AI Shopping Funding: A Quarter-by-Quarter Analysis

All funding deals in the AI shopping market over the last years

Below is the table listing all the deals. You can find our methodology at the end of this page.

If you want a deeper understanding of the market and its current dynamics, get our report covering the AI Shopping Market.

Is AI shopping funding actually growing right now?

AI shopping funding is not in a clean boom right now: companies are still raising money, but the checks got much smaller in the latest quarter.

Across the five quarters we tracked, the market moved from at least $143.4 million in Q2 2025 to $68.0 million, $24.8 million, $75.0 million and finally $23.5 million in Q2 2026. Deal count was much steadier at 10, 8, 5, 8 and 9.

The latest shift is especially revealing. Q2 2026 produced one more deal than Q1, yet total funding fell 68.6% and the median round dropped from $5.13 million to $1.10 million. Companies could still get funded; they just struggled to raise meaningful-sized rounds.

As of now, we see an active but shallow funding market. There are plenty of small bets, while the middle of the market has thinned out sharply.

Quarter	Deals	Capital	Median round	Largest round
Q2 2025	10	≥$143.4M	$4.66M	>$60M
Q3 2025	8	$68.0M	$8.15M	$16.0M
Q4 2025	5	$24.8M	$4.40M	$7.5M
Q1 2026	8	$75.0M	$5.13M	$35.0M
Q2 2026	9	$23.5M	$1.10M	$13.6M

Was Q2 2025 really an AI shopping funding boom, or was it mostly Gensmo?

Q2 2025 looked much stronger than the underlying AI shopping market because Gensmo’s >$60 million financing distorted the headline total.

We counted at least $143.4 million of funding that quarter. Once the only round above $50 million is removed, the number falls to $83.4 million. Gensmo alone represented at least 41.8% of all dollars raised.

Concentration went well beyond one company. The three largest financings accounted for at least 83% of the quarter, while six of the ten rounds were below $5 million.

That changes how we read the apparent crash in Q3. Headline funding fell by more than half, but capital excluding >$50 million rounds declined only 18.5%.

Q2 was still a busy quarter, particularly for new entrants. Calling it a broad $143 million funding boom gives the market more strength than it actually had.

Did AI shopping funding really get weaker in Q3 2025?

Q3 2025 was healthier underneath the headline than the drop in total AI shopping funding makes it look.

Total funding fell to $68 million, but the median round jumped from $4.66 million to $8.15 million. Five of the eight financings landed between $5 million and $20 million, accounting for 87.2% of the quarter’s capital.

That was the strongest middle market we found anywhere in the period.

The type of company receiving money changed too. Follow-on financings jumped from 20% of Q2 deals to 87.5% in Q3. Investors were writing larger checks, but mostly to companies that had already raised before.

Q3 looks more like a normalization after the Gensmo-heavy Q2 than a genuine funding collapse. Fewer companies raised, but the typical deal was considerably larger.

Was Q4 2025 the real low point for AI shopping funding?

Q4 2025 was the clearest slump in AI shopping funding because almost every important measure weakened at the same time.

Only five deals closed, down from eight in Q3. Capital fell 63.6% to $24.8 million and the median financing dropped 46% to $4.40 million. There was no megaround to blame for the comparison.

The market also became narrower. AI Product Search accounted for three of the five deals and two-thirds of all capital, while only three categories recorded any financing.

Even the largest round was just $7.5 million.

Q4 stands out from the other weak quarters. Q3 had a strong middle market beneath its lower headline total, while Q2 2026 still produced nine transactions. Q4 had neither breadth nor particularly large checks.

Did AI shopping funding really bounce back in Q1 2026?

AI shopping funding genuinely bounced back in Q1 2026, although most of the recovery came from companies that were already past their first financing.

Deal count climbed from five to eight and capital more than tripled to $75 million. The median also recovered to $5.13 million. Unlike Q2 2025, there was no >$50 million financing inflating the quarter.

Phia was the biggest reason. Its $35 million Series A represented 46.7% of Q1 funding. Spangle added another $15 million Series A, giving the market a layer of larger early-stage rounds that had disappeared in Q4.

Phia also had a much more tangible commercial story by then. When the company announced the round, it said the app had passed one million users, worked with more than 6,200 retail brands and had grown revenue elevenfold since launch.

Spangle was seeing a similar pull from merchants. Around its Series A, the company was working with brands including REVOLVE, Steve Madden and Alexander Wang, while investor Madrona said customer demand had expanded faster and deeper than it expected.

The rebound was real, but concentrated. Three deals represented 80% of Q1 capital. Investors had started writing meaningful checks again without creating a broad flood of large rounds.

Why did AI shopping get more deals but 69% less funding in Q2 2026?

AI shopping funding became extremely small-ticket in Q2 2026, which explains how the market could produce nine deals while raising only $23.5 million.

Eight of those nine financings were below $5 million. One quarter earlier, Q1 had three rounds between $5 million and $20 million plus Phia at $35 million. By Q2, ReFiBuy was the only company left above $5 million.

ReFiBuy’s $13.6 million Seed round also accounted for 57.9% of all Q2 capital. The other eight financings combined raised less than $10 million.

This is where the current weakness sits. Startup funding activity itself has not dried up, but there is almost nothing left in the middle of the round-size distribution.

We would still be careful about calling smaller rounds a permanent shift because the break is very recent. Q1 had just shown that $15 million to $35 million rounds were possible. For now, Q2 looks like a sharp round-size reset that needs another quarter of evidence before we call it structural.

Quarter	Under $5M	$5M–<$20M	$20M–<$50M	$50M–<$100M
Q2 2025	6	2	1	1
Q3 2025	3	5	0	0
Q4 2025	3	2	0	0
Q1 2026	4	3	1	0
Q2 2026	8	1	0	0

Are investors still backing brand-new AI shopping startups?

AI shopping investors are much less focused on first financings today than they were at the start of the period.

Eight of the ten Q2 2025 deals were first financings. That share collapsed to 12.5% in Q3 and never returned close to the original level: it was 40% in Q4, 37.5% in Q1 2026 and 22.2% in Q2.

The dollar shift was even stronger. Follow-on companies captured 97.1% of Q3 capital, 86.1% in Q1 2026 and 90.4% in Q2.

This does not mean investors have moved into mature late-stage companies. Many of these follow-ons remain Seed or Series A. It simply means investors are more often adding money to companies they already know rather than constantly funding a fresh cohort.

We treat financing status as directional because public funding histories are not always complete. Still, the gap from the first quarter is too large and too persistent to ignore.

Is AI shopping becoming a later-stage funding market?

AI shopping is still overwhelmingly an early-stage funding market despite the growing number of follow-on rounds.

FERMÀT’s $45 million Series B in Q2 2025 was the only Series B-or-later financing we identified across the entire five-quarter period. After that, later-stage deal activity effectively disappeared.

Q1 2026 brought bigger rounds back, but they were Series A financings. Phia raised $35 million and Spangle $15 million. InsightX also completed its Series A through separate closes, including an additional investment from Rakuten Capital and FFG Venture Business Partners.

Then Q2 swung back toward Seed: 77.8% of the deals were classified as Seed, while the rest had no reliable disclosed stage.

The market has become more follow-on-heavy without graduating into Series B, C or growth financing. The money is still clustering around the early part of company development.

Is AI merchandising becoming the hottest part of AI shopping funding?

AI merchandising is currently the clearest category gaining real breadth in AI shopping funding.

We found no Merchandising Tools deals in Q4 2025, followed by two in Q1 2026 and four in Q2. By the latest quarter, the category represented 44.4% of all deals and 76.3% of funding.

The dollar figure needs some caution because ReFiBuy’s $13.6 million Seed accounts for most of it. The median Merchandising Tools round in Q2 was only $1.62 million.

The deal count is more interesting. Four separate companies getting funded says more about spreading investor interest than one company raising a large round.

Other categories have been much less consistent. AI Shopping Assistants swung from more than half of capital in some quarters to less than 10% in Q2 2026, largely depending on whether a company such as Phia raised a big round. AI Product Search briefly dominated Q4, disappeared again in Q1 and returned with only one $0.82 million deal in Q2.

That leaves merchandising as the category with the cleanest recent progression rather than simply the biggest temporary spike.

Quarter	Category	Deals	Deal share	Capital share
Q3 2025	AI Shopping Assistants	4	50.0%	55.6%
Q4 2025	AI Product Search	3	60.0%	66.7%
Q4 2025	Merchandising Tools	0	0%	0%
Q1 2026	AI Shopping Assistants	2	25.0%	56.0%
Q1 2026	Merchandising Tools	2	25.0%	4.5%
Q2 2026	AI Shopping Assistants	3	33.3%	9.6%
Q2 2026	Merchandising Tools	4	44.4%	76.3%
Q2 2026	AI Product Search	1	11.1%	3.5%

Are AI shopping assistants and product search actually losing ground?

AI shopping assistants remain active, while standalone product-search funding has been much more erratic; neither category shows the steady deal growth we currently see in merchandising.

Shopping Assistants produced four deals in Q2 2025, four in Q3, one in Q4, two in Q1 2026 and three in Q2. Capital was far less stable because a few large rounds moved the entire category. Phia’s $35 million Series A, for example, pushed assistants to 56% of Q1 funding even though there were only two deals.

Product Search has been choppier. It went from three deals in Q2 2025 to none in Q3, three in Q4, none in Q1 and one small financing in Q2. Q4’s apparent takeover disappeared immediately.

We would not say investors have abandoned either part of the market. Shopping assistants still attract companies and capital, especially when a breakout consumer product emerges. Product Search remains investable too, but so far it has behaved more like a sequence of bursts than a sustained funding wave.

The rotation these days is toward the infrastructure that helps merchants make products understandable, discoverable and sellable inside AI channels.

Is Europe really taking over more of AI shopping funding?

Europe is becoming a much bigger source of AI shopping deals, but North America still gets the larger checks.

European companies represented 10% of Q2 2025 transactions and 12.5% in Q3. The share then climbed to 20% in Q4, 37.5% in Q1 2026 and 55.6% in Q2.

That is one of the few movements in our research that progresses in the same direction over several consecutive quarters.

The capital split tells a different story. European companies produced five of the nine Q2 2026 deals but collected only 31.9% of the money. North America had three deals and captured 66%.

Europe is adding breadth much faster than funding depth. More European AI shopping companies are getting financed, but their rounds remain smaller on average than the North American ones.

If this continues, the next question will be whether that growing European cohort can move from small Seed rounds into the $5 million to $20 million range that is currently missing from the market.

Are the same investors starting to dominate AI shopping funding?

AI shopping funding still has a pretty scattered investor base, and we do not see a small group of firms repeatedly controlling the market.

Lead-investor disclosure was available for roughly 88% to 100% of deals each quarter. Despite that coverage, no lead appeared on more than one financing within the same quarter.

Only a couple of names repeated across different quarters. NewRoad Capital Partners backed Spangle in Q1 2026 and then led ReFiBuy’s $13.6 million Seed in Q2. Galion.exe also appeared across separate financings.

Corporate investors have shown up occasionally rather than consistently. Stripe participated in Remark, Rakuten Capital joined InsightX and Sia invested in Lemrock. In our quarterly count, deals involving a disclosed strategic investor moved from 0% to 25%, back to 0%, then 25% and back to 0%.

Those investments are interesting because the companies behind them have obvious commercial links to commerce, payments or customer experience. But there is no sustained corporate-investment wave today, and the lead-investor market still looks broad.

Why is AI shopping money moving toward merchandising and catalog infrastructure now?

AI shopping money is moving toward merchandising and catalog infrastructure because product data has become part of the infrastructure that determines whether a brand can participate properly in AI-driven shopping.

The change started becoming visible well before the latest funding quarter. Google introduced a shopping experience inside AI Mode in 2025, combining conversational discovery with its Shopping Graph, virtual try-on and plans for agentic checkout.

Later that year, OpenAI and Stripe launched the Agentic Commerce Protocol alongside Instant Checkout in ChatGPT. Stripe described ACP as a shared language between AI agents and merchants, while OpenAI began letting shoppers move directly from product discovery toward transactions.

The infrastructure became much more concrete in 2026. Shopify and Google introduced the Universal Commerce Protocol, Shopify rolled Agentic Storefronts out to millions of merchants, and OpenAI expanded ACP from checkout into richer product discovery. Shopify’s Catalog API also turned merchant product information into structured data that AI systems can query.

Google kept moving in the same direction with Universal Cart and additional UCP features. More recently, after our funding window closed, Google added AI performance insights for merchants and new product-feed attributes designed to improve how products appear in AI-driven discovery. The commercial direction has continued rather than fading after one product-launch cycle.

Merchant behavior is beginning to catch up with the infrastructure. Shopify reported that in Q1 2026, AI-driven traffic to its stores was eight times higher than a year earlier and orders coming from AI-powered searches had grown nearly thirteenfold.

That makes the recent financing pattern easier to understand. ReFiBuy is explicitly building technology to prepare retailer catalogs for AI-driven shopping. Spangle works on the layer between AI-led discovery and personalized storefront conversion. FERMÀT has moved deeper into AI search, commerce graphs and merchandising intelligence.

Merchandising Tools went from zero deals to two and then four across the last three quarters. The platform changes do not prove that they caused those investments, but they give investors a very concrete reason to care about this part of the stack now.

What is the funding trend actually telling us?

AI shopping funding has not moved in a straight line from weak to strong. The market went through an outlier-heavy Q2 2025, a healthier-than-it-looked Q3, a genuine low point in Q4, a substantial Q1 rebound and then a sudden collapse in round sizes in Q2 2026.

The most durable funding change is who gets the money. First financings dominated the beginning of the period, while companies with previous financing increasingly took over during the following quarters. That shift has persisted even though the market itself remains mostly Seed and Series A.

Breadth is currently improving in specific places. Europe is producing a growing share of deals, and merchandising infrastructure has added companies across consecutive quarters. Neither trend has yet translated into consistently large rounds.

The current weak spot is the middle of the market. Q3 2025 showed what a healthier distribution can look like, with five $5 million to $20 million financings. The latest quarter had only one. More startups receiving $1 million or $2 million does not fully replace a market capable of repeatedly financing $10 million rounds.

Investor concentration is not a major concern for now. Lead investors remain varied and strategic investors appear only occasionally rather than taking over the category.

The category story is becoming clearer too. Shopping assistants can still attract major rounds, but their quarterly funding is volatile. Product Search has appeared in bursts. Merchandising and catalog infrastructure currently has the strongest combination of rising deal count and a clear commercial reason for that growth.

The most misleading number remains headline quarterly capital. One big financing can completely change how a quarter looks. To understand where AI shopping funding is really heading, we would watch round-size distribution, new-versus-follow-on activity and category breadth before looking at the total dollars alone.