SAN FRANCISCO — The venture capital winter that chilled the startup ecosystem for much of 2023 and 2024 appears to be thawing, with preliminary data showing a 34% increase in early-stage funding during the first two months of 2026 compared to the same period last year.
According to PitchBook, U.S. startups raised $28.3 billion in January and February combined, the strongest start to a year since 2022's record-breaking pace. The resurgence is being driven primarily by artificial intelligence companies, which attracted $12.1 billion — or 43% of all venture investment.
"The AI moment is real, and investors don't want to miss it," said Mary Meeker, general partner at Bond Capital. "We're seeing the most significant platform shift since mobile, and capital is flowing accordingly."
The funding surge marks a notable reversal from the austerity that characterized the past two years, when rising interest rates and economic uncertainty prompted investors to tighten their purse strings. During that period, startup valuations fell by an average of 40%, and many companies struggled to raise follow-on funding.
Beyond AI, several other sectors are attracting renewed investor interest. Climate technology startups raised $3.2 billion in the period, driven by corporate demand for decarbonization solutions. Healthcare technology, particularly companies applying AI to drug discovery and diagnostics, also saw significant inflows.
"The bar for funding has definitely risen," said Alfred Lin, partner at Sequoia Capital. "Companies need to demonstrate clear paths to profitability, not just growth metrics. But for founders who can show both, capital is available."
The funding recovery has not been uniform, however. Late-stage companies continue to face challenges, with Series C and beyond rounds still well below 2021 levels. Additionally, the IPO market remains largely closed, limiting exit opportunities and forcing some mature startups to pursue secondary sales at discounted valuations.
Industry observers caution that the current enthusiasm for AI could lead to overheated valuations reminiscent of previous technology bubbles. Several AI startups have achieved multi-billion-dollar valuations with limited revenue, raising questions about sustainability.