The SaaS VC Report 2026

Welcome to the SaaS VC Report 2026, SaasRise's annual deep dive into the state of venture capital for software and SaaS companies worldwide. This report covers full-year 2025 data with Q1 2026 updates, analyzing investment trends, valuations, top VC firms, geographic distribution, and what it all means for founders and investors.

2025 was a year of extremes. Global venture capital hit $512 billion in deal value — the second-highest annual total ever — driven almost entirely by artificial intelligence. AI companies captured more than half of all VC deal value globally, reshaping the venture landscape in ways not seen since the dot-com era. Meanwhile, Q1 2026 shattered all records with $297 billion in a single quarter, fueled by unprecedented mega-rounds from OpenAI, Anthropic, xAI, and Waymo.

Yet beneath the headline numbers lies a deeply bifurcated market: a small number of AI-powered companies are absorbing the majority of capital, while traditional SaaS companies face compression in multiples and increased scrutiny from investors demanding profitability and efficiency. This report unpacks the full picture.

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Key SaaS Venture Capital Stats

Here are the key statistics for the software venture capital market in 2025:

The 2026 SaaS VC Rankings

Top 20 SaaS VC Firms — Investments, Exits, and AUM

The Top 20 SaaS VC Firms By Investments, Exits, and AUM

The 2026 SaaS VC Power Rankings

If we give equal 33% weighting to software investment count, 33% weighting to AUM, and 33% weighting to number of software exits to create a Software VC Power Ranking, the top 25 list becomes:

Top SaaS VC Firms – Power Rankings

These 25 firms together control approximately $645 billion in AUM and have over $130B in dry powder. 18 of the top 25 firms are based in the San Francisco Bay Area, with 2 in New York, 2 in China, 1 in London, 1 in Austin, and 1 in Bangalore. Notably, Thrive Capital enters the top 25 for the first time at #16, driven by its aggressive AI investing strategy including major bets on OpenAI and other frontier AI companies.

The AI Dominance of Venture Capital

The defining story of 2025 wasn't just how much money was invested — it was where it went. Artificial intelligence has fundamentally reshaped the venture capital landscape, absorbing more than half of all global deal value for the first time in history.

According to PitchBook-NVCA data, AI/ML deals captured 65.6% of all US VC deal value in 2025, totaling $222 billion out of $339.4 billion. That's a staggering concentration: 50% of the total US deal value was invested in just 0.05% of completed deals. The top deals — OpenAI's $40 billion round, Databricks at $4 billion, Anthropic's $13 billion, and xAI's $10 billion — collectively accounted for the majority of capital deployed.

Since the launch of ChatGPT in late 2022, AI investment has grown from $73 billion in 2022 to $222 billion in 2025 in the US alone — a 204% increase in just three years with a 24% increase in the number of deals during that period. AI companies accounted for nearly one-third (31.4%) of all completed venture deals globally in 2025.

SaaS VC Deals By Year

After declining from the pandemic-era peaks, software VC deal count showed signs of recovery in 2025, rising approximately 12% to an estimated 9,200 deals from 8,188 in 2024. While still well below the 2021 peak of 16,446 deals, this marks the first year-over-year increase since 2021.

This recovery was driven primarily by AI-related deals, which accounted for nearly one-third of all completed transactions. First-time financing activity remained low, however, reflecting broader selectivity in the VC market. Investors concentrated capital in proven companies with clear AI narratives, while the long tail of traditional SaaS startups continued to face funding challenges.

The average deal size surged to an estimated $21.7 million, up 42% from $15.3 million in 2024. This continues the trend of fewer deals, but much larger check sizes, as VCs deploy capital into their highest-conviction bets.

SaaS VC Dollars Invested By Year

Total software venture capital invested globally reached an estimated $200 billion in 2025, up 60% from $125 billion in 2024 and the second-highest annual total ever, behind only the $297 billion peak in 2021. The AI investment supercycle drove the majority of this growth.

While down from the peak of $297 billion in 2021 driven by low interest rates, abundant capital, and pandemic-accelerated digital adoption, software VC investment in 2025 surpassed the 2022 level of $197 billion. The recovery was not evenly distributed, however: AI-related software captured more than half of the total, meaning non-AI software VC investment actually remained relatively flat at roughly $95 billion.

The pattern is clear: capital has bifurcated. A small number of AI-first companies with massive compute requirements and exponential growth trajectories are absorbing the lion's share of new investment, while traditional SaaS companies compete for a shrinking pool of non-AI venture capital. For SaaS founders, the implication is stark — integrating AI into your product strategy has become table stakes for attracting venture investment.

Global Software Venture Capital Invested By Round

Let's see how the money breaks down between Seed, Series A, Series B, Series C, and Series D-E-F+ rounds.

SaaS VC Dollars Invested By Year By Round

The most striking change in 2025 was the explosion in Series D/E/F+ investment, which surged to an estimated $85 billion — up 140% from $35.4 billion in 2024. This was driven almost entirely by AI mega-rounds (OpenAI, Anthropic, xAI, Databricks, etc.) that fell into later-stage categories. Early-stage (Seed + Series A) investment grew a healthy 22% to $52.5 billion, signaling that early-stage AI investing remained robust.

How Software Valuations Have Changed

Venture valuations for software firms continued their post-2023 recovery in 2025, with AI-powered companies commanding significant premiums. However, the recovery was uneven — AI startups saw valuations soar while traditional SaaS faced more disciplined pricing.

Here are the median pre-money valuations per round over the last twelve years for Series A, B, and C software startups.

Series A median pre-money valuations reached a new all-time high of $47.0 million in 2025, up 18% from the previous record of $39.9 million in 2024. The AI boom has been the primary driver — early-stage AI companies with strong technical teams and product-market fit are commanding premium valuations, with some AI-native startups receiving $60-80M+ pre-money valuations at Series A. Average Series A valuations (which include outliers) jumped to $25.3 million from $20.3 million, a 25% increase per PitchBook data.

Series B median pre-money valuations rose to an estimated $185.0 million in 2025, up 10% from $168.2 million in 2024. The growth was more moderate than at Series A, reflecting investor caution at this stage. Interestingly, average Series B valuations actually declined slightly to $56.9M from $59.3M (PitchBook data), suggesting a barbell effect: a few AI companies commanding massive valuations while the broader market was flat or down.

Series C median pre-money valuations recovered to an estimated $255.0 million in 2025, up 13% from $225.0 million in 2024 but still well below the $320 million peak in 2021. Late-stage investors remain more disciplined than during the zero-interest-rate era, demanding clearer paths to profitability and exits. The most dramatic shift was at Series D+, where average valuations exploded to $460.1 million from $213.4 million, driven entirely by AI mega-rounds.

SaaS VC Deal Valuations By Round By Year

SaaS Valuations By Round By Year

The percentage of shares sold in venture deals has continued its long-term decline. In 2025, Series A founders sold approximately 22.3% of their company (down from 25.8% in 2014), Series B founders sold 14.7% (down from 23.4% in 2014), and Series C founders sold 14.1% (down from 17.3% in 2014). This trend reflects the increasing leverage founders have in negotiations, particularly for AI-first companies.

SaaS VC Deal Revenue Multiples

Because of the compelling business model of SaaS (recurring revenue annuity streams), SaaS firms continue to command higher revenue multiples than most industries. For venture-backed SaaS companies growing at 50-200%+ annually, revenue multiples remain elevated relative to the broader market.

In 2025, the median revenue multiple for venture-backed SaaS companies was approximately 10.8x ARR, up from 10.1x in 2024. However, there's a critical nuance: AI-powered SaaS companies typically commanded 14-20x+ revenue multiples, while traditional SaaS companies without an AI narrative saw multiples compress to 6-8x.

Revenue multiples peaked in 2022 at 11.8x before settling back to 10.1x in 2024. The 2025 recovery to 10.8x was almost entirely driven by AI-native companies being included in the dataset. For non-AI SaaS, multiples likely remained flat or slightly declined.

Revenue Multiples by Growth Rate

Growth rate remains the single most important driver of revenue multiples for venture-backed SaaS firms. The Rule of 40 has also become increasingly important, with each 10-point improvement linked to approximately a 1.1x increase in EV/Revenue multiples (up from 0.8x in early 2025).

SaaS VC Deal Revenue Multiples by Growth Rate

The spread between high-growth and low-growth SaaS companies has widened significantly. Companies growing at 100%+ can command 20x+ revenue multiples (especially if AI-native), while companies growing below 20% are seeing multiples compress below 5x — a dynamic the market has dubbed the "SaaSpocalypse" for traditional, slow-growth SaaS.

Public SaaS Multiples Under Pressure

While private venture-backed SaaS valuations held up reasonably well in 2025 (boosted by AI), the public SaaS market told a very different story. Public SaaS multiples declined sharply throughout 2025, driven by fears of AI disruption, slowing revenue growth, and a rotation toward profitability metrics.

Key public SaaS valuation data points:

• The SEG SaaS Index declined from 6.3x EV/Revenue (Q4 2024) to 4.8x (Q4 2025) — a 24% decline in just one year
• The BVP Nasdaq Emerging Cloud Index average revenue multiple stood at 5.8x with average growth of 18.6%
• Per Aventis Advisors, the median EV/Revenue multiple for public SaaS fell to 3.4x as of March 2026 — the lowest since tracking began in 2015
• B2B SaaS revenue multiples contracted from 6.7x in 2024 to 5.9x in 2025 (Finerva/SEG data)
• Profitable SaaS companies traded at 7.8x revenue vs. 6.7x for unprofitable peers — profitability now commands a clear premium
• EV/EBITDA is rapidly becoming the dominant valuation metric for SaaS for the first time, with the sector trading at ~26.6x EBITDA
• For the first time since tracking began, US SaaS companies no longer trade at a premium to global SaaS

What Revenue Multiple to Expect For Your SaaS Firm

Based on current market data, here is a realistic framework for SaaS company valuations:

Hot SaaS Sectors for VC in 2026

Not all parts of the SaaS market were equal in the eyes of investors. In 2025, venture capital concentrated heavily in sectors where AI created the most transformative opportunities:

• AI Infrastructure & Developer Tools: The hottest sector in 2025, with companies building the "picks and shovels" of the AI revolution commanding premium valuations. This includes AI coding assistants (Cursor raised $2.3B at $29.3B valuation), AI development platforms, vector databases, model serving infrastructure, and AI observability tools. Developer tools with AI integration saw some of the strongest growth and most aggressive investor interest.
• AI-Powered Vertical SaaS: Investors gravitated toward companies applying AI to specific industries — healthcare AI (diagnostic tools, clinical workflow), legal AI (document review, contract analysis), financial AI (risk assessment, automated accounting), and construction/real estate AI. The thesis: vertical AI can deliver immediate, measurable ROI, making it easier to justify premium pricing and avoid the "AI commodity" trap.
• Cybersecurity & Identity: Security remained a top-funded category, with SEG reporting it maintained premium valuations (6.3x EV/Revenue in Q4 2025). Companies like Saviynt ($700M Series B), Wiz, and CrowdStrike-adjacent startups attracted massive investment as enterprises faced growing AI-powered cyber threats. Zero-trust, identity access management, and AI security (protecting AI models from adversarial attacks) were key sub-sectors.
• Data Infrastructure & Analytics: This was the only SEG product category to see multiples expand year-over-year in 2025, with median EV/Revenue increasing 11% to 4.5x. Companies central to enterprise data architectures — including platforms needed to feed AI models — saw sustained demand. Databricks' $4B+ Series L at $134B valuation exemplified the space.
• Fintech SaaS: B2B fintech continued to attract significant investment, though with more emphasis on profitability. Payments infrastructure, banking-as-a-service, regulatory compliance (regtech), and treasury management tools were key areas. The trend toward embedded finance in SaaS platforms also drove investment.
• Defense & Government Tech: A breakout category in 2025, led by Anduril's $2.5B Series G. Growing defense budgets and the desire to modernize military technology with AI created a new wave of defense-tech SaaS companies that attracted significant VC interest, including companies building autonomous systems, battlefield intelligence platforms, and government workflow tools.

The Best Locations for Software VC

The top ten cities for software venture capital firm headquarters are San Francisco, New York City, Beijing, Shenzhen, London, Seoul, Boston, Shanghai, Singapore, and Tel Aviv. Let's see how this breaks down in terms of AUM percentages.

Top 400 SaaS VC Firms – By City

San Francisco continues to dominate with nearly half of all software VC AUM. New York City strengthened its position as the #2 hub, boosted by firms like Tiger Global, Thrive Capital, and a growing ecosystem of AI-focused VC firms. Notably, Tel Aviv entered the top 10 this year, displacing some traditional hubs, reflecting Israel's growing prominence in cybersecurity and AI software.

By Country

The United States and China continue to lead the world for VC firm headquarters, representing over 84% of total software AUM. As AI continues to dominate VC headlines, and companies like DeepSeek in China rival OpenAI, Chinese VC firms' AUM is likely to continue growing.

By Continent

Top Regional Software VCs

Top 15 North American Software VCs

Top 10 Asian Software VCs

Top 10 European Software VCs

Q1 2026: The Quarter That Broke All Records

As we publish this report in April 2026, Q1 2026 has already shattered every record in venture capital history.

The unprecedented spike was driven by four behemoth deals:

These four rounds alone raised $188 billion, accounting for 63% of total funding in the quarter. OpenAI's $122 billion round — the largest private funding round in history — valued the company at $852 billion, making it more valuable than most S&P 500 companies.

Other notable Q1 2026 developments:

• Approximately 47 new early-stage unicorns were minted in Q1 2026 alone, the fastest cohort ever recorded
• Thinking Machines Lab (founded by former OpenAI CTO Mira Murati in 2024) shattered the seed round record with a $2 billion seed led by Andreessen Horowitz, valuing the company at $10 billion
• OpenAI's valuation of $852B is now larger than Meta, and Anthropic's $380B surpasses most financial institutions
• The combined valuation of the top 5 private AI companies now exceeds $1.5 trillion

SaaS VC Outlook for 2026 and Beyond

Looking forward, several powerful forces will shape the software venture capital landscape:

🔥 AI Will Continue to Dominate Capital Allocation

The AI investment supercycle shows no signs of slowing. With Q1 2026 shattering all records and foundation model companies continuing to raise at unprecedented scales, AI will likely capture 60%+ of software VC dollars in 2026. However, the market is maturing — investors are increasingly distinguishing between genuine AI innovation and "AI-washing." Companies must demonstrate real AI-powered value, not just bolt-on features.

📉 The Great SaaS Repricing

Traditional SaaS companies without clear AI strategies will continue facing valuation pressure. Public SaaS multiples have compressed significantly, and this repricing is working its way through to private markets. Founders of non-AI SaaS should focus on profitability, efficiency, and demonstrating resilience to AI disruption. The Rule of 40 and net revenue retention are now the metrics that matter most.

💰 Dry Powder Creates Opportunity

Despite fundraising challenges, global VC dry powder remains substantial at approximately $600 billion. Combined with PE dry powder of $1.1-1.3 trillion, there is ample capital waiting to be deployed. As interest rates continue to normalize, this capital should begin flowing more freely, particularly toward growth-stage companies with strong unit economics.

🚪 The Exit Window Is Opening

2025 saw VC exit value surge to $549.2 billion, up $200B+ from 2024. IPOs generated $119.4 billion from 62 public listings, and acquisitions totaled $112.7 billion across 995 deals. The IPO market is thawing, and with 32,000 PE-owned companies valued at $3.8 trillion waiting for exit, the pressure to transact will only increase. For VC-backed SaaS companies, the exit environment is improving meaningfully for the first time since 2021.

🌍 Geographic Diversification Accelerates

While the US remains dominant (66% of AUM), the AI race is creating new opportunities globally. China's DeepSeek rivaling OpenAI, Europe's Mistral AI, and India's growing AI ecosystem are creating a more multipolar venture landscape. Expect to see more cross-border AI deals and international AI-focused funds.

📊 Profitability Is the New Growth

The era of "growth at all costs" is definitively over. Profitable SaaS companies trade at meaningfully higher multiples than unprofitable peers (7.8x vs 6.7x), and investors are increasingly focused on EBITDA and cash flow efficiency. For the first time, EV/EBITDA is becoming the primary valuation metric for SaaS — a seismic shift from the revenue-multiple era. SaaS companies that can demonstrate both growth and profitability will command premium valuations, while those burning cash without a clear path to profitability will struggle to raise.

Sources

This report draws on data and analysis from the following sources. All data is as of Q1 2026 unless otherwise noted.

Primary Data Sources

• PitchBook-NVCA Venture Monitor (Q4 2025) — US VC deal activity, AI/ML deal share (65.6%), valuations by stage, exit data
• PitchBook Global VC First Look (Jan 2026) — Global VC deal value ($512B), exit value ($549.2B), deal counts
• KPMG Venture Pulse (Q4 2025) — Quarterly global VC investment, exit value, fundraising ($118.4B)
• Crunchbase / TechCrunch — Q1 2026 Record Quarter ($297B)
• CB Insights — State of Venture 2025 — Alternative global VC total ($469B by CB Insights methodology)

Valuation & Multiples Data

• SEG 2026 Annual SaaS Report — SEG SaaS Index quarterly medians (Q4'24: 6.3x → Q4'25: 4.8x), category breakdowns
• BVP Nasdaq Emerging Cloud Index — Average revenue multiple (5.8x), average revenue growth (18.6%)
• Aventis Advisors — SaaS Valuation Multiples 2015-2026 — Median EV/Revenue (3.4x as of March 2026), M&A deal multiples
• SaaS Capital Index — Median public SaaS ARR multiple (6.7x as of June 2025)

Major Funding Rounds

• OpenAI — $122B at $852B valuation (March 2026) — TechCrunch
• OpenAI — $40B at $300B valuation (March 2025) — OpenAI Blog
• Anthropic — $30B Series G at $380B (Feb 2026) — Anthropic.com
• Anthropic — $13B Series F at $183B (Sept 2025) — Anthropic.com
• xAI — $20B Series E at ~$230B (Jan 2026) — TechCrunch
• Waymo — $16B at $126B (Feb 2026) — Waymo Blog
• Databricks — $4B+ Series L at $134B (Dec 2025) — TechCrunch
• Meta / Scale AI — $14.3B for 49% stake (June 2025) — Fortune
• Figure AI — $1B+ Series C at $39B (Sept 2025) — TechCrunch
• Saviynt — $700M Series B at ~$3B (Dec 2025) — Saviynt.com

Industry Reports & Analysis

• Top 10 AI Mega-Rounds of 2025 (~$84B combined) — TechFundingNews
• OECD — VC Investments in AI Through 2025 — AI captured 61% of global VC deal value
• S&P Global — PE/VC Dry Powder Analysis (2025)
• Moonfare — Private Equity 2025 Review — Global PE/VC deal and exit trends
• xAI Funding History — Complete funding round timeline and valuations
• Sacra — Anthropic Revenue, Valuation & Funding
• Q1 2026: 47 Early-Stage Unicorns — Angel Investors Network / Crunchbase data

Note: Different data providers (PitchBook, CB Insights, Crunchbase, KPMG) use varying methodologies for counting VC deals and investment totals, which can lead to different headline figures for the same period. This report primarily uses PitchBook-NVCA data for US figures and PitchBook global data for worldwide totals. Estimates for firm-level AUM and dry powder are based on SaasRise analysis of publicly available data.