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Seattle-area startups raised $2.7 billion in venture funding through the first half of 2026, across 163 deals, down about 40% from $4.5 billion in 210 deals during the same period a year ago.
The figures come from the recently released PitchBook-NVCA Venture Monitor report for Q2 2026. The decline in capital reflects fewer deals across the board in the Seattle region, with much of the funding going to a handful of large rounds for energy, cybersecurity, and space startups.
Here is the region’s top 5 for the second quarter, as tracked in the report:
Against the AI grain: In Q2 2026 specifically, startups in the Seattle area closed 85 deals totaling $1.5 billion. That was down from 101 deals and $2.3 billion in the same quarter a year ago, but up from Q1 2026, which PitchBook revised to 78 deals and $1.2 billion as part of its regular data updates.
Heavy infrastructure investments by Microsoft and Amazon have helped to establish the Seattle area as an AI hub, but the region’s pure-play AI startups, on the whole, aren’t seeing investment on the same scale as some of their peers in Silicon Valley and other tech hubs around the country.
That creates a disconnect with the larger U.S. venture capital market. AI companies accounted for 86% of all U.S. venture dollars in the first half of the year, according to the PitchBook-NVCA data.
Nationally, it was a record half: U.S. startups raised $412.7 billion through June, already surpassing the full-year record of $358.6 billion set in 2021. But the number is misleading. Deals of $100 million or more accounted for 87.5% of the total, and AI companies captured 86 cents of every venture dollar.
OpenAI and Anthropic alone absorbed roughly 43% of all global venture capital in the first half of the year, by one estimate. The Bay Area, home to both, pulled in $319 billion, about three times its H1 2025 total.
Strip out those two companies and the national picture looks very different. Seed funding fell 27% nationally in the first half, and first-time fund formation is on pace for its lowest year since 2016.
Regional trends: In that way, what’s happening in the Seattle area reflects the current realities of the market. However, the region is also slipping relative to its peers in the latest numbers.
Among the 10 largest U.S. metro areas for venture funding, Seattle ranked seventh by capital invested in the first half of the year, down from fifth in H1 2025. By deal count, the region was last in the top 10.
The data used in this analysis covers the Seattle-Tacoma combined statistical area (CSA), a broader regional boundary that includes communities beyond the core metro region.
Political climate: Washington’s shifting tax and economic landscape adds another variable.
The state now taxes capital gains at up to 9.9%, a new millionaires’ tax takes effect in 2028, and legislators this year floated taxing the federal QSBS exemption that startup founders and early employees rely on when they sell shares at exit. That bill didn’t pass, but generated enough alarm to cause a backlash from startup community leaders and investors.
Looking ahead: Blue Origin, Jeff Bezos’ Kent-based space company, is reportedly seeking up to $10 billion in what would be its first outside funding round. A deal that size would be larger than every other Seattle-area venture round this year combined.
Rohit Talluri learned the tradition at Amazon: always keep an empty chair in the room to represent the customer — a reminder of the people who will ultimately use whatever gets built.
Now, with AI coding tools creating software faster than ever, Talluri and his co-founders, fellow Amazon veterans Jean Farmer and Gabriel Fong, recognize that the customer can be easily forgotten in the process. So they’re creating a seat at the table for AI agents.
That’s the idea behind Primitive Labs. The startup is building what it calls behavioral intelligence: systems that observe, reason and act as customers would across software platforms and devices, helping product teams learn how people will react to a new feature, design or marketing decision before it ships.
Traditional user research and focus groups can take weeks or months, so teams under pressure to ship quickly are tempted to skip them. Primitive Labs is automating that research with agents that simulate human behavior, aiming to make it a routine step in building software.
“It’s bringing humans back to the center of a world that’s created by AI,” Talluri said. “That is the goal here.”
The mission, according to the startup’s launch post, is to “make human behavior a first-class primitive of software development.” That’s the inspiration for Primitive Labs’ name. The idea is to build products that people will understand, trust and keep using — not the average user, but specific types of users in specific contexts.
Founding team: Talluri, the Primitive Labs CEO, is joined by co-founders Farmer, CTO; and Fong, COO.
Fong and Talluri have worked together since 2020. At AWS in Seattle, Fong held product marketing and enterprise account roles, then led sales and marketing at the cloud consultancy DoiT International.
At Primitive Labs, his role runs broader than sales and marketing, spanning product direction, customer development and operations. Talluri describes him as highly technical and a hands-on contributor to the company’s core product work.
Farmer and Talluri worked together at AWS on large-scale machine-learning infrastructure, including the SageMaker HyperPod training service, before both moved into Amazon’s AGI organization.
Farmer worked on the Amazon Nova models’ ability to use software tools — designing how the models call tools and take actions, and building the systems to test and measure how well the resulting agents perform. That work included benchmarks for the Model Context Protocol (MCP), the emerging standard for connecting AI models to outside tools and data.
Roots in AI autonomy: Talluri joined the AGI Autonomy Lab, the group Amazon assembled around talent it hired from Adept, a San Francisco startup building AI agents that operate software on their own.
Amazon had brought on Adept’s CEO, David Luan, a former OpenAI executive, along with other co-founders in 2024, and licensed the startup’s technology, putting Luan in charge of the lab. Talluri worked there on computer-use agents and helped launch Nova Act, Amazon’s agentic computer-use model.
Talluri said he initially came close to leaving Amazon in 2025 to start a company, before leaders there steered him toward the Autonomy Lab to work under Luan (who has since left Amazon).
Funding: Primitive Labs has raised a pre-seed round, led by a16z Speedrun and joined by several small, newer venture funds and a group of angel investors. The company isn’t disclosing the funding amount.
Its launch post lists backers including Olive Tree Capital, Cloverfield Fund and Unexpected Investments (from former TechCrunch editor Josh Constine), plus angels such as Luan, Harsh Patel and Artur Kiulian, and others with backgrounds at OpenAI, Amazon, Google DeepMind, Databricks, Nvidia and Meta.
Primitive Labs will join a16z Speedrun’s cohort starting this month, and expects to raise its next round around the end of the program, in September or October.
Headquarters: The company is based in San Francisco, where it’s working part-time out of a16z’s Speedrun space, with plans to get its own office after making its first hires.
Talluri, a University of Washington graduate who read GeekWire as a student and dreamed of launching a startup of his own, said the choice came down to San Francisco’s talent density and the pace of AI research there, plus the Speedrun program being there.
Primitive Labs posted its first job listings last week — for founding engineers, researchers and an intern, in San Francisco or New York.
Product status: The company is pre-revenue and working with a small group of early customers who are testing its product and helping shape it, including private previews with what Talluri described as Fortune 500 and Fortune 50 consumer-technology and e-commerce brands.
The company plans to launch its products in general availability later this year.
How it works: The agents work across devices including computers and phones, focused for now on digital products and customer journeys. The company says it has also explored using them to gauge reactions to physical products, such as brand and packaging.
The underlying research draws on computational cognitive science, continual learning and custom memory systems modeled on how people store information — work Talluri said the company plans to publish and partly open-source in the coming months.
While other startups are working on agent-based simulation and automated testing of user interfaces, what sets Primitive Labs apart, Talluri said, is the focus on human alignment. That means building agents that faithfully represent a specific product’s users, and making that a standard layer of how software gets built. He described the key measure as behavioral fidelity, or how closely an agent’s choices track human decisions.
Asked whether the startup will keep a chair empty when it gets an office, in the Amazon tradition, Talluri didn’t hesitate. “100%,” he said. And yes, he said, they’ll be envisioning an agent sitting there.
KredosAI, a Seattle-area startup that uses AI and behavioral science to help companies chase down late consumer payments, raised $7 million in a new funding round led by BMW i Ventures, the independent venture capital arm of automaker BMW Group.
The company, founded in 2021 by former T-Mobile executives Balaji Sridharan and Dave Thoms, is based in Issaquah, Wash. It focuses on the period after a bill is overdue but before the account gets sent to collections or written off. Its technology is able to tailor the wording, timing and channel of each overdue message based on a customer’s account history.
The premise, Sridharan said, is that most people aren’t being nefarious in their tardiness but are dealing with something more mundane, such as a forgotten due date, a short-term cash crunch, or possibly some kind of frustration with the service.
“The majority of consumers who go late on payment actually want to pay,” he said. “There’s a very small subset of people that are fraudsters, but most of them want to pay.”
New investors Motley Fool Ventures and Walter Ventures joined existing backers Okapi Venture Capital, StartFast Ventures, SaaS Ventures and Stout Street Capital in the Series A round. Total funding to date for the company is a little over $10 million.
The BMW connection came through an introduction from an existing investor, Sridharan said. Having an automaker’s venture arm behind it matters, he added, as KredosAI moves deeper into auto lending.
Subprime auto-loan delinquencies have climbed to their highest levels since the 1990s. Lenders, Sridharan said, weigh the problem much the way telecoms do — balancing the cost of recovering a payment against the value of keeping the customer. That overlap, along with BMW’s footprint in the car business, made its venture arm a logical fit.
KredosAI works with large enterprises, including some in the Fortune 50, though it doesn’t name most of them publicly. It got its start in telecom, which speaks to its roots: Sridharan and Thoms met at Bellevue-based T-Mobile. Sridharan spent eight years there, first running corporate strategy and later the carrier’s IoT unit, following an earlier stint at McKinsey. Thoms has spent much of his career in credit and collections at telecom and financial-services firms.
Watching T-Mobile wrestle with millions of past-due accounts each month, they came to think there was a better way to handle the conversation with a customer who’d fallen behind.
To decide what to send, the software weighs a customer’s account characteristics (how often they’ve been late before, their average balance, how long they’ve been a customer) while steering clear of off-limits signals like age. It reaches people through text, email and most recently RCS, along with AI voice agents the company began adding over the past year.
The company says the approach delivers notable improvement: across its customers, it reports cutting write-offs by 11.5% and lifting customer lifetime value by 13.6% compared with conventional collections. It says its platform has handled more than 200 million customer interactions over the past two years, with revenue growing more than sixfold in that span.
KredosAI is also a partner of FICO — the analytics firm best known for the FICO credit score — and integrates its technology into the FICO Platform, the software banks and other large companies use for credit decisions and collections.
The company competes with a range of collections-software players, including larger, more established Symend, a Calgary-based company that also uses behavioral science to interact with late-paying customers. The field also includes online debt collectors and companies selling older collections software.
The company has about 25 employees, roughly eight of them in the Seattle area.
Sridharan said the funding will go toward sales and marketing, further product development around agentic AI and voice agents, and eventually international expansion. He expects to roughly double headcount over the next year, to 50 people or more.
The additional funding, he said, “gives us a bit of fuel to go to market a little more aggressively than we have in the past.”
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