Q3 North America: $92 Billion, AI Captures Two-Thirds of Funding

North American startup funding reaches $92 billion in the third quarter, down 35% from the previous three months but up 50% year-on-year. AI accounts for $61 billion and approximately two-thirds of the total amounts. Exits remain active: Nvidia acquires Hugging Face for $12.93 billion, while 17 IPOs raise just under $4 billion, awaiting filings from Anthropic and OpenAI.

Increased Acquisitions and 17 IPOs, Awaiting Anthropic and OpenAI

M&A activity remained strong in the third quarter. Nvidia finalized its acquisition of Hugging Face for $12.93 billion, completing the deal in September. Other notable transactions include AMD's purchase of World Labs for around $8.2 billion and Stripe's acquisition of OpenRouter for approximately $7.5 billion. In total, there were 11 acquisitions of North American startups with announced amounts of at least $1 billion. On the financial markets side, 17 North American companies funded by venture capital were listed on major U.S. and Canadian exchanges, collectively raising just under $4 billion. The largest raises during the IPOs involved three biotechnology companies — Adarx Pharmaceuticals, Braveheart Bio, and Electra Therapeutics — while Standard Nuclear and Lime also stood out among the notable entries. The IPO market remained generally quiet, with no major tech debuts, a situation highlighted by the comparison with the second quarter, marked by a record entry from SpaceX. Attention is now focused on upcoming filings: Anthropic is considering a listing as early as November, and OpenAI filed a confidential IPO request in June, with launches expected in 2027.

$92 Billion Raised Despite Decline, and Stable Deal Volume

North American startups raised $92 billion in the third quarter, which is 35% less than the previous quarter but 50% more than a year earlier. The number of funding rounds remained close to recent levels, despite a general decline in amounts across most stages. The contraction is noticeable in late-stage funding, where investments are decreasing, and more broadly across all segments compared to recent peaks.

$61 Billion for AI in the Quarter, with Targeted Mega Rounds

AI has established itself as the core of investment: about two-thirds of the capital went to companies in the field, totaling $61 billion. This level is down from the previous two quarters but remains among the highest observed. Notable rounds include funding for Databricks, Safe SuperIntelligence, and Crusoe.

Late Stage and Growth: $66.45 Billion, Far from OpenAI and Anthropic Peaks

Late-stage and growth rounds totaled $66.45 billion in the third quarter, up about one-third year-on-year. However, they remain significantly lower than the amounts of $110 billion and $65 billion observed in the first and second quarters for OpenAI and Anthropic, respectively. Among the largest rounds of the quarter were Databricks with $5 billion, Crusoe with $3.9 billion, The Boring Co. with $3 billion, and Cognition with $2 billion.

Early Stage and Seed: $20.6 Billion and at Least $5 Billion, with Some Massive Rounds

Early-stage investments reached $20.6 billion, down from the previous quarter but still above levels from a year ago, following a previously observed multi-year peak. Notable rounds include River AI raising $1.1 billion in Series A, Valar Atomics $660 million in Series B, and Fab2 $500 million in Series A. In the seed stage, at least $5 billion was allocated to seed, angel, and pre-seed rounds, slightly below recent comparisons. This total is expected to increase over time, as seed transactions are often added to databases after their closure. In AI, notable early rounds include $300 million for Walden Robotics and $90 million for Veeda AI.

Still Rapid Rounds and High Valuations on Exits

Even though amounts are decreasing from quarter to quarter, significant funding rounds continue to close at a steady pace. The AI sector is also seeing new unicorns emerge. On the exit side, acquirers are taking over leading players at historically high valuation levels.