The venture capital landscape in Q2 2025 shows cautious optimism for startups raising funds. Carta’s latest State of Private Markets report details key trends in valuations, deal activity, and regional shifts. In Q2 2025, startups on Carta raised $20.2 billion across 1,159 funding rounds.
This is a 10% drop in deal count from Q1’s 1,122 rounds, but capital raised only dipped 4% from $21 billion. Fewer deals are happening, but valuations are higher for those that close. Median pre-money valuations climbed at all stages.
Seed rounds reached $17.2 million, Series A hit $50 million, Series B was $112 million, and Series C was $220 million. These reflect year-over-year increases of 7.5%, 4.2%, 13%, and 15% respectively. VCs are prioritizing startups with strong fundamentals.
However, deal activity has declined sharply. The 1,159 rounds in Q2 are down 30% from Q4 2024’s 1,663. The slowdown is most pronounced at seed stage (down 25% YoY) and Series A (down 12% YoY).
Startups are stretching runways, with the median time between Series A and B now at 2.9 years.
Higher valuations amid fewer deals
Dilution has dropped across all stages though, indicating a more founder-friendly environment.
Series A rounds averaged 17.5% dilution, down from 17.9% in Q1. Series B was at 15.8%, down from 16.4%. But down rounds remained steady at 19.2%, far above the 2019-2022 average of 10%.
California still dominates with 48% of Q2’s VC dollars. But the Northeast gained ground at 27%, driven by Boston’s biotech and healthtech sectors. The South claimed 18% while the Midwest lagged at 7%.
AI and biotech are seeing investor enthusiasm. AI startups had median valuations of $25M at seed and $60M at Series A. Biotech also commanded premium valuations.
Hardware and infrastructure remain fairly strong, but consumer and retail struggled, raising just $1.1 billion. Q2 2025 suggests a venture market that is stabilizing but not yet booming. Valuations and founder-friendly terms signal confidence, but declining deal counts and longer fundraising timelines reflect more selectivity.
Founders must focus on efficiency and differentiation to secure capital in this competitive landscape.
