The AlleyWatch January 2026 New York Venture Capital Funding Report

NYC Startups Raised $1.68B in January 2026

New York City startup funding kicked off 2026 with resilience, posting $1.68B across 113 deals—a 93.5% year-over-year surge despite a 20.1% month-over-month seasonal decline. The strong YoY performance was anchored by Rain’s $250M Series C and demonstrated sustained ecosystem strength entering the new year.

NYC startups raised $1.68B across 113 deals in January 2026, marking a sharp contrast in year-over-year momentum despite the expected seasonal pullback. While funding declined 20.1% month-over-month from December’s robust $2.08B—a typical post-holiday pattern reflecting delayed closings and year-end deployment cycles—the market demonstrated remarkable resilience on an annual basis, surging 93.5% compared to January 2025’s $867.3M.

This YoY performance signals sustained strength in NYC’s startup ecosystem even as broader market conditions remain cautious, with the city’s ability to nearly double year-ago funding levels suggesting deepening capital availability and investor confidence in the metro area’s tech sector. NYC captured 26.3% of national venture funding in January, a significant increase from typical monthly shares, as the broader US market experienced a pronounced 58.5% decline to $6.40B.

NYC Deal Activity by Round Type

The funding landscape showed particular depth in late-stage companies, which captured $690M (41.0% of total capital) despite representing just 7 deals—an average check size exceeding $98M that reflects confidence in proven business models with clear paths to profitability or exit.

The distribution across funding stages revealed a more balanced market than recent months, with Series A ($290M, 17.4%) and Early-Stage ($266M, 15.9%) collectively representing a third of total capital—suggesting healthy pipeline development alongside growth-stage momentum. Early-stage activity remained particularly robust with 45 deals representing 39.8% of all transactions, demonstrating continued seed and pre-seed market vitality even as larger rounds dominated headline figures.

Top NYC Funding Rounds – January 2026

Rain’s $250M Series C topped January’s NYC funding activity, representing 14.9% of the month’s total capital deployed. The stablecoin infrastructure platform’s substantial raise positioned the company at the intersection of payments and digital assets, demonstrating continued investor appetite for crypto infrastructure despite broader market volatility.

Cybersecurity firm Claroty secured $150M in Series F funding, underscoring continued investor appetite for enterprise security solutions as operational technology networks face increasing threat vectors. Healthcare emerged as a notable theme beyond just the top deals, with Pomelo Care’s $92M Series C for virtual maternity services highlighting continued investor appetite for healthcare technology that addresses specific care gaps in the traditional system.

AI Investment Maintains Significant Presence

Artificial intelligence companies maintained significant presence with $608.3M in funding across 45 deals (36.2% of total capital), though notably fell short of market dominance—a departure from recent months where AI frequently captured majority share. Among AI-focused startups, Proxima’s $86.3M seed round stood out as an unusually large early-stage raise, while Rogo ($75M Series C) and Datarails ($70M Series C) represented mature AI businesses scaling their operations in logistics optimization and financial planning respectively.

The AI sector’s 39.8% representation in deal count while capturing just 36.2% of capital suggests smaller average check sizes compared to traditional sectors, indicating AI companies may be raising at earlier stages or more conservative valuations than in previous quarters. The AI funding was notably distributed across multiple sectors, with cybersecurity, logistics, financial services, and enterprise software all leveraging AI capabilities to attract significant venture capital.

Market Analysis

January 2026’s $1.68B represented a tale of two narratives: seasonal weakness month-over-month but exceptional strength year-over-year. The 20.1% MoM decline from December’s $2.08B followed typical post-holiday patterns, yet the 93.5% YoY surge from January 2025’s $867.3M demonstrated the NYC ecosystem’s sustained upward trajectory.

Series B funding showed notable strength with $220M deployed across just 6 deals, producing a robust $36.7M average check size that exceeded Series A’s $20.7M average and suggested concentrated capital deployment toward companies demonstrating clear product-market fit and revenue traction. The $14.9M average deal size overall—with a $6.5M median—indicated a funding environment still accessible to emerging companies while favoring growth-stage opportunities.

NYC’s 26.3% share of national funding represented a dramatic increase from typical monthly shares in the 11-13% range, driven largely by the broader US market’s sharp 58.5% decline to $6.40B. This countercyclical performance positioned NYC as a relative strength entering 2026, though the sustainability of this elevated market share remains to be seen as national funding patterns normalize through Q1.