A surge in late-stage deals and renewed investor appetite for AI and clean-tech ventures pushed quarterly venture funding to its highest level since the downturn began

Venture capital funding rebounded sharply last quarter, reaching its highest level in two years as investors returned to growth-stage startups after a prolonged period of caution following the funding slowdown of recent years.

According to data compiled by the Meridian Venture Tracker, startups raised a combined 38.6 billion in disclosed funding last quarter, marking a 27 percent increase from the previous quarter and the strongest showing since the sector’s peak two years ago. The rebound was driven largely by a wave of late-stage deals in artificial intelligence and clean energy technology, sectors that have drawn renewed investor interest after months of tighter capital availability.

“We’re seeing investors move off the sidelines with real conviction, particularly for companies that have demonstrated durable revenue growth,” said Sophia Lindgren, partner at venture firm Halcyon Capital, in remarks issued this week. Lindgren’s comments are illustrative of the broader optimism circulating among investors tracking the rebound.

AI and Clean Tech Lead the Surge

Data from the tracker showed that artificial intelligence companies accounted for nearly 40 percent of total funding last quarter, with several large rounds closing at valuations significantly above prior benchmarks. Clean energy and battery technology startups also saw a notable uptick, collectively raising more than 6 billion, the sector’s strongest quarter in over a year.

Analysts tracking the data noted that early-stage funding, while improved, has not rebounded as quickly as later-stage rounds, suggesting investors remain more comfortable backing companies with established traction rather than unproven concepts. Several venture firms said they expect this pattern to persist in the near term.

Outlook for the Coming Quarters

Industry observers caution that the rebound, while encouraging, does not necessarily signal a full return to the funding levels seen during the sector’s earlier boom years. “This looks more like a return to healthy discipline than a return to excess,” said Marcus Webb, research lead at the Calder Group, in comments framed as illustrative of broader analyst sentiment.

Venture firms say they expect funding activity to remain active through the coming quarters, particularly as more AI-focused startups approach later funding rounds.