{"id":7974281,"date":"2026-03-11T06:15:00","date_gmt":"2026-03-11T13:15:00","guid":{"rendered":"https:\/\/www.thewrap.com\/?p=7974281"},"modified":"2026-03-11T09:59:18","modified_gmt":"2026-03-11T16:59:18","slug":"the-funding-file-venture-capital-investment-january-february-2026-update","status":"publish","type":"post","link":"https:\/\/www.thewrap.com\/industry-news\/deals-ma\/the-funding-file-venture-capital-investment-january-february-2026-update\/","title":{"rendered":"AI Still Dominates as Media VC Deals Fell 69% to $165 Million in First 2 Months of 2026"},"content":{"rendered":"\n\n\n
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Venture capital valuations in media fell 69% in the first two months of 2026 from a year ago, according to new data from PitchBook, signaling a difficult year ahead for media and publishing companies as investors in this area take an \u201cAI-first\u201d approach. <\/p>\n\n\n\n

There was $165 million worth of VC dealmaking activity across January and February in the media sector, down from the $529.12 million <\/strong>during the same two-month period a year ago, according to the firm. <\/p>\n\n\n\n

January had 25 total deals valued at an aggregate of $48.8 million, compared to 37 deals valued at $390 million a year ago. February had 22 deals total valued at an aggregate of $115.8 <\/strong>million, compared to 23 deals valued at $139.3 million a year ago. <\/p>\n\n\n\n

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When taking a broader look across entertainment software, publishing, media and information during the two-month period, there was a total of $760 million in VC deal activity, down from $3.4 billion during the same period a year ago, which was primarily driven by the augmented reality-focused startup Infinite Reality. January made up the lion\u2019s share with 40 total deals valued at an aggregate of $435.3 million, while February had 16 total deals valued at an aggregate of $325.2 million. <\/p>\n\n\n\n

\u201cAI is the story of venture at the moment, and companies that are able to harness that story and drive better content will be able to raise, but it’s going to be a challenging year,\u201d PitchBook\u2019s director of VC research Kyle Standofrd told TheWrap. <\/p>\n\n\n\n

\u201cWhether that be video, image, written text or a mix, the ability to create targeted, high-quality content for end users is a big area of growth. Content is ubiquitous across industries, so for investment, the opportunity to create large companies or help companies drive revenue through automated content is enormous.\u201d <\/p>\n\n\n\n

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Stanford says that the decrease in deal values over the past year signals that the VC market is \u201ctrying to decide how best to approach these companies as the capabilities of AI accelerate.\u201d  <\/p>\n\n\n\n

\u201cEvery market is moving to AI-first for VC investment,\u201d he added. \u201cFor the entire U.S. market, AI investment represented 10% of deal count a decade ago. Now it is 40%. That type of growth is going to change every industry, and it’s something we expect to continue accelerating.\u201d<\/p>\n\n\n\n

As for M&A deals, Paramount\u2019s pending takeover of Warner Bros. Discovery and Apollo Global Management\u2019s buyout of Clear Channel Outdoor Holdings were the largest by size.<\/p>\n\n\n\n

Read on for the full breakdown.<\/p>\n\n\n\n

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\u201cAI is the story of venture at the moment, and companies that are able to harness that story and drive better content will be able to raise, but it’s going to be a challenging year.\u201d \u2013 PitchBook<\/p>\n<\/blockquote>\n\n\n

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\n\t\t\tRead Next<\/strong>
\n\t\t\tThe Funding File: The Biggest M&A and VC Deals in Media and Entertainment in 2025<\/a>\n\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n

VC Investments: Lead the Future, Semafor and Big Shot Pictures top January and February<\/h2>\n\n\n\n

In the AI sector, Arena,<\/strong> a company that allows users to compare large language models through head-to-head matchups, received the largest VC investment of the month, raising $150 million. Andreesen Horowitz and Kleiner Perkins are among its investors. <\/p>\n\n\n\n

“We cannot deploy AI responsibly without knowing how it delivers value to humans. To measure the real utility of AI, we need to put it in the hands of real users,” Arena co-founder Anastasios Angelopoulos said in a statement. \u201cThis funding accelerates the scientific work and community insights that make live evaluation from real users the gold standard for assessing AI in practice.”<\/p>\n\n\n\n

Benjamin Horowitz and Marc Andreesen are also investors in Leading the Future<\/strong>, a super PAC focused on lobbying for policies friendly to the AI industry, which raised $125 million. Its other investors include OpenAI president Greg Brockman and Palantir Technologies co-founder Joseph Lonsdale. <\/p>\n\n\n\n

In the media sector, Ben and Justin Smith\u2019s Semafor<\/strong> hit a $330 million valuation after raising $30 million in January<\/a>. The move came on the heels of the outlet reaching a full year of profitability just three years after launch, with $40 million in revenue and $2 million in EBITDA. Investors include Antenna Group, KKR co-founder Henry Kravis, Carlyle Group\u2019s David Rubenstein and Penny Pritzker\u2019s PSP Partners, among others.<\/p>\n\n\n\n

\u201cThe proof is in the numbers: We\u2019ve set a new historic standard for the global news industry at a time when it is more challenged than ever,\u201d Justin Smith said in a statement. \u201cWith this successful, profitable model in place, we will aggressively invest in our global journalism and convening platforms in the U.S. and around the world.\u201d<\/p>\n\n\n\n

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Meanwhile, former Paramount co-CEO Brian Robbins\u2019 new venture Big Shot Pictures<\/strong><\/a> <\/strong>raised  $100 million from CAA, Greycroft, MarcyPen Capital Partners, Sony Pictures Television and ValueAct Capital Management. <\/p>\n\n\n\n

The new company will focus on making animated and live-action content for YouTube with plans to evolve the projects into theatrically released feature films. It has acquired the rights to Kay Thompson\u2019s \u201cEloise at the Plaza,\u201d the children\u2019s book series about a six-year-old who lives at the legendary New York City hotel.<\/p>\n\n\n\n

\u201cWe will build for how kids actually discover and connect today,\u201d Robbins said in a statement. “The opportunity couldn\u2019t be more clear to us, and the time is now. From reimagining timeless IP to discovering the bold, original ideas by emerging creators, we will work with the most talented artists to bring these stories to life.\u201d<\/p>\n\n\n\n

Other VC investment highlights for the period include:<\/p>\n\n\n\n