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Global venture capital (VC) funding came in at $109 billion in the second quarter of 2025dropping 17% quarter over quarter. But take out OpenAI’s massive deal in the first quarterand funding held firm.
The US captured 64% of global fundingas its strong VC ecosystem withstood broader volatility. Applied AI was the standout with several major bets.
In contrastEurope’s VC activity cooled. Ongoing macroeconomic uncertaintyhigh interest ratesand sluggish IPO markets weighed on sentiment. China’s funding was also subdued due to capital pressures. Indiahoweveremerged as a bright spot. Investors showed strong interest in fintech and mobilityreflecting renewed confidence in scalable tech.
Average seed-stage deal sizes increasedpowered by outliers such as Thinking Machines Lab’s $2 billion funding round. While late-stage deal sizes dipped on the surfacethis 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 yearscorporates and CVCs participated in around 36% of total VC deal valuereflecting a steady appetite for generative AIhard techandincreasinglycapital-intensive plays.
Generative AI funding continues to grow rapidlywith 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 fundingdevelopment tools saw the highest quarterly funding growthsignaling a gradual shift.
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Published in August 2025