AI Drives Global Venture Funding Surge in Q2 2025, Reaching $91 Billion

US AI startups see funding surge while more VC funds struggle to raise, data shows

July 15 (Reuters) - U.S. startup funding surged 75.6% in the first half of 2025, thanks to the continued AI boom, putting it on track for its second-best year ever, even as venture capital firms struggled to raise money, a report from PitchBook on Tuesday showed. Startup funding in the first six months of 2025 jumped to $162.8 billion, marking the strongest performance since the same period in 2021 -- the historic peak for venture capital activity. That previous surge came during the era of the Zero Interest Rate Policy (ZIRP), when central banks slashed rates to stimulate economic activity during the COVID-19 pandemic, sending capital into higher-risk assets including venture capital. This year's boom has been driven largely by major AI investments and bold bets from big tech companies, a wave of activity set off by the debut of ChatGPT in late 2022. In the past three months alone, $69.9 billion was invested in U.S. startups. Standout deals included OpenAI's $40 billion round and Meta's (META.O), opens new tab $14.3 billion purchase of a stake in Scale AI. Other AI deals exceeding $1 billion in the second quarter included significant investments in Safe Superintelligence, Thinking Machine Labs, Anduril, and Grammarly. These deals underscore sustained investor conviction in the AI sector, which accounted for 64.1% of the total deal value and 35.6% of the deal count in the first half of the year. "I think it's downstream of the fact that OpenAI and Anthropic continue to grow at unbelievable rates," said Davis Treybig, partner at VC firm Innovation Endeavors. "If there's even a chance you could see that sort of progress in other domains, whether it's robotics, protein folding models, world models or video models, then there's a lot of people who are going to want to invest a lot of money." HARDER FOR VC FUNDS In contrast, U.S. venture capital fundraising continued to face headwinds, with just $26.6 billion raised across 238 funds in the first half of the year. This subdued environment represents a 33.7% year-over-year decline in capital raised, extending the downward trend from 2024. It is also taking fund managers longer to close new vehicles, with the median time stretching to 15.3 months by the second quarter of 2025 - the longest in over a decade, data shows. The disconnection from the startup market reflects concerns from limited partners on the asset class due to recent underperformance and liquidity constraints. A rebound in exit activity, including IPOs and M&A, has brought a sense of optimism for the remainder of the year. Exit activity in the second quarter was up 40% from last year, as a loosening antitrust environment and a thawing IPO market boost confidence. Sectors aligned with President Donald Trump's priorities such as AI, national security, defense technology, fintech and crypto dominated IPO interest in the second quarter, the report noted. "The good news is we're starting to see the tide turn," said Lucas Swisher, co-head of growth investing at tech investment firm Coatue. "IPOs like Coatue portfolio companies Hinge Health and Coreweave have been well received by the market, and there are a dozen companies filed now." Reporting by Niket Nishant in Bengaluru and Krystal Hu in New York; Editing by Lincoln Feast. Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence Krystal Hu Thomson Reuters Krystal reports on venture capital and startups for Reuters. She covers Silicon Valley and beyond through the lens of money and characters, with a focus on growth-stage startups, tech investments and AI. She has previously covered M&A for Reuters, breaking stories on Trump's SPAC and Elon Musk's Twitter financing. Previously, she reported on Amazon for Yahoo Finance, and her investigation of the company's retail practice was cited by lawmakers in Congress. Krystal started a career in journalism by writing about tech and politics in China. She has a master's degree from New York University, and enjoys a scoop of Matcha ice cream as much as getting a scoop at work. Niket Nishant Thomson Reuters Niket Nishant reports on breaking news and the quarterly earnings of Wall Street's largest banks, card companies, financial technology upstarts and asset managers. He also covers the biggest IPOs on U.S. exchanges, and late-stage venture capital funding alongside news and regulatory developments in the cryptocurrency industry. His writing appears on the finance, business, markets and future of money sections of the website. He did his post-graduation from the Indian Institute of Journalism and New Media (IIJNM) in Bengaluru.

Q2 Global Venture Funding Climbs In A Blockbuster Quarter For AI And As Capital Concentrates In Larger Companies

Global venture funding ticked up year over year in Q2 2025, with a greater concentration of capital into the largest funding rounds compared to a year ago, Crunchbase data shows. Q2 funding reached $91 billion, up from $82 billion in Q2 2024, per Crunchbase data. However, quarter-over-quarter funding fell from $114 billion in Q1, which marked the highest quarter for funding since Q3 2022. Global funding has increased year over year for the past three quarters, driven primarily by billion-dollar-plus rounds into AI research labs as well as data and infrastructure providers in the sector. While Q2 capital concentration into the largest rounds was not quite as high as in the prior two quarters, it was still well above historical proportions. Close to a third of all capital in Q2 went to 16 companies that raised funding rounds of $500 million or more, including a $14.3 billion funding to Scale AI, per Crunchbase data. In another blockbuster quarter for AI funding, $40 billion -- or around 45% of global funding -- went to the sector, with more than a third invested in Scale AI alone. All in all, the past three quarters saw record funding to the AI sector. Foundation model companies raised $5.5 billion last quarter. That included two AI research labs -- Thinking Machines Lab and Safe Superintelligence -- both a year old or less, raising $2 billion each. Other large rounds in the AI sector were raised by Anduril Industries ($2.5 billion), Grammarly ($1 billion), Anysphere ($900 million) and Helsing ($694 million). Healthcare and biotech companies raised $14.8 billion in venture funding in Q2, making it the second-largest sector for the quarter. The financial services sector, the third-largest, raised $10.8 billion, per Crunchbase data. Along with a greater concentration of capital in larger companies, the U.S. predominated, with $60 billion -- or two-thirds of venture capital -- going to U.S.-based companies in Q2. H1 2025 grew H1 2025 posted the strongest half-year for venture capital since the first half of 2022. A total of $205 billion was raised through mid-year, up 32% from H1 2024. More than a third of H1 funding -- $70 billion -- went to just 11 companies that raised rounds of $1 billion or more. Q2 2025 was the second-strongest quarter for startup M&A dollar volume since 2021, with $50 billion in reported exit value. Last quarter's total was down from $71 billion in Q1, although that was the quarter in which Wiz was acquired by Google in the largest-ever acquisition of a private company at a price tag of $32 billion. OpenAI was the most-active and largest acquirer by amount in Q2, buying four companies including Jony Ive's Io for $6 billion and Windsurf for $3 billion. In Q2, 18 companies were acquired for more than $1 billion, Crunchbase data shows. Half of these companies were acquired by public companies, and three by private equity firms. Six of the acquisitions were by private venture-backed companies including OpenAI. They also included Databricks' acquisition of open source SQL database Neon. Late-stage gains All the gains year over year were seen in late-stage funding in the second quarter. Funding reached $55 billion, up more than 53% year over year, and down quarter over quarter by close to a third, Crunchbase data shows. Early-stage flat Early-stage funding was flat quarter over quarter in Q2 reaching $26 billion across 1,600 companies with the largest rounds at this stage peaking around $220 million. Larger Series A and B rounds were raised in quantum, energy, self driving, therapeutics and satellite technology, as well as human resources and chat software services, with Series B rounds predominating. Year-over-year funding was down as Q2 2024 saw multiple billion-dollar Series B fundings to AI companies. Seed up Seed funding reached $10.3 billion in Q2. Thinking Machines raised 20% of that with a $2 billion seed round that marked the largest on record at that stage, per Crunchbase data. If not for the Thinking Machines round, seed funding would be flat quarter over quarter and down year over year. (Seed funding totals typically increase over time, as many seed rounds are added to the Crunchbase dataset after the close of a quarter.) M&A relief So far in 2025, the proportion of funding to AI has continued to increase, along with funding concentrated in larger rounds. As more funding is committed to private companies, the good news is that M&A is up for a second quarter in a row, rivaling peak M&A amounts in 2021. Methodology The data contained in this report comes directly from Crunchbase, and is based on reported data. Provisional data reported is as of July 3, 2025. Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year. Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price. Glossary of funding terms Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less. Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million. Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the "Series [Letter]" naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round. Technology growth is a private-equity round raised by a company that has previously raised a "venture" round. (So basically, any round from the previously defined stages.)

North America Venture Funding Surged In First Half Of Year As Q2 Held Strong

Funding to North American startups surged in the first half of 2025, fueled by investor enthusiasm around artificial intelligence. Overall, investors poured $145 billion into seed through growth-stage rounds for U.S. and Canadian companies in the first six months of the year, per Crunchbase data. That's a 43% gain year over year, and the highest half-year total in three years. Total investment in the second quarter, meanwhile, was down sequentially due to a drop in late-stage financing. However, we did see a rise in seed and early-stage funding, as charted below. We also saw the pace of dealmaking slow a bit in Q2. Deal counts were down quarter over quarter at seed, early stage and late stage, as shown below. Once again, enormous rounds for generative AI companies were the main reason investment totals held high. In Q2, that included Meta's $14.3 billion June investment in Scale AI, the second-largest round of the year after SoftBank's record-breaking $40 billion March financing for OpenAI. In addition to vast sums going into startups, the second quarter was also a robust period for exits. This included high-valuation IPOs from Circle and Chime, as well as multiple acquisitions for $1 billion or more. Below, we take a closer look at investment activity by stage and review some of the larger exits. Late stage attracts the most money, so we'll start there. For the second quarter, investors put $41.5 billion into later-stage and technology growth investments, which is the third-highest quarterly total in three years. Round counts also held high, with an estimated 239 later-stage and tech growth deals in Q2. That equates to the second-highest tally of the past five quarters. A handful of megadeals pushed the investment totals up, led by Meta's Scale AI investment, a strategic and financial deal that includes founder Alexandr Wang joining the social media giant. Other big deals included a $2.5 billion Series G for defense tech unicorn Anduril, a $2 billion financing for GenAI startup Safe Superintelligence, and a $900 million Series C for AI coding company Anysphere. Also noteworthy: We did see a sequential dip after Q1. However, that was to be expected in the quarter following OpenAI's unprecedented $40 billion financing. Early stage Early-stage investment also held up at historically high levels in Q2. In total, investors put $14.3 billion into early-stage companies, roughly flat with the prior quarter. Round counts ticked up a bit, though, hitting the highest point in four quarters. As usual, a few particularly large rounds contributed heavily to the Q2 early-stage funding totals. Standouts include a $200 million Series B for residential battery provider Base Power, a $186 million Series A for green steel producer Electra, and a $177 million Series A for drug developer Antares Therapeutics. Including that round, seed investment for the quarter totaled $5.9 billion, the highest level in three years, as charted below. While funding was up, seed-stage deal counts fell a bit in Q2, based on preliminary data. We expect that total to rise some over time, however, as it's common for some seed-stage deals to be added to our dataset weeks or months after they close. The median seed-stage financing was around $3 million last quarter, although we did see some deals that were much bigger. Besides Thinking Machines, larger ones this past quarter included a $100 million seed round for AI model tester LMArena, and a $77 million initial financing for aerospace and defense startup Amca. AI Given the dominant role of AI startups in attracting venture funding, we've also been breaking out the share of investment going to this area. For Q2, North America's AI-related startups pulled in $34.5 billion in total funding, showing continued heavy investor appetite for the space. While down from Q1, which had the massive OpenAI financing, it's still an impressive sum and the third-highest quarterly total to date. Exits The second quarter was also a fairly happening period for startup exits, including both IPOs and M&A deals. IPOs On the IPO front, the highlights for Q2 were the debuts of two heavily funded fintech unicorns: stablecoin pioneer Circle and digital banking provider Chime. Of the two, Circle made the biggest splash on public markets. The New York-based company priced IPO shares well above the projected range and saw its stock increase severalfold from there. Its recent market cap was over $50 billion. Chime has also performed well. Shares are still trading above the IPO price, and the San Francisco company had a recent market cap of more than $11 billion. Acquisition activity was also pretty lively in the just-ended quarter, with multiple big-ticket deals announced. Overall, most of the metrics we looked at for this past quarter and the first half of the year point to an upbeat funding scene and a receptive environment for startup exits. It's especially encouraging to see the IPO window opening up after a long dry spell. And with Figma expected to make its debut in coming weeks, the parade of closely watched unicorn IPOs looks far from over. So what could go wrong to dampen this rosy picture in coming months? Certainly there's plenty of risk factors, including a broader market pullback. For now, however, it looks like a bullish period in startup-land, particularly for those with compelling AI use cases. Methodology The data contained in this report comes directly from Crunchbase, and is based on reported data. Provisional data reported is as of July 3, 2025. Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year. Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price. Glossary of funding terms Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less. Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million. Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the "Series [Letter]" naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round. Technology growth is a private-equity round raised by a company that has previously raised a "venture" round. (So basically, any round from the previously defined stages.)

Global VC funding climbs to $91B in second quarter as AI leads investment trends - SiliconANGLE

Global VC funding climbs to $91B in second quarter as AI leads investment trends Global venture capital funding showed renewed strength in the second quarter of this year, with total funding increasing to $91 billion, up from $82 billion in the same quarter of last year. That's according to a new report released today by market intelligence company Crunchbase Inc. The figure, though up year-over-year, was down from $113 billion in the first quarter, which was the highest quarter since the third quarter of 2022. However, Crunchbase notes that the second-quarter figure marks a continuation of robust activity driven by artificial intelligence and a strong appetite for so-called mega-rounds. Not surprisingly, interest in AI companies once again drove the VC market, with $40 billion in funding in the quarter, accounting for around 45% of the quarter's global total. Of the $40 billion raised by AI companies, more than a third went to a single company, Scale AI Inc., which raised $14.3 billion from Meta Platforms Inc. in June. The round was the second-largest single VC funding deal on record after OpenAI's $40 billion round in the first quarter. Behind the $40 billion raised by AI companies, the next highest were healthcare and biotech companies, which raised $14.8 billion in funding and financial services, which pulled in $11.3 billion. A key trend noted in the report was the concentration of capital in fewer, larger deals. Seventeen companies each raised $500 million or more in the second quarter, accounting for one-third of all capital raised. U.S.-based startups dominated the landscape, pulling in $60 billion -- two-thirds of all global VC funding for the quarter -- reflecting continued investor confidence in domestic innovation and scale. For the first half of 2025, total global venture funding hit $205 billion, up 32% from the first half of 2024, with more than $70 billion going to just 11 companies that raised $1 billion or more, reinforcing a funding environment that increasingly favors scale more than early-stage risk. In another positive sign for startups, merger and acquisition activity also surged. The second quarter saw $50 billion in disclosed deal value, the second-highest quarter for startup merger and acquisitions since 2021. Though that was down from $71 billion in the first quarter, which included Google LLC's $32 billion acquisition of Wiz Inc., the second quarter still saw 18 deals exceeding $1 billion in value apiece. OpenAI led the charge in acquisitions, buying four companies, including Jony Ive's io Products Inc. for $6 billion and Windsurf for $3 billion. Other notable deals included Databricks Inc.'s acquisition of open-source database Neon Inc. The general tone of Crunchbase's report was more positive than the first-look report from PitchBook-NVCA Venture Monitor released on July 3 discussing the same markets. Still, the venture capital market enters the second half of 2025 with strong momentum.