North American Startup Funding Dips in Q3 Amid AI IPO Focus

Funding directed toward North American startups experienced a sequential decline during the third quarter, landing well below its all-time high. Nevertheless, this dip stems largely from the absence of new megarounds for OpenAI and Anthropic rather than indicating any widespread deterioration in the venture capital climate.

According to Crunchbase figures, investors injected a total of $92 billion into seed- through growth-stage rounds for startups across the U.S. and Canada during the third quarter. This represents a 35% decrease compared to the preceding quarter, yet it marks a 50% increase over figures from the same period last year.

Deal volume remained relatively stable, with the counts for both late-stage and early-stage rounds holding close to levels seen in the prior quarter.

Artificial intelligence continued to dominate as the primary focus for startup investors. Crunchbase data indicates that approximately two-thirds of total funding during the past quarter went to AI-centric companies, propelled significantly by large rounds secured by Databricks, Safe SuperIntelligence, and Crusoe.

On the whole, however, investment contracted across the majority of stages. Early-stage dealmaking registered a particularly sharp drop from a multiyear peak attained the previous quarter, while later-stage funding also trended downward.

Regarding exits, quarter-over-quarter IPO comparisons were bound to prove challenging because the second quarter featured SpaceX’s historic market debut. Even when measured against a standard quarter, though, the IPO market remained relatively quiet in Q3, featuring a handful of offerings in biotech, energy, and consumer sectors, but no blockbuster tech entries. M&A activity proved more dynamic, spearheaded by Nvidia’s acquisition of Hugging Face in September.

The sections below provide a more detailed examination of the quarterly figures, breaking down investments 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 begin with the late stage, as it captured the lion’s share of startup capital.

During Q3, investors allocated $66.45 billion to late- and growth-stage deals, based on Crunchbase data. While this is roughly one-third higher than figures from a year ago, it represents a steep drop from the first and second quarters of this year, periods during which OpenAI and Anthropic secured financings of $110 billion and $65 billion, respectively.

For the quarter that just concluded, 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 pulled in late-stage or growth rounds of $1 billion or more, per Crunchbase figures.

Early stage

Early-stage investments also maintained historically high volumes in Q3, although they retreated from prior peaks.

In total, investors deployed $20.6 billion into early-stage rounds throughout the recently completed quarter, according to Crunchbase. This marked a sequential decline from the prior quarter while remaining comfortably above figures from the previous year.

A select group of exceptionally large rounds elevated the latest quarterly total. The top funding recipients featured open-source AI company River AI with a $1.1 billion Series A, nuclear startup Valar Atomics with a $660 million Series B, and chip hardware and software developer Fab2 with a $500 million Series A.

Seed

Seed-stage dealmaking maintained a swift pace throughout Q3.

Preliminary Crunchbase data indicates that at least $5 billion was directed toward seed, angel, and pre-seed rounds in the most recent quarter. This falls slightly below comparisons from both the previous quarter and the prior year. Nonetheless, the Q3 total is expected to climb over time, as seed transactions frequently register in the dataset weeks or months following their official close.

The AI sector generated several notably large seed rounds. Standouts included physical AI startups Walden Robotics, which secured $300 million, and Veeda AI, which raised $90 million.

AI

The proportion of capital flowing toward AI-focused startups remained elevated during Q3, according to Crunchbase information.

A cumulative $61 billion was channeled into AI-centered rounds, per Crunchbase. Although this reflects a sharp reduction from the preceding two quarters, it still stands as one of the highest recorded tallies.

Exits

Regarding exits, Q3 was marked by a series of major M&A transactions, particularly within the AI arena. The IPO market remained subdued as market participants largely anticipated massive public offerings from foundational AI pioneers in the months ahead.

M&A

Acquisition activity proved quite resilient in Q3, propelled by several large AI-related buyouts. Among these, the largest was Nvidia’s purchase of open model development platform Hugging Face for $12.93 billion.

The second-largest M&A transaction involved AMD’s acquisition last week of World Labs—an AI model and research lab led by pioneer Fei-Fei Li—in a stock deal valued at roughly $8.2 billion. Securing the third spot closely behind was Stripe’s acquisition of OpenRouter, a startup specializing in routing prompts across different AI models, via an August transaction reportedly valued at approximately $7.5 billion.

In total, North America saw 11 startup acquisitions announced at valuations of $1 billion or higher during Q3, as reported by Crunchbase.

IPOs

On the whole, IPO activity remained subdued. Crunchbase data shows that 17 venture-backed North American companies went public on major U.S. and Canadian exchanges during Q3, collectively raising just under $4 billion.

Three biotechnology firms captured the largest amounts through their public debuts: Adarx Pharmaceuticals, which concentrates on mRNA; Braveheart Bio, a developer of cardiovascular treatments; and Electra Therapeutics, focused on antibody therapeutics.

Other venture-backed entities executing sizable debuts included Standard Nuclear, a developer of advanced nuclear fuel, along with scooter and e-bike rental platform Lime.

Significantly, however, it was the IPOs that did *not* materialize this quarter that drew the most attention. This refers, of course, to Anthropic, which is reportedly eyeing a public listing as early as November, and OpenAI, which filed confidentially for an IPO in June and anticipates making its public market debut in 2027.

Slower, but not a slowdown

Ultimately, Q3 illustrates the principle that funding activity can pull back from record peaks without signaling a bearish turn in the investment climate.

Undoubtedly, mega-funding rounds contracted. Yet, the evolution of the two most valuable startups, OpenAI and Anthropic, into even more valuable pre-IPO companies represents precisely the progression venture investors hope to witness.

Furthermore, substantial rounds continue to close at a steady rhythm. The AI sector consistently mints fresh unicorns, and corporate acquirers continue purchasing leading names at historically elevated valuations.

Could conditions deteriorate moving forward? Naturally. For the present moment, however, AI-led momentum persists.

Related Crunchbase query:

• North American Startup Acquisitions Of $1B+ In Q3, 2026

Related reading:

• North American Startup Funding Shattered Records In First Half Of 2026, Driven By AI

Methodology

The data presented in this report is sourced directly from Crunchbase and relies on reported figures as of Oct. 2, 2026.

Data reporting lags are most pronounced within the earliest tiers of venture activity, meaning seed funding totals typically experience significant upward revisions after a quarter or year concludes.

All financial valuations are denominated in U.S. dollars unless specified otherwise. Crunchbase translates foreign currencies into U.S. dollars using the prevailing spot exchange rate on the date the funding round, acquisition, IPO, or associated financial event is reported. Even when such events are integrated into Crunchbase long after their announcement, foreign currency transactions are converted at the historical spot rate.

Glossary of funding terms

Seed and angel comprises seed, pre-seed, and angel rounds. Crunchbase additionally factors in venture rounds with unspecified series designations, equity crowdfunding, and convertible notes valued at $3 million (in USD or the as-converted USD equivalent) or less.

Early-stage encompasses Series A and Series B rounds, alongside various alternate round classifications. Crunchbase counts venture rounds with unknown series, corporate venture funding, and alternative rounds exceeding $3 million up to $15 million.

Late-stage covers Series C, Series D, Series E, and subsequent lettered venture rounds following the standard “Series [Letter]” naming convention. This category also integrates venture rounds with unknown series, corporate venture, and other rounds surpassing $15 million. Corporate rounds are factored in solely if the target company previously raised equity capital through a seed or venture series funding round.

Technology growth designates a private-equity financing round secured by a company that has previously completed a “venture” round—essentially encompassing any round situated within the previously defined stages.

Illustration: Dom Guzman