StartEngine's Own Late-Stage Share Book Reaches 84% AI, With One Line Driving Nearly All Growth

StartEngine, Inc. reported that the late-stage private company shares it holds on its own balance sheet grew to $21,279,030 at June 30, 2026 from $13,990,161 at December 31, 2025, and that two artificial-intelligence categories now account for 84.3% of that book.

AI Software rose to $15,940,263 from $8,797,502 and AI Chips to $2,006,909 from $1,689,039. Together they represent $17,947,172 of the $21,279,030 total, against 75.0% six months earlier. A third AI line, AI Vehicles, carried $143,187 at year-end and zero at June 30.

The disclosure appears in the industry table accompanying the Investments-Private note of the company's Form 10-Q for the quarter ended June 30, 2026, filed August 10 under accession 0001104659-26-093341. The figures are recorded at cost, not fair value, and describe shares held by the parent company rather than the composition of any fund sold to investors. AltStreet's full platform review of StartEngine, including the principal-trading mechanics between the parent and the SE Funds, is at https://altstreet.investments/platforms/reviews/startengine

What changed

1. The StartEngine Private book grew 52.1%, to $21,279,030 from $13,990,161, over the six months ended June 30, 2026.

2. AI Software alone increased by $7,142,761, which is 98.0% of the $7,288,869 total increase in the book.

3. Concentration in AI Software and AI Chips rose to 84.3% of holdings from 75.0%, while eight other industry lines declined and three appeared or grew.

One line item supplied nearly all of the growth

The industry table lists fifteen categories. Of the $7,288,869 by which the book grew over the half, AI Software accounted for $7,142,761 — 98.0% of the increase. AI Chips added a further $317,870.

Three other lines grew or appeared: Energy from zero to $826,875, Blockchain Technology from $57,200 to $565,115, and Banking from zero to $135,851. Those three combined added $1,470,641.

Eight lines declined over the same period: Space Technology to $559,820 from $1,031,907, Prediction Markets to $723,575 from $843,750, Robotics to $85,515 from $270,509, Defense Technology to $10,134 from $298,254, Advanced Materials to $4,169 from $215,180, Medical Technology to $3,536 from $134,884, Sales Technology to $21,719 from $113,200, and AI Vehicles to zero from $143,187.

Rare Earth Materials at $375,375 and Software Development at $20,174 were unchanged at both dates.

The table reports cost basis, not valuation

The filing states that the Company purchases shares of venture capital backed, late-stage private companies and records the purchases at cost, and that each time it sells shares to an SE Fund it reduces its holdings by the cost basis of the sale.

That accounting convention determines how the table should be read. An increase in a line reflects shares purchased. A decrease reflects shares sold to an SE Fund at cost basis. Neither movement is a mark to fair value, and the table does not report gains, losses or impairment on these positions.

The distinction matters most for the eight declining lines. Defense Technology falling to $10,134 from $298,254 does not indicate that a defense position was written down by 96.6%. Under the stated policy it indicates that most of that position left the parent's balance sheet, which the filing attributes to sales to SE Funds.

The company describes each of these investments as small minority stakes in the underlying companies.

What the book is, and what it is not

The industry table describes shares held by StartEngine, Inc. at the balance-sheet date. It does not describe the holdings of the SE Funds that investors actually subscribe to, and it should not be read as the composition of any particular fund.

Under the model described in the filing, the parent acquires private company shares either directly or through special purpose vehicles, holds them, and after a period of time sells them to an SE Fund. The SE Funds are managed by StartEngine Private Manager LLC and advised by StartEngine Adviser LLC, an exempt reporting adviser, and their membership interests are sold to accredited investors under Regulation D and marketed by StartEngine Primary LLC, the company's broker-dealer subsidiary.

The parent states it takes principal risk in acquiring the shares and recognizes gross revenue on their sale to an SE Fund. In the six months to June 30, 2026 it purchased $51,219,398 of StartEngine Private stock and received $44,924,312 of proceeds from sales to SE Funds, against $46,855,942 and $40,981,661 in the prior-year half.

Read within that structure, the June 30 table is best understood as the inventory the parent was holding at that date — the shares already acquired and not yet sold onward — rather than a record of what investors currently own.

Why the concentration figure matters

Because the parent's inventory is the source from which SE Fund offerings are drawn, its composition is a forward-looking indicator of what accredited investors are likely to be offered next, even though it is not a statement about funds already sold.

At 84.3%, the concentration is materially higher than the 75.0% recorded six months earlier, and the increase was not achieved by trimming other sectors alone. AI Software grew in absolute terms by more than the entire book grew.

Investors evaluating an individual SE Fund should therefore confirm the specific underlying company and terms in that Series' own offering materials rather than inferring exposure from the parent's aggregate table. Concentration at the parent level and concentration within a given Series are different measurements.

AltStreet's full analysis of StartEngine's structure, including the principal-trading mechanics between the parent and the SE Funds, is available at https://altstreet.investments/platforms/reviews/startengine

The half also produced an operating loss

The same filing reports six-month revenue of $69,281,734 against $70,175,075 in the prior-year period, a decline of 1.3%. Gross profit fell to $18,834,986 from $22,310,956, a margin of 27.2% against 31.8%.

Total operating expenses rose 15.8% to $20,095,191, producing an operating loss of $1,260,205 against operating income of $4,964,084 a year earlier, and a net loss of $407,630 against net income of $4,995,352.

The discrete second quarter was profitable, with revenue of $44,232,043, operating income of $1,466,785 and net income of $1,827,274. The six-month loss is attributable to the first quarter, which recorded a net loss of $2,234,904.

Cash used in operating activities was $8,715,775, against $11,048,278 provided a year earlier. Cash and restricted cash ended the period at $24,210,976, of which $20,382,534 was unrestricted and $3,828,442 was segregated under Rule 15c3-3. Management states there is no substantial doubt about the company's ability to continue as a going concern, citing the unrestricted balance.

How to evaluate the structure

Three separate disclosures answer different questions about this business. The Investments-Private note and its industry table show what the parent holds and at what cost. The revenue-recognition policy explains why gross revenue on principal transactions is large relative to gross profit. The cash flow statement shows the working-capital effect of buying shares before selling them onward.

Investors should reconcile those sources rather than treating the revenue line as a measure of platform activity. AltStreet's due-diligence framework provides a primary-source workflow for examining offering terms, affiliated arrangements, fee layers and filing histories: https://altstreet.investments/due-diligence

Broader AltStreet coverage of private-markets platforms and structures is collected at https://altstreet.investments/categories/private-equity-private-markets

What the filing does not show

The industry table does not report fair value, unrealized gains or losses, or impairment on StartEngine Private holdings. Amounts are cost basis.

It does not name the underlying portfolio companies in any category, nor the number of positions within a category.

It does not disclose the composition of any individual SE Fund, or the holdings of funds already sold to investors.

It does not separate shares purchased during the period from shares sold to SE Funds during the period; only the opening and closing balances by industry are given.

The markup between the parent's cost basis and the price at which shares are sold to an SE Fund is not disclosed in this table, and the filing does not provide a per-Series breakdown of that spread.

The impairment line reported elsewhere in the filing, $606,429 for the six months, relates to shares received as payment for platform fees under Investments-Stock. It is a separate item from the Investments-Private book described here.

Filing limitations

All amounts are issuer-reported figures drawn from StartEngine, Inc.'s Form 10-Q for the quarterly period ended June 30, 2026. Interim results are not necessarily indicative of results for the full year, and the interim statements are unaudited.

Nothing in this article constitutes investment advice or a recommendation regarding StartEngine, any StartEngine Private Series, or any private-markets investment.