Equity Capital Markets Update – Q2 2026

Equity Financing Deal Volume and Valuation Strength Persist, Business Owners Show Healthy Demand for Growth Capital

2026 Growth Equity Deployment on Pace for Strongest Year Since 2021

Through Q2 2026, equity capital investments in late-stage private companies reached $178 billion, exceeding the capital invested in the first half of any of the past 10 years. Part of the increase in deal volume was driven by continued investment in artificial intelligence (AI) and data center–related companies. Q2 2026 recorded 14 deals exceeding $1 billion in capital raised during the round, up 12 deals year-over-year (YOY). Excluding scaled AI companies—namely, OpenAI, Anthropic, and xAI—there were 13 deals in which more than $1 billion was raised in Q2 2026, compared to 11 in Q2 2025.

Advanced Manufacturing, Cloud Infrastructure & Software Development Tools, and Digital Health were also active sectors for growth equity financing. In the 12 months ended Q2 2026, Advanced Manufacturing accounted for 111 transactions (+50% YOY), Cloud Infrastructure & Software Development Tools recorded 98 transactions (+30.7% YOY), and Digital Health completed 94 transactions (+1.1% YOY). Aggregate transaction value increased meaningfully YOY, rising from $10.3 billion to $34 billion in Advanced Manufacturing, from $13.2 billion to $22.3 billion in Cloud Infrastructure & Software Development Tools, and from $7.2 billion to $9.2 billion in Digital Health. This trend reflects improving deal quality, larger transaction sizes, and sustained growth equity investor appetite for later-stage companies.

Valuations Remain Elevated in Q2 2026, Signaling Sustained Investor Confidence and a Stable Late-Stage Funding Environment

The median valuation for North American transactions reached $310 million in Q2 2026, compared to $243 million in Q2 2025 and above the 2021 level of $250 million. This continued improvement reflects robust investor sentiment, improving public-market comparables, and continued demand for high-growth opportunities.

Financing Structures Continue to Evolve to Meet the Financing Needs of Companies

With financing costs remaining elevated and lenders maintaining selective underwriting standards, there remains a need for creative structuring between capital raisers and providers. Equity investments with more bespoke terms, or structured equity, can be compelling solution for companies in a variety of situations, including companies undergoing performance transitions or operating in sectors facing secular headwinds. Terms can typically be constructed to bridge valuation gaps between companies and investors.

Middle Market Business Owners Show Strong Demand for Equity Capital

More than a quarter (27.3%) of middle market business owners reported securing equity capital in the last 12 months, according to Capstone’s 2026 Middle Market Business Owners Survey. Leading uses of capital for the financings included working capital (50.5%), funding for progress/service line expansion (41.3%), project financing (35.8%), and acquisition financing (32.1%). Across the Technology, Media & Telecom (TMT), Financial Technology (FinTech), and Industrial Tech industries, 35.1% of business owners secured growth capital with 42.4% reporting using the raise for acquisitions. This material appetite for equity financing in the middle market is slated to persist in the next 12-month period. Notably, 28.7% of business owners expect to raise equity capital, up 1.5% YOY.

To discuss equity capital conditions moving through the remainder of 2026, provide an update on your business, or learn about Capstone’s wide range of advisory services and equity capital markets knowledge, please contact us.

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For more on middle market M&A trends, deal volumes, and valuations, access our Capital Markets Update here.