Global VC investment reached $101.05 billion across 7,356 deals in Q2’25. This is down from $128.4 billion in Q1’25, but still robust. The focus remains on AI and defencetech.
The Americas led with $72.7 billion, mostly from the U.S. Europe saw $14.6 billion across 1,733 deals, with a shift to larger, later-stage deals. Asia had $12.8 billion across 2,022 deals, slightly up from Q1’25. AI and defencetech were prominent, especially in the U.S. All $1 billion+ deals were in these sectors.
Fintech also saw renewed interest, with notable raises and IPOs. Deal volume hit a decade-low of 7,356, down from 9,314 in Q1’25. CVC funding dropped sharply from $82.7 billion to $50.2 billion.
The outlook for Q3’25 is cautiously optimistic. Investors are prioritizing larger, later-stage deals in innovative sectors. “What we’re seeing is a reallocation of capital, not a retreat,” said Conor Moore, Global Head of Private Enterprise at KPMG International.
AI startups have secured remarkable investments in the first half of 2025. OpenAI led with a $40 billion round, pushing its valuation to $300 billion. The deal requires OpenAI to become a for-profit entity by December 31, 2025.
Scale AI raised $14.3 billion from Meta for a 49% non-voting stake, boosting its valuation to $29 billion.
AI startups make unprecedented gains
Scale CEO Alexandr Wang will move to Meta to co-lead a new AI division.
Infinite Reality raised $3 billion, targeting brands and creators for innovative digital spaces. Safe Superintelligence focuses on AI alignment and safety. These investments show confidence in AI’s potential to revolutionize various sectors.
Industry giants like SoftBank and Meta are shaping the future AI landscape. Startup acquisitions have been robust in the first half of 2025. Acquirers made over $100 billion worth of disclosed-price purchases, a 155% increase from last year.
A third of this year’s spending comes from a planned purchase of a cybersecurity unicorn. Other startups were involved in multibillion-dollar acquisitions. The number of announced acquisitions has held steady in the mid-400s for the past three quarters.
The environment has become frenetic, particularly concerning AI. Despite the AI excitement, only around $15 million of disclosed-price acquisitions were for AI startups in the first half of this year. Enterprise software and healthcare sectors performed well.
The vast majority of startup acquisitions do not have a disclosed price, but they can collectively hold significant value. Examples include acquisitions of a crypto wallet startup, a school scheduling app, and a cloud security startup. There is still a large pipeline of funded companies considering exit options.
If current trends continue, more of them should achieve their goals through M&A.
