Startup and Venture Capital News for Thursday, February 5, 2026: Key Deals, Growth in AI and Deep Tech Investments, Venture Capital Strategies, and Global Startup Market Trends.
As of early February 2026, the global venture capital market shows a steady recovery following the downturn of recent years. Preliminary estimates suggest that 2025 was the third most successful year in history for startup investments (only trailing the peak years of 2021 and 2022), indicating that significant private capital is returning to the tech market. Investors worldwide are increasingly funding promising companies, record-scale deals are being finalized, and startups are revisiting plans for initial public offerings (IPOs). Major venture funds are launching new mega-rounds and strategies, while governments and sovereign funds are amplifying support for innovation, keen not to fall behind in the global technological race. Consequently, this positive trend in the venture capital market instills cautious optimism for 2026, even as investors remain selective in their assessments and business models.
The Return of Mega Funds and Record Investments
Following a period of stagnation, "mega funds" have returned to the market—huge pools of capital for technology investments. American flagship Andreessen Horowitz (a16z) has raised over $15 billion in new funds, increasing its assets under management to a record $90 billion. These funds are directed towards priority areas—including artificial intelligence, cryptocurrencies, defense technologies, and biotech. Concurrently, Japanese firm SoftBank has strengthened its presence in the AI sector: at the end of 2025, SoftBank invested $22.5 billion in OpenAI, marking one of the largest single investments in startup history. The renewed activity of such players underscores the trend of capital concentration among industry leaders and investors' desire to secure a stake in the next technological breakthrough.
The AI Startup Boom: Unprecedented Funding Rounds
The artificial intelligence sector remains the primary driver of the venture capital boom. AI startups are attracting unprecedented investments, setting new records for the size of funding rounds. For instance, Elon Musk's xAI project received approximately $20 billion in financing with participation from Nvidia—an extraordinary amount for a private company. OpenAI, the market leader in AI, is not only attracting capital but also securing strategic deals: the company has arranged for exclusive supplies of high-performance Cerebras chips worth over $10 billion to accelerate its models, bolstering its technological advantage. Alongside giants, emerging players are also rapidly growing: in the U.S., generative video startups (such as Higgsfield) and voice AI companies (Deepgram, etc.) achieved "unicorn" valuations just a few years after their inception. In Europe, the German company Parloa raised $350 million at a valuation of $3 billion, reinforcing the global nature of the AI craze. The enormous funds flowing into AI reflect the intense competition among companies and nations for supremacy in this domain and create new market imbalances, with a lion's share of venture dollars concentrated in AI projects.
Major Exits in Fintech and a Wave of Mergers
The financial technology sector is undergoing a wave of consolidation, signaling the maturation of the fintech market. Several high-profile deals were announced in January 2026. Capital One bank agreed to acquire Brex—a corporate expense management platform—for $5.15 billion. This acquisition marked the largest "bank-fintech" deal in history, highlighting traditional financial giants' desire to integrate cutting-edge fintech solutions. European venture fund Hg acquired the American finance platform OneStream for approximately $6.4 billion, buying out shares from investors, including KKR. Other announced deals include Deutsche Börse's purchase of the Allfunds platform for €5.3 billion to strengthen its position in WealthTech and US Bancorp's acquisition of brokerage firm BTIG for up to $1 billion. Alongside major acquisitions, several fintech startups are themselves entering the purchasing market: for example, Australian unicorn Airwallex is expanding in Asia by acquiring the Korean payment company Paynuri. The surge in M&A activity illustrates that as the sector matures, successful fintech companies either fall under the wing of larger players or grow through strategic acquisitions.
Revival of IPOs: Startups Returning to Public Markets
The market for initial public offerings (IPOs) for technology companies is revitalizing after a prolonged pause. The year 2025 surprised analysts with the number of high-profile public listings: at least 23 companies in the U.S. executed IPOs with assessments over $1 billion (compared to just 9 a year prior), with the total market capitalization of these offerings exceeding $125 billion. Investors are once again willing to embrace profitable and rapidly growing companies on public markets, particularly if the business has a strong narrative around AI or other "hot" technologies. In 2026, this trend is expected to continue—several "unicorns" are openly hinting at preparations for IPOs. Among the most anticipated candidates for public listing are:
- Major fintech "unicorns": payment platforms Plaid and Revolut;
- Leaders in artificial intelligence: AI model developer OpenAI, big data platform Databricks, business-focused AI startup Cohere;
- Other tech giants: for instance, space company SpaceX, if market conditions remain favorable.
The successful debuts of these companies could provide an additional boost to the market, though experts warn that market volatility could suddenly close the "IPO window." Nevertheless, the revival of public listings strengthens confidence that investors are prepared to reward startups with strong growth and profitability metrics.
Defense and Cyber Startups in the Spotlight
The geopolitical landscape and emerging risks are reshaping venture investors' priorities. Amid rising tensions between states and the pursuit of technological independence, significant capital is being funneled into defense and cybersecurity startups. In the U.S., the "American Dynamism" initiative is gaining traction—investments in technologies that strengthen national security. A prime example is the previously mentioned mega-round by a16z, part of which will be allocated to defense and deep tech startups. Startups developing solutions for the military and government entities are attracting nine-figure sums: Californian company Onebrief, which creates military planning software, recently raised about $200 million in investments at a valuation exceeding $2 billion and acquired a relevant startup to enhance its platform capabilities. In Europe, the rapidly growing cybersecurity startup Aikido Security from Belgium achieved "unicorn" status ($1 billion) within just two years of operations, offering a comprehensive platform for code and cloud protection. Such successes reflect the growing demand for technologies ensuring digital and national security—from supply chain protection (e.g., British Cyb3r Operations raised $5 million to monitor cyber risks) to new intelligence and satellite monitoring solutions. The trend toward enhancing support for defense projects is also evident at the governmental level: governments and funds, particularly in the U.S., Europe, and Israel, are eagerly investing in startups that can provide a strategic advantage.
Regional Highlights: U.S. Leads, Europe and Asia Follow
Geographically, the venture boom has a global character but is unevenly distributed. The U.S. remains the primary locomotive—American projects account for the lion's share of significant rounds, particularly in AI. Silicon Valley retains its status as the main capital attraction hub, although the competition for talent and deals is rising worldwide. In Europe, the landscape is being restructured: continental economies are ramping up venture investments. Germany surpassed the UK in the total volume of startup investments by the end of 2025, indicating the strengthening of European hubs. Regional EU funds and government programs (e.g., initiatives from France and Scandinavian countries) are fostering the creation of local unicorns and the development of the artificial intelligence sector. In Asia, the dynamics are varied: the Indian ecosystem has reached a new level of maturity—January saw the emergence of the first "unicorns" of 2026 and the revival of high-profile IPOs on local exchanges, reflecting the scale and maturity of the market. Conversely, the Chinese venture market remains relatively subdued due to regulatory pressures and a shift of capital toward domestic priorities; however, Chinese investors are actively funding foreign AI and chip projects to stay competitive. The Middle East and North Africa are showing acceleration: funds from the UAE, Saudi Arabia, and Qatar are increasing their financing of technology companies both regionally and globally, supporting fintech, cloud services, and AI startups. Startup activity is also rising in Latin America and Africa, although in absolute terms, these regions still lag behind the rest of the world. Thus, the venture boom is genuinely encompassing all continents, forming a more balanced global innovation ecosystem.
Looking Ahead: Cautious Optimism and New Benchmarks
Despite the current upswing, investors maintain a degree of caution, remembering the lessons from the recent market "cooling." Capital is flowing back into the tech sector, but startup requirements have become tougher: funds expect teams to provide clear business models, economic efficiency, and understanding pathways to profitability. Company valuations are rising, particularly in the AI segment; however, investors are increasingly emphasizing diversification of risks and the long-term sustainability of their portfolios. The returning liquidity—from billion-dollar funds to new IPOs—creates opportunities for substantial growth but also heightens competition for outstanding projects. It is likely that in 2026, the venture capital sector will enter a phase of more balanced development: funding for "breakthrough" areas (AI, biotechnology, climate technologies, defense) will continue, but there will be an enhanced focus on growth quality, corporate governance, and regulatory compliance. This approach should help the market avoid overheating and lay the groundwork for the sustainable development of innovations in the long term.
