Meet our VC all-star team | PitchBook News Summary

1. Key Themes

Fundraising Winter Continues Across Private Markets — Except Debt

Private market fundraising remains depressed across nearly every strategy as exits stay clogged and LPs run low on distributable cash.

"With the exception of private debt, all private market strategies tracked by PitchBook experienced year-over-year fundraising declines for the 12-month period ending June 30, 2026."

The mechanism: fewer exits mean less capital recycling back to LPs, who then have less to recommit.

"Private equity exits and distributions are down industry-wide, and limited partners are left with the choice of offloading holdings onto the secondary market, borrowing against the value of their portfolios or waiting it out."

Flight to "Safety" — Mega-Funds Are Winning LP Dollars Despite Weaker Returns

Capital is consolidating into fewer, larger, brand-name funds even though the data doesn't support that this is the better bet.

"The funds that LPs are backing are larger, safer bets on general partners with proven track records. Funds that closed at $1 billion or above accounted for 78.2% of total capital raised in H1 2026, up from 59.1% in 2021."

This is a rational risk-aversion response, not a returns-driven one — a key disconnect for allocators to note.

"This is despite returns from the largest alternative asset managers consistently underperforming those of their smaller peers since around 2015, according to PitchBook data."

Physical AI Is Creating a New Security Category

As AI moves from software into physical systems (robots, drones, autonomous vehicles), a new cybersecurity subsector is emerging to defend it — and investors are paying up.

"AI is moving out of the cloud and into the physical world... Frontier models are pushing the patch window to zero. Attacks now happen at machine speed, so defense has to as well."

The capital is following: Exein's valuation exploded in just two years on this thesis.

"The Rome-based startup was valued at $1.7 billion, a 30-fold increase in two years."

AI Infrastructure Is Spawning Its Own Financial and Risk Layer

Beyond model-building, a wave of startups is emerging to manage the financial plumbing and risk assessment around AI infrastructure itself — trading, underwriting, and inference brokering.

"Liquid Compute, a startup building a regulated exchange for trading AI infrastructure, emerged from stealth with a $15 million seed round." "Artificial Intelligence Underwriting Company, which develops risk-assessment tools for AI infrastructure, secured a $40 million Series A led by Ribbit Capital." "Delos Data, which specializes in inference for AI infrastructure networks, raised $100 million."

2. Contrarian Perspectives

Bigger funds aren't better — but LPs are buying them anyway. The data explicitly shows a divergence between capital flows and performance: mega-funds have captured a rising share of commitments precisely during a period when they've underperformed smaller peers.

"Funds that closed at $1 billion or above accounted for 78.2% of total capital raised in H1 2026, up from 59.1% in 2021... despite returns from the largest alternative asset managers consistently underperforming those of their smaller peers since around 2015." This suggests smaller, differentiated managers may represent a genuine (if currently unfashionable) opportunity for allocators willing to go against the flight-to-safety herd.

Not every "AI breach" is actually an AI failure. The Revolut item pushes back on the assumption that AI agents are now the primary attack vector in high-profile breaches — the reported incident was old-fashioned social engineering, not an AI exploit.

"Revolut's data breach wasn't caused by an AI agent hack. The fintech handed over the data of almost 700 customers to people posing as government employees." This is a useful corrective for investors pattern-matching every security incident to the AI-risk narrative.

3. Companies Identified

Exein — Rome-based startup building embedded security for IoT devices and now physical AI systems. Mentioned as the lead story: raised $270M at a $1.7B valuation (30x in two years), led by Headline with Sofina, Goldman Sachs, and Balderton participating. "AI is moving out of the cloud and into the physical world," said CEO Gianni Cuozzo.
Open Cosmos — Satellite manufacturer. Raised €300 million with participation from Lightrock and ETF Partners.
Euclyd — Netherlands-based chip designer. Raised a €200 million Series A led by Samsung, Somerset Capital Partners, Innovation Industries, and EQT's Scaleup Europe Fund.
Factory — AI coding agent developer. "Secured a $200 million round at a $5 billion valuation from investors including Khosla Ventures, Blackstone and Sequoia."
Profound — Marketing software for AI search optimization. "Received a $180 million Series D led by Sequoia and Kleiner Perkins at a $1.8 billion valuation" — signals investor appetite for the emerging "AI search visibility" category.
Wonder / DoorDash — DoorDash invested $125M in GV-backed Wonder and acquired its Grubhub Campus Dining business for $300M — notable strategic consolidation move in food delivery.
Atome Financial / Grab Holdings — Singapore fintech unit agreed to be acquired by Grab in a $1.49 billion deal, a notable Southeast Asia fintech exit.
Altera (Silver Lake-backed) — AI, robotics and industrial chipmaker that "filed confidentially for an IPO," a signal of improving exit conditions for AI/semis names.
Center Parcs — UK vacation park operator undergoing a Brookfield-led recapitalization at a $6 billion valuation with Australian Retirement Trust and Mercer Super joining — illustrative of PE using recaps to manage hold periods amid the exit drought.

4. People Identified

Jessica Hamlin, Senior Funds Columnist at PitchBook — Author of the fundraising lead story; provides the data-driven analysis of the LP/GP capital dynamic.

Byline: "By Jessica Hamlin, Senior Funds Columnist"

Leah Hodgson, Deputy Editor, European Private Markets at PitchBook — Author of the Exein feature story on physical AI security.
Gianni Cuozzo, Founder and CEO of Exein — Quoted articulating the physical AI security thesis driving the round.

"Frontier models are pushing the patch window to zero. Attacks now happen at machine speed, so defense has to as well."

5. Operating Insights

Founders should anticipate more selective, concentration-driven fundraising environments — both at the VC/PE fund level and probably trickling down to portfolio company financings. Fidelity's sponsored content underscores this directly for founders:

"Capital is more concentrated, with investors writing fewer checks. AI companies now capture a larger share of funding, while valuations shift across the market."

Liquidity mechanisms are shifting, not disappearing — GPs facing LP pressure are increasingly turning to recapitalizations and continuation structures (e.g., Center Parcs) rather than waiting for traditional exits, a tactic other GPs holding aging assets should watch closely.
A specialized "AI infrastructure services" layer (risk, underwriting, trading, inference brokering) is investable now, evidenced by multiple concurrent raises (Liquid Compute, Artificial Intelligence Underwriting Company, Delos Data) — operators building adjacent tooling to the AI buildout, rather than models themselves, are finding capital.

6. Overlooked Insights

US capital's quiet takeover of European football is accelerating and may be a proxy for broader US PE expansion into European consumer/media assets.

"US investors have upped their holdings across Europe's Big 5 soccer leagues—roughly 40% of teams in those leagues now have a US investor. The English Premier League leads the way, with more than two-thirds of clubs backed by a US investor." This is a distinct, cross-border capital flow trend buried in a "chart of the day" callout, separate from the AI/fundraising narrative dominating the issue.

Space is becoming contested, investable military/dual-use territory. The Side Letters blurb on a deployed US space weapon signals rising government and possibly private capital interest in orbit-based defense/comms infrastructure — an adjacent thesis to the physical-AI-security theme but with a geopolitical/dual-use angle that could open new defense-tech investment categories.

"The new accessibility of orbit means more countries could opt to deploy communication-jamming or electronic-warfare hardware in space."