Atoms Are Back

For years the smart money said software eats everything. This week the numbers said something else: atoms are back.

Carta’s State of Private Markets for Q3 2026, published Nov 5, says hardware startups on Carta raised nearly $34 billion in 2026 through Q3 — more than double the first three quarters of 2025. Hardware startups at seed and Series A tend to raise larger rounds and reach higher valuations than other sectors.

The same report says companies on Carta raised $49.3 billion across 1,179 rounds in Q3, more than $100 billion over two quarters — but deal count fell 21% year over year. More money, fewer rounds. And AI’s share of seed and Series A cash slipped to 44%, down from 48% in 2025, even as AI took a record 57% of late-stage capital.

Two rounds announced this week are the bet in action. Phaze raised an $8.75 million seed on Nov 4, led by a16z — remote access to powerful computers for people and AI agents, from the founders who built Parsec. High-end workstations cost upwards of $10,000 and often sit idle; Phaze turns them into shared infrastructure. Cosmoserve Space raised a $6 million seed on Nov 5, led by Rebright Partners — soft robotic systems that capture dead satellites and orbital debris. Its first test flew in July and the capture petals did not open; the company diagnosed the thermal release problem, fixed it, and raised anyway.

The shape of a hardware raise: the round follows the demo, not the other way around. Build the thing before you raise on it — and if it breaks, say what broke and what you changed.

Sources

About Ken McArthur

Ken McArthur is the founder of ConnectLab.live, an AI relationship-intelligence and warm-intro platform that helps founders who are raising find the funds that fit and the people who can introduce them, and helps fund managers connect with the founders they back. He was recently accepted into Harvard Business School Foundry. He also writes Raise Smarter, a daily newsletter on what's really moving in early-stage fundraising. Ken challenges us to realize we ALL have an impact, whether we want to or not, on thousands of people we touch in our day-to-day lives, and he shows that simple things make a HUGE difference. ConnectLab.live grew out of that belief. Connection is the currency of the 21st Century, and the right introduction can change a company's future. Long before ConnectLab, Ken was the popular host of live events that brought together top-level marketers, entrepreneurs, business owners, corporations and non-profit organizations to build multi-million dollar joint venture relationships. He has managed product launches ranked in the top 400 sites on the Internet and is regularly asked to speak at leading marketing events. He created AffiliateShowcase.com, a pioneering affiliate program search engine and directory. He also founded the MBS Internet Research Center, which conducted the world's largest survey ever attempted on creating and launching successful information products. Ken was the official mentor for Sterling Valentine as he took his launch from zero to over $100,000 in less than 8 days, a proof of concept documented in Info Product Blueprint. Today he puts that same skill for connecting people and launching ideas to work for founders and the investors who back them.

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