Q2 2025 U.S. Venture Capital Report: Big Bets, Bigger Standards

The venture capital landscape in Q2 2025 tells a story of increasing selectivity and rising stakes. While overall deal volume dropped compared to the previous quarter, the underlying trends reveal a market that’s becoming more sophisticated and demanding. Investors are writing fewer checks, but those checks are getting significantly larger ; and they’re only going to companies that can demonstrate real traction and clear paths to growth.

This shift toward quality over quantity is reshaping everything from deal sizes and valuations to geographic concentration and sector preferences. At the same time, artificial intelligence continues its march toward complete dominance of the mega-deal landscape, while traditional sectors adapt to new investor expectations. Perhaps most telling of all, venture capital firms themselves are struggling to raise money from their own investors, creating a feedback loop that’s making the entire ecosystem more selective at every level.

Here’s what the data reveals about where venture capital stood in the second quarter of 2025, and what it means for the road ahead.

Q2 2025 saw venture capital firms put $69.9 billion to work across about 4,001 estimated deals. While that sounds like a lot of money, it actually represents a steep 24.8% drop from the previous quarter. But here’s the thing; this decline isn’t really about investor appetite cooling off. It’s mostly because Q1 had OpenAI’s massive $40 billion funding round, which was so huge it would have made up 57% of Q2’s entire deal volume all by itself. Without that kind of mega-deal in Q2, the numbers naturally looked smaller by comparison.

Growth Stage Goes Big

Even with Q2’s relative dip, the growth stage of venture capital is having an absolutely massive year. When you combine Q1 and Q2 2025, growth-stage companies pulled in $83.9 billion across 499 deals in just the first half of the year. If that pace keeps up, we’re looking at potentially >$150 billion in growth-stage funding for the full year, which would blow past the previous record of $91.6 billion set during the crazy funding days of 2021.

Bigger Checks, Higher Standards

The venture capital world is getting pickier, but for the companies that make the cut, the rewards are substantial. Investors are writing much larger checks these days, but only for startups that can prove they have solid business fundamentals and a clear path to execution. It’s creating a kind of feedback loop. Founders who can demonstrate real traction are raising bigger rounds upfront to give themselves longer runways, especially since they know the next fundraise might be even tougher to secure.

The numbers show this trend playing out across every stage of funding. Median deal sizes jumped across the board in Q2 2025, with some pretty dramatic increases. Pre-seed rounds saw the biggest spike, climbing 42.3% compared to the same period last year. Series C rounds weren’t far behind with a 40.5% jump, and even seed-stage deals grew by 16.1%. These aren’t small adjustments, they represent a fundamental shift in how much capital investors are willing to deploy when they find the right opportunity.

The Squeeze on Smaller Deals

At the same time, smaller funding rounds are becoming an endangered species. Deals under $5 million now make up just 48.6% of all venture capital activity, down from 55.4% in 2024. That’s actually the lowest percentage we’ve seen in a decade. What this really means is that the bar for getting funded has moved higher. Investors are concentrating their money on fewer bets, but they’re making those bets much bigger. If you’re a startup that can show strong traction and a clear plan for growth, there’s more capital available than ever. But if you’re still figuring things out or don’t have the metrics to back up your story, finding that initial funding has gotten significantly harder.

AI’s Continued Takeover

The artificial intelligence theme isn’t just holding strong, it is completely dominating the big-money deals. In Q2 alone, five AI companies raised over $1 billion each, including Scale AI’s $14.3 billion round (the second-largest VC deal ever recorded), along with Safe Superintelligence, Thinking Machine Labs, Anduril, and Grammarly. When you look at the first half of 2025, AI deals made up 64.1% of all the money deployed and 35.6% of all deal activity. That’s a clear sign that investors aren’t just interested in AI, they’re betting big that it’s the future.

Healthcare: A Tale of Two Trends

Healthcare venture funding is showing some mixed signals in 2025. Overall activity is running behind where it was in 2024, but the deals that are happening are getting much bigger and more expensive. We’re seeing a clear shift toward later-stage funding; Series D and beyond deals are taking up a bigger slice of the pie, while seed-stage activity has dropped back to pre-2021 levels. It’s a sign that healthcare investing has become more selective, with investors preferring to back companies that have already proven their concept and gained some market traction.

The companies that are raising money are commanding premium prices. Healthcare startup valuations have hit their highest levels in a decade, and deal sizes keep climbing across the board. But there’s an interesting split happening within the sector. Traditional pharma and biotech funding is actually hitting some serious lows; investors seem less excited about the long development timelines and regulatory risks that come with drug development. Meanwhile, healthcare technology and systems companies are seeing growing interest, likely because they can show faster paths to revenue and clearer business models.

Tech: Fewer Deals, Bigger Bets

The broader tech sector is experiencing what you might call a “quality over quantity” moment. While valuations continue to climb, the actual number of unique deals is decreasing. Investors are being more selective about where they place their bets, but when they do invest, they’re writing much larger checks. This is especially true at the later stages, where Series B, C, and beyond rounds are seeing increased activity as investors double down on proven winners.

The billion-dollar deals are really doing the heavy lifting in 2025’s tech funding landscape. These massive rounds are pulling up all the averages and making the sector look more robust than it might actually be in terms of breadth. And here’s where AI comes back into the picture; the sky-high valuations that AI companies are commanding are inflating the average tech company valuation across the board. So while it might look like all tech startups are getting more expensive, the reality is that a relatively small number of AI-focused companies are driving most of that increase.

The Geographic Concentration Continues

Despite all the talk about remote work and distributed startups, venture capital is still heavily concentrated in the usual suspects. In Q2 2025, just four metro areas: the Bay Area, New York, Boston, and Los Angeles. They captured nearly half of all deals at 48.2% and an even more dramatic 72.3% of total deal value. That gap between deal count and deal value tells an important story: while startups everywhere are getting funded, the really big checks are still flowing to companies in these major tech hubs.

The concentration is pretty consistent across funding stages too. More than half of all deals in early stages happen in these four metros, which makes sense given the density of investors, talent, and established tech ecosystems in these areas. It’s only when you get to late-stage deals that the geographic spread starts to even out a bit, likely because mature companies have proven their models and can attract capital regardless of where they’re based.

This geographic clustering isn’t necessarily surprising, but it does highlight an ongoing challenge in the startup world. While technology has made it easier than ever to build a company from anywhere, accessing venture capital, especially the kind of large-scale funding that can accelerate growth, still benefits from being in close proximity to where the money is concentrated.

Valuations Hit Decade Highs as Investors Get Pickier

In Q2, the median US VC pre-money valuation rose YoY — consistent with the trend observed from 2023 to 2024. Notably, every series of the venture lifecycle, except Series D+, reached decade-high valuation medians, suggesting GPs are increasingly selective, backing fewer but higher-quality companies.

The LP Money Tap Slows to a Trickle

Venture capital firms are finding it much harder to raise money from their own investors these days. In the first half of 2025, VCs managed to pull together just $26.6 billion across 238 funds. If that pace continues for the full year, we’re looking at fundraising levels that would be among the lowest we’ve seen in a decade, a 33.7% drop compared to last year, which was already pretty weak.

The fundraising process itself has become a real slog. It’s now taking VC firms a median of 15.3 months to close their funds, up from 12.6 months in 2024. That’s the longest fundraising cycle we’ve seen in more than ten years. The reason is pretty straightforward: the limited partners (LPs) who invest in VC funds are still gun-shy after seeing poor returns from recent vintage years and dealing with their own liquidity crunches.

Emerging Managers Hold Their Ground, First-Timers Struggle

Newer VC firms (the ones that have raised a few funds but aren’t established players yet) are managing to stay afloat, though just barely. Their share of total capital raised actually ticked up slightly to 23.1% in Q2, and they’re still closing about 45% of all funds. It’s not great, but it suggests that LPs haven’t completely written off emerging managers, they’re just being a lot more careful about which ones they back.

First-time fund managers, however, are getting hammered. They only raised $1.8 billion across 44 funds in the first half of 2025, putting them on track for a 32% decline in capital raised and a 40% drop in the number of new funds. The few first-time managers who are managing to raise significant money (over $50 million) almost all have one thing in common: they’re spinouts from well-known, successful firms. Names like Sentinel Global, CIV One, and Cherryrock Capital are getting funded because their founding teams have pedigree and track records that LPs can point to. It’s a clear sign that in this tough fundraising environment, experience and proven results matter more than ever.

Below are some of the largest and most talked-about venture capital deals from the second quarter of 2025 in the US.

• Scale AI: Data labeling and AI infrastructure services for enterprise, industry: Artificial Intelligence, Data Annotation, raised $14.3B, valuation: undisclosed, investors: Meta.

• xAI: Next-gen AI systems company focusing on artificial general intelligence, industry: Artificial Intelligence, raised $10B, valuation: $24B, investors: Morgan Stanley, others undisclosed.

• Anthropic: Developer of responsible, steerable AI systems, industry: Artificial Intelligence, raised $3.5B, valuation: $18.4B, investors: Lightspeed Venture Partners, Salesforce Ventures, Alphabet.

• Infinite Reality: Metaverse and AI-driven immersive environments for media and commerce, industry: Metaverse, AI, raised $3B, valuation: $5.1B, investors: Sky Sports, T-Mobile Ventures, World Wrestling Entertainment.

• Anduril Industries: AI-powered defense systems, autonomous drones, and surveillance, industry: Defense Tech, Artificial Intelligence, raised $2.5B, valuation: $12.5B, investors: Founders Fund, Andreessen Horowitz, Spark Capital, 137 Ventures.

• Safe Superintelligence: AI safety research and superintelligence architecture, industry: Artificial Intelligence, raised $2B, valuation: $7B, investors: Greenoaks, Alphabet, Andreessen Horowitz.

• Thinking Machines Lab: Advanced research and commercialization of cutting-edge AI models, industry: Artificial Intelligence, raised $2B, valuation: $12B, investors: Founders from OpenAI, Google, Meta, Mistral AI.

• Figure AI: Creates general-purpose humanoid robots for labor markets, industry: Robotics, Artificial Intelligence, raised $1.5B, valuation: $2.6B, investors: Parkway Venture Capital, Align Ventures, Microsoft, NVIDIA, OpenAI, Jeff Bezos.

• Groq: Manufactures ultra-fast processors for AI workloads, industry: AI Chipmaking, raised $1.5B, valuation: $3B, investors: Kingdom of Saudi Arabia.

• Grammarly: AI-powered writing and communication tools, industry: AI, Software, raised $1.15B, valuation: $13B, investors: undisclosed.

• Cyera: Data security and compliance on enterprise scale using AI, industry: Cybersecurity, Artificial Intelligence, raised $540M, valuation: $2.2B, investors: Accel, Sequoia Capital, Lightspeed Venture Partners, Sapphire Ventures, Coatue.

• Runway: AI-powered creative and video content creation for media, industry: Generative AI, Media Tech, raised $308M, valuation: $1.5B, investors: Baillie Gifford, Fidelity, General Atlantic, NVIDIA, SoftBank.

• Perplexity: Conversational AI search engine, industry: Generative AI, Search, raised $510M, valuation: $2.5B, investors: Accel, IVP, NVIDIA, T. Rowe Price, Stanley Druckenmiller.

• Rippling: All-in-one platform for payroll, HR, and IT built on AI, industry: Enterprise Software, HR Tech, raised $450M, valuation: $11.25B, investors: Bedrock Capital, Coatue, Dragoneer, Greenoaks Capital, Kleiner Perkins, Sequoia Capital.

• SandboxAQ: AI and quantum-powered enterprise solutions for security, industry: Quantum Computing, Artificial Intelligence, raised $450M, valuation: $4B, investors: Section 32, T. Rowe Price, IQT, Paladin Capital.

• Plaid: API infrastructure for banking, payments, and financial apps, industry: FinTech, raised $575M, valuation: $14B, investors: not publicly specified.

• Ramp: Corporate expense management and operations automation, industry: FinTech, Expense Management, raised $200M, valuation: $7.65B, investors: General Catalyst, Founders Fund, Stripe, Citi, Sequoia Capital.

• Kalshi: Exchange for trading event outcomes, industry: FinTech, Financial Exchange, raised $185M, valuation: $1B, investors: Bond, Paradigm, Sequoia Capital, Multicoin Capital.

• Stash: Simplified investing and financial management for individuals, industry: FinTech, Personal Finance, raised $146M, valuation: $1.8B, investors: Union Square Ventures, Goodwater Capital, Coatue, StepStone Group.

• Digital Asset: Distributed ledger and smart contract platform for finance, industry: Blockchain, FinTech, raised $135M, valuation: $2B, investors: Citi, Goldman Sachs, Republic, BNP Paribas.

• Tennr: AI-driven health automation platform for medical documentation, industry: HealthTech, AI, raised $101M, valuation: $700M, investors: Andreessen Horowitz, Foundation Capital, Google Ventures, ICONIQ Capital, IVP.

• Dataminr: Real-time risk and event detection using AI, industry: Artificial Intelligence, Information Technology, raised $100M, valuation: $4.1B, investors: Fortress Investment Group, NightDragon.

• Astronomer: Data pipeline orchestration with Apache Airflow, industry: Data Infrastructure, Machine Learning, raised $93M, valuation: $790M, investors: Bain Capital Ventures, Bosch Ventures, Salesforce Ventures, Venrock.

• Empathy: Mobile support for loss management and bereavement, industry: HealthTech, Software, raised $72M, valuation: $620M, investors: General Catalyst, Index Ventures, LocalGlobe, Adams Street Partners.

The above deals represent a cross-section of the largest, most innovative, and influential venture rounds of Q2 2025, covering artificial intelligence, fintech, robotics, healthcare, and beyond. The investor landscape is dominated by major VCs and leading corporate partners, especially in AI and hard tech.