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State of the Markets
H2 2026
Marc Cadieux, Mark Gallagher, Eli Oftedal, Josh Pherigo, Jake Ledbetter, CFA, Andrew Pardo
Key takeaways
Our State of the Markets report distills venture capital fundraising, investment and exit dynamics across the venture landscape using SVB proprietary insights. Every six months, we pair our proprietary data with investor conversations and independent market analysis to equip the innovation economy with timely, practical insights. This edition explores the paradox of today’s market: record highs in VC investment, valuations, IPO values and revenue growth alongside one of the most challenging fundraising environments in decades. Taken together, these developments are redefining how startups are built, funded and scaled.
2 in 5
“AI” companies are engaging in AI washing.
Companies are increasingly touting their AI capability while lacking true AI technology.
1,600
New founders may emerge from the SpaceX, Anthropic and OpenAI IPOs.
Many employees are expected to move on and launch their own companies if rates of company funding echoing Uber’s post-IPO trend.
$5.6M
Median revenue after four years among companies founded in 2022.
This is the fastest growth on record. Historically, companies have hit $2M to $3M in that same timeframe.
The data
From identifying true AI innovators to tracking startup failures and the next generation of founders, these findings offer a look at the forces reshaping the venture market.
ARTIFICIAL INTELLIGENCE
The AI label is becoming harder to trust
Our analysis of 9,000 VC-backed companies found that many (42%) that market themselves as AI companies show little evidence that AI is central to their technology.
The pressure to market as an AI company is making true AI innovators harder to spot, but investors appear to be increasingly adept at identifying companies with AI at their core and rewarding them accordingly.
Notes: The AI relevancy score evaluates companies with AI as a keyword in their description. The methodology looks for signals of technical AI innovation in company descriptors to gauge the degree to which AI is core to their offering vs. boilerplate language. Source: PitchBook Data, Inc. and SVB analysis.
FOUNDER FORMATION
1,600 founders could emerge from the next wave of IPOs
Mega IPOs from SpaceX, Anthropic and OpenAI could create thousands of newly wealthy employees and spark a surge in company formation and early-stage investing.
Uber’s 2019 IPO produced 160 founder alumni, and a similar pattern among roughly 10,000 paper millionaires at SpaceX, Anthropic and OpenAI has the potential to generate an unprecedented wave of new startups.
Source: CNBC, Bloomberg, Tech Crunch, Glass Door, Levels.FYI, S-1 Filings, PitchBook Data, Inc. and SVB analysis.
STARTUP SURVIVAL
VC-backed company failures hit a record high
An estimated 2,345 VC-backed companies are on pace to fail this year, the highest level in recent history, with startups founded during the ZIRP era now accounting for the bulk of closures.
Companies that grew up on cheap capital during the ZIRP era are hitting the end of their runway without an exit plan. Over one-third of companies that have failed in 2026 were founded during the ZIRP era.
Source: PitchBook Data, Inc. and SVB analysis.
Explore the full State of the Markets report
Get insights on the emerging trends shaping the innovation economy
SOTM H2 2026 FAQs
The State of the Markets report is a bi-annual outlook on the innovation economy that distills venture capital fundraising, investment and exit dynamics using proprietary data and 40+ years of insight from partnering with innovative startups. Each edition pairs our data with investor conversations and independent market analysis to deliver timely, practical insights.
This report is designed for key decision-makers within the innovation economy, including:
- Founders: To understand the current market landscape, identify opportunities and benchmark their performance.
- Investors: To gain insights into market trends, identify promising sectors and understand the exit landscape.
- Finance Leaders: To make strategic decisions based on data-driven analysis of the market.
The report provides practical insights to help you:
- Understand where the market is concentrated.
- Benchmark your company's performance against the market.
- Identify which liquidity paths (IPOs and M&A) are opening or staying constrained.
- Make informed, real-time decisions based on proprietary data and insights.
The State of the Markets report is published every six months to provide the most current and relevant insights. This H2 2026 State of the Markets report synthesizes venture-backed innovation economy data through June 30, 2026.
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