this quarter that attracted the most attention. By this, we are referring of course to Anthropic, which is reportedly eyeing a public list as early as November, and OpenAI, which filed confidentially for an IPO in June and is expected to make its debut in 2027.
Slower, but not a slowdown
Overall, Q3 seems to exemplify the notion that funding activity can decline from peak levels without a clear indication that the investment climate has turned bearish.
Yes, giant funding rounds contracted. However, the maturation of the two most valuable startups, OpenAI and Anthropic, into even more valuable pre-IPO companies, is the kind of thing venture investors want to see.
Moreover, big rounds are still closing at a brisk clip. The AI space is still regularly minting fresh unicorns. And acquirers are snapping up leading names at historically high valuations.
Could things go south from here? Sure. But for now, the AI-driven momentum continues.
Related Crunchbase query:
Related reading:
Methodology
The data contained in this report comes directly from Crunchbase, and is based on reported data. Data is as of Oct. 2, 2026.
Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.
Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.
Glossary of funding terms
Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.
Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.
Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.
Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)
Illustration: Dom Guzman
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