VC election impact guide
VC
💲Kalshi valued at $40 billion, Polymarket hit by hackers. Kalshi’s latest round closed yesterday, giving it a valuation of about double Polymarket’s as we previously predicted. Meanwhile, Polymarket briefly paused trading due to a cybersecurity incident. Read more about why there is still room for both companies in our Prediction Markets Go Head-to-Head report.
Plus: Check out our Q3 2026 US PE Middle Market Report, sponsored by Bass, Berry & Sims, Insperity and AIG.
The venture market has settled into a relatively strong footing as the US midterms approach.
That strength, however, rests on a narrow base, our latest research explores. AI, which has received a lot of political attention but has yet to receive much in the way of regulation, represents roughly 83% of US VC deal value and is approaching half of deal count. A more restrictive policy environment toward AI itself, or toward the computing power buildout with datacenters, could change AI’s growth trajectory.
Changes will come at the sector and regulatory levels. A Republican sweep would be a clear win for defense and defense tech. Solar, wind, and clean energy would face further pressure. With a Democratic win for either chamber, defense budget would still grow, but slower, and investors would become more bullish toward alternative energies heading into the 2028 presidential election.
Policymakers also have proposals in front of them that could lessen restrictions on secondary activity and ease public reporting. The INVEST Act and DEAL Act have largely bipartisan support but haven’t moved to law. But QSBS changes enacted with the Big Beautiful Bill could be back on the chopping block with a transfer of power in Congress.
The midterms won’t rewrite venture, but they could shape the stability of the market’s current strength.
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Fee-free co-investment is central to driving down the costs of PE investing for institutional investors. But the growing continuation vehicle market threatens their ability to hold onto these hard-earned economic rights.
In most cases, the agreements governing co-investments don’t address what happens if a company is subject to a CV transaction, said Genie Cesar-Fabian, general counsel and chief operating officer at Institutional Limited Partners Association, a trade association for institutional investors in private equity.
Co-investors are entitled to proceeds from exits, but they don’t have an explicit right to roll into the CV with the existing no- or low-fee stipulations.
LPs are saying, “I had this co-invest deal with a GP that I’ve been investing in for several legacy funds. We’ve had this financial partnership for 15, 20 years. Now CVs are a thing, and my economics are changing dramatically. I can’t really do anything about that,” Cesar-Fabian said.
ILPA released new guidance last week that details disclosure and best-practice expectations for GPs running CVs, including instances in which co-investments are rolled into a continuation fund.
The industry group, which represents more than 600 institutional investors in private markets, called for no net increase in fees or carry costs for rolling LPs in CV processes.
- Corporate consolidation has reached your kid’s Halloween candy. All variety bags now contain the same treats as the next house over, so candy hauls are bigger but nearly identical. [The Atlantic]
- Alphabet’s stock just completed a “death cross”—the 50-day moving average of the share price fell below its 200-day moving average as the company shed half a trillion of its market value yesterday. [The Wall Street Journal]
- The latest Call of Duty game—which features a North Korean invasion—gets mixed reviews from South Koreans. Critics of President Lee Jae Myung urged him to play, while progressives asked about the ethics of commercializing the story. [South China Morning Post]
Enterprise AI company Cohere completed the initial close of a Series E targeting C$7 billion ($4.5 billion) led by Schwarz Group at a C$35.7 billion ($25.5 billion) valuation.
Prediction markets company Kalshi raised a $1 billion Series G led by Sequoia and Wellington Management at a $40 billion valuation.
Seoul-based FuriosaAI, which develops AI chips, raised a $620 million Series D from investors including Infinitum, Jericho Capital and QUDA Capital at a $2.9 billion valuation.
Fractile, a London-based AI chip startup, raised a ÂŁ540 million Series C, Sifted reported.
Biotech Dren Bio, which focuses on antibody drugs for cancer and autoimmune diseases, raised a $350 million round led by Juvia Group and Lightspeed.
Serval, the developer of an enterprise automation platform, secured a $150 million Series C at a $3 billion valuation led by Sequoia.
Silicon battery materials manufacturer Group14 Technologies raised a €150 million Series D extension.
Solink, the developer of an AI vision intelligence platform for physical operations, raised more than $100 million in a round led by Vertu Capital.
Personal AI assistant startup Wabi raised a $55 million round led by IVP at a $1.25 billion valuation.
PhotonPay, the developer of a stablecoin-based financial operating system, raised a $40 million Series C led by Blockchain Capital.
Laboratory automation startup Opentrons secured a $40 million Series E led by Avego.
Bites, which develops a frontline performance and training platform for restaurants and retail employees, secured a $40 million Series A led by PeakSpan Capital.
Netherlands-based mobile connectivity startup Braid raised a $38 million Series A led by Octopus Ventures.
Medtech startup StimCardio, which develops a wearable device for cardiac rhythm disorders, raised a $30 million Series A led by Metis Medtech.
Midstream Health, which operates a healthcare financial operations platform, received a $20 million Series A led by Valtruis.
Architectural design and engineering startup Dream, which develops world models, raised $17 million in seed funding from investors including Andreessen Horowitz, SV Angel and XYZ.
The Carlyle Group and the European Bank for Reconstruction and Development agreed to sell Black Sea Oil & Gas and BSOG Holding Activity, Romania’s largest offshore natural gas producer, to Mazarine Energy.
Conversational voice AI startup Deepgram agreed to acquire Renegade Partners-backed Daily, the developer of an open-source voice agent framework.
Nimble, which builds a nail polish application robot and is backed by the Google AI Startups Fund, was acquired by 10Beauty.
GamePix, which specializes in browser game distribution and is backed by Zest Group, was acquired by video game commerce company Xsolla.
ARK Invest and Tim Draper agreed to invest in accelerator Capital Factory, which backs startups in the defense, space, energy, advanced manufacturing, robotics and life sciences sectors.
A significant chunk of PitchBook’s top universities for undergraduate entrepreneurs are in North America. Top institutes include University of California, Berkeley; Stanford and Harvard.
