A new Venture Capital Global 2026 report by Preqin, a global data and intelligence provider for the alternative assets industry, looks at how the environment for the venture capital asset class improved in 2025, and makes predictions for 2026.

Preqin's 2026 Venture Capital Global report highlights that the environment for the venture capital (VC) asset class improved in 2025, with lower interest rates and growing deal-making optimism in the US providing tailwinds.

The exit environment was one area that saw improvement in 2025, being the highest since 2021 β€“ a standout year. The aggregate VC exit value reached $171 billion through the third quarter of 2025. But pressure on general partners (GP) to provide distributions is still rising, which has meant that GPs are not yet seeing a pickup in investor interest, the report states. Fundraising remains challenging, with only $64.4 billion raised in the first to third quarter of 2025, 48 per cent of 2024’s total.

Deal activity improved and there has been premium pricing for certain themes such as artificial intelligence, beyond which pricing has remained mixed, the report continues. AI accounted for over half of aggregate deal value in the first to third quarter of 2025. Valuations for both public and private AI companies soared, with late-stage rounds having seen dramatic increases.

North America is a key region for the majority of deal activity, where there are fewer but larger deals taking place, the report adds. APAC and Europe saw sharp declines in fundraising, with APAC raising just $9.5 billion in the first to third quarter of 2025 versus $34.2 billion in 2024. Outside AI, energy and utilities, and financial and insurance services have seen a boost in deal activity over the past year.

Investors are also shifting toward late-stage strategies, with 36 per cent of investors highlighting that late-stage VC is the best opportunity, up from 28 per cent last year, while interest in early-stage strategies has declined, the report shows.

Management fees are also near historic lows, with mean management fees for 2025 vintage funds dropping to 1.86 per cent, and the median steady at 2 per cent. Larger funds ($250 million+) typically offer lower fees, but VC discounts are rare.

Outlook
The firm remains positive on the outlook moving into 2026. According to its latest survey, 81 per cent of investors expect VC performance to maintain or improve in the next year, but 59 per cent of fund managers report a decrease in institutional investor appetite. AI, fintech, and healthtech are priorities for VC fund managers in 2026, with 69 per cent prioritizing AI.

The firm predicts that exits will continue to improve in 2026, while fundraising will remain difficult but show signs of recovery. AI will drive deals and pricing, and APAC fundraising is expected to rebound, especially in Japan. Meanwhile, Europe is continuing to reform its VC market, but still lags the US in unicorn creation and assets under management (AuM) as a share of GDP.