Sector Trends
Sector trends in venture capital are the shifts in which industries and technology layers draw investors' money from one year to the next, as distinct from the size of single rounds or funds. In 2026 the main shifts were towards defence technology and the layers that secure and run AI models and agents, with quantum computing and proptech also drawing money.
Defence technology drew record venture funding in 2026, headlined by Anduril's $5 billion round, with Goldman Sachs and Lockheed Martin leading defence rounds and a Saudi defence fund seeking more capital. Within AI, investors wrote repeated large cheques for companies that secure AI agents and paid sharply higher prices for those that run their workloads, while quantum computing produced what Dealroom called the largest US Series B in the field and proptech funding recovered more slowly. By September 2026, defence-tech venture investment for the year stood at more than double the 2025 total, and as of October 2026 proptech was on pace to pass its 2025 level while remaining well below its 2019 peak.
Defense technology
Defence technology moved from a niche many funds avoided to a sector the Pentagon actively courted venture capital into. Investment reached all-time highs in 2026, driven by AI-powered military systems, autonomy and space infrastructure against the backdrop of conflicts in Ukraine and the Middle East. Anduril Industries closed a $5 billion Series H at a $61 billion valuation, roughly double the $30.5 billion mark it had set less than a year earlier. By September 2026, PitchBook counted $19.4 billion of defence-tech venture investment for the year, more than double the 2025 total.
Some of the rounds were led by investors outside venture capital. Goldman Sachs Alternatives led a $1.8 billion Series E into Helsing, the German defence-AI and drone maker, at an $18 billion valuation in July 2026, which the reporting called Europe's largest defence funding round. Lockheed Martin led counter-drone maker Fortem's $50 million Series B to expand manufacturing and global deployment of its radar, command-and-control and interceptor systems. A regional fund also sought more capital: Saudi Arabia's first defence-focused venture fund, MASNA Ventures, asked regulators to raise its cap to $150 million from $100 million as conflict in the Gulf exposed regional military gaps, though Saudi Arabia had recorded only about $200 million in venture defence deals in 2026 by September.
AI security, compute, quantum and proptech
Within AI, late-stage investors paid up for the layers that secure and run models and agents. Cyera raised $400 million at a valuation above $12 billion, three months after a $600 million round at the same valuation, as investors chased companies securing autonomous AI agents inside enterprises. Island's $400 million Series F at $6.4 billion was led by Evolution Equity Partners, which had closed a $1.1 billion dedicated cybersecurity fund in 2024, and funded Island's push to govern AI agents alongside human workers. On the compute side, Modal's valuation more than tripled in five months to $15.75 billion as its annualised revenue passed $1 billion, and Axios Pro described valuations of AI serverless cloud platforms such as Modal and Baseten as rocketing as companies moved to secure compute. Supabase raised $150 million in October 2026, four months after a $500 million Series F, saying AI agents created 70% of new databases on its platform.
In quantum computing, Oratomic's $475 million Series B, which Dealroom called the largest US Series B in quantum technologies, valued the neutral-atom startup at $5.4 billion, up from $1.5 billion at its Series A three months earlier, even as Dealroom cited Gartner's view that the quantum market was overcrowded and that more than half of quantum startups would shut down by 2030 for lack of revenue. Proptech recovered more modestly. Real estate startups raised roughly $12.7 billion in 2026 by early October, according to Crunchbase data, on pace to pass 2025's $12.3 billion but well below the 2019 peak of $24 billion, and Homeward's $120 million Series D in that market came at a valuation the company put in line with its 2021 mark.