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Global venture capital (VC) funding came in at $109 billion in the second quarter of 2025, dropping 17% quarter over quarter. But take out OpenAI’s massive deal in the first quarter, and funding held firm.
The US captured 64% of global funding, as its strong VC ecosystem withstood broader volatility. Applied AI was the standout with several major bets.
In contrast, Europe’s VC activity cooled. Ongoing macroeconomic uncertainty, high interest rates, and sluggish IPO markets weighed on sentiment. China’s funding was also subdued due to capital pressures. India, however, emerged as a bright spot. Investors showed strong interest in fintech and mobility, reflecting renewed confidence in scalable tech.
Average seed-stage deal sizes increased, powered by outliers such as Thinking Machines Lab’s $2 billion funding round. While late-stage deal sizes dipped on the surface, this largely reflects a normalization following OpenAI’s outlier $40 billion funding round last quarter.
Corporate- and corporate venture capital (CVC)-backed activity was largely flat. Consistent with recent years, corporates and CVCs participated in around 36% of total VC deal value, reflecting a steady appetite for generative AI, hard tech, and, increasingly, capital-intensive plays.
Generative AI funding continues to grow rapidly, with funding in the first half of 2025 already surpassing the 2024 total. Software and AI companies now account for around 45% of VC funding. While foundation and large language models still draw the bulk of funding, development tools saw the highest quarterly funding growth, signaling a gradual shift.
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First published in agosto 2025