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Economic Times
6 days ago
- Business
- Economic Times
US AI startups see funding surge while more VC funds struggle to raise, data shows
IANS US startup funding surged 75.6% in the first half of 2025, thanks to the continued AI boom, putting it on track for its second-best year ever, even as venture capital firms struggled to raise money, a report from PitchBook on Tuesday showed. Startup funding in the first six months of 2025 jumped to $162.8 billion, marking the strongest performance since the same period in 2021 - the historic peak for venture capital activity. That previous surge came during the era of the Zero Interest Rate Policy (ZIRP), when central banks slashed rates to stimulate economic activity during the COVID-19 pandemic, sending capital into higher-risk assets including venture capital. This year's boom has been driven largely by major AI investments and bold bets from big tech companies, a wave of activity set off by the debut of ChatGPT in late 2022. In the past three months alone, $69.9 billion was invested in U.S. startups. Standout deals included OpenAI's $40 billion round and Meta's $14.3 billion purchase of a stake in Scale AI. Other AI deals exceeding $1 billion in the second quarter included significant investments in Safe Superintelligence, Thinking Machine Labs, Anduril, and Grammarly. These deals underscore sustained investor conviction in the AI sector, which accounted for 64.1% of the total deal value and 35.6% of the deal count in the first half of the year. "I think it's downstream of the fact that OpenAI and Anthropic continue to grow at unbelievable rates," said Davis Treybig, partner at VC firm Innovation Endeavors. "If there's even a chance you could see that sort of progress in other domains, whether it's robotics, protein folding models, world models or video models, then there's a lot of people who are going to want to invest a lot of money." Harder for VC funds In contrast, U.S. venture capital fundraising continued to face headwinds, with just $26.6 billion raised across 238 funds in the first half of the year. This subdued environment represents a 33.7% year-over-year decline in capital raised, extending the downward trend from 2024. It is also taking fund managers longer to close new vehicles, with the median time stretching to 15.3 months by the second quarter of 2025 - the longest in over a decade, data shows. The disconnection from the startup market reflects concerns from limited partners on the asset class due to recent underperformance and liquidity constraints. A rebound in exit activity, including IPOs and M&A, has brought a sense of optimism for the remainder of the year. Exit activity in the second quarter was up 40% from last year, as a loosening antitrust environment and a thawing IPO market boost confidence. Sectors aligned with President Donald Trump's priorities such as AI, national security, defense technology, fintech and crypto dominated IPO interest in the second quarter, the report noted. "The good news is we're starting to see the tide turn," said Lucas Swisher, co-head of growth investing at tech investment firm Coatue. "IPOs like Coatue portfolio companies Hinge Health and Coreweave have been well received by the market, and there are a dozen companies filed now." Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. As deposit ground slips under PSU banks' feet, they chase the wealthy If data is the new oil, are data centres the smokestacks of the digital age? Can Grasim's anti-competition charge against Asian Paints stand amid intense war Can Indian IT's 'pyramid' survive the GenAI shake-up? Stock Radar: Igarashi Motors showing signs of momentum after 30% drop from highs; time to buy? These mid-cap stocks with 'Strong Buy' & 'Buy' recos can rally over 25%, according to analysts Multibagger or IBC - Part 15: Strong margins & no loans. Is this the auto sector's dark horse? Get ready for volatility with the big, better & experienced. 7 large-caps from different sectors with an upside potential of up to 39%
Time of India
6 days ago
- Business
- Time of India
US AI startups see funding surge while more VC funds struggle to raise, data shows
Academy Empower your mind, elevate your skills US startup funding surged 75.6% in the first half of 2025, thanks to the continued AI boom, putting it on track for its second-best year ever, even as venture capital firms struggled to raise money, a report from PitchBook on Tuesday funding in the first six months of 2025 jumped to $162.8 billion, marking the strongest performance since the same period in 2021 - the historic peak for venture capital previous surge came during the era of the Zero Interest Rate Policy (ZIRP), when central banks slashed rates to stimulate economic activity during the COVID-19 pandemic, sending capital into higher-risk assets including venture year's boom has been driven largely by major AI investments and bold bets from big tech companies, a wave of activity set off by the debut of ChatGPT in late 2022. In the past three months alone, $69.9 billion was invested in U.S. deals included OpenAI's $40 billion round and Meta's $14.3 billion purchase of a stake in Scale AI deals exceeding $1 billion in the second quarter included significant investments in Safe Superintelligence, Thinking Machine Labs, Anduril, and deals underscore sustained investor conviction in the AI sector, which accounted for 64.1% of the total deal value and 35.6% of the deal count in the first half of the year."I think it's downstream of the fact that OpenAI and Anthropic continue to grow at unbelievable rates," said Davis Treybig, partner at VC firm Innovation Endeavors. "If there's even a chance you could see that sort of progress in other domains, whether it's robotics, protein folding models, world models or video models, then there's a lot of people who are going to want to invest a lot of money."In contrast, U.S. venture capital fundraising continued to face headwinds, with just $26.6 billion raised across 238 funds in the first half of the year. This subdued environment represents a 33.7% year-over-year decline in capital raised, extending the downward trend from is also taking fund managers longer to close new vehicles, with the median time stretching to 15.3 months by the second quarter of 2025 - the longest in over a decade, data disconnection from the startup market reflects concerns from limited partners on the asset class due to recent underperformance and liquidity constraints.A rebound in exit activity, including IPOs and M&A, has brought a sense of optimism for the remainder of the year. Exit activity in the second quarter was up 40% from last year, as a loosening antitrust environment and a thawing IPO market boost aligned with President Donald Trump's priorities such as AI, national security, defense technology, fintech and crypto dominated IPO interest in the second quarter, the report noted."The good news is we're starting to see the tide turn," said Lucas Swisher, co-head of growth investing at tech investment firm Coatue. "IPOs like Coatue portfolio companies Hinge Health and Coreweave have been well received by the market, and there are a dozen companies filed now."
The Star
15-07-2025
- Business
- The Star
US AI startups see funding surge while more VC funds struggle to raise, data shows
FILE PHOTO: A message reading "AI artificial intelligence", a keyboard, and robot hands are seen in this illustration taken January 27, 2025. REUTERS/Dado Ruvic/Illustration/File Photo (Reuters) -U.S. startup funding surged 75.6% in the first half of 2025, thanks to the continued AI boom, putting it on track for its second-best year ever, even as venture capital firms struggled to raise money, a report from PitchBook on Tuesday showed. Startup funding in the first six months of 2025 jumped to $162.8 billion, marking the strongest performance since the same period in 2021 — the historic peak for venture capital activity. That previous surge came during the era of the Zero Interest Rate Policy (ZIRP), when central banks slashed rates to stimulate economic activity during the COVID-19 pandemic, sending capital into higher-risk assets including venture capital. This year's boom has been driven largely by major AI investments and bold bets from big tech companies, a wave of activity set off by the debut of ChatGPT in late 2022. In the past three months alone, $69.9 billion was invested in U.S. startups. Standout deals included OpenAI's $40 billion round and Meta's $14.3 billion purchase of a stake in Scale AI. Other AI deals exceeding $1 billion in the second quarter included significant investments in Safe Superintelligence, Thinking Machine Labs, Anduril, and Grammarly. These deals underscore sustained investor conviction in the AI sector, which accounted for 64.1% of the total deal value and 35.6% of the deal count in the first half of the year. "I think it's downstream of the fact that OpenAI and Anthropic continue to grow at unbelievable rates," said Davis Treybig, partner at VC firm Innovation Endeavors. "If there's even a chance you could see that sort of progress in other domains, whether it's robotics, protein folding models, world models or video models, then there's a lot of people who are going to want to invest a lot of money." HARDER FOR VC FUNDS In contrast, U.S. venture capital fundraising continued to face headwinds, with just $26.6 billion raised across 238 funds in the first half of the year. This subdued environment represents a 33.7% year-over-year decline in capital raised, extending the downward trend from 2024. It is also taking fund managers longer to close new vehicles, with the median time stretching to 15.3 months by the second quarter of 2025 - the longest in over a decade, data shows. The disconnection from the startup market reflects concerns from limited partners on the asset class due to recent underperformance and liquidity constraints. A rebound in exit activity, including IPOs and M&A, has brought a sense of optimism for the remainder of the year. Exit activity in the second quarter was up 40% from last year, as a loosening antitrust environment and a thawing IPO market boost confidence. Sectors aligned with President Donald Trump's priorities such as AI, national security, defense technology, fintech and crypto dominated IPO interest in the second quarter, the report noted. "The good news is we're starting to see the tide turn," said Lucas Swisher, co-head of growth investing at tech investment firm Coatue. "IPOs like Coatue portfolio companies Hinge Health and Coreweave have been well received by the market, and there are a dozen companies filed now." (Reporting by Niket Nishant in Bengaluru and Krystal Hu in New York; Editing by Lincoln Feast.)
Axios
14-07-2025
- Business
- Axios
Why Big Tech's dominance could be a double-edged sword for the market
Thank Big Tech for helping power the S&P 500 to its eighth record high of the year. That dominance could also be the market's biggest vulnerability. Why it matters: Nearly half of the S&P 500's earnings growth this year is coming from tech. That kind of concentration raises the stakes — and the risk — if the sector falters. What they're saying:"The whole vibe on the current tech stonks conversation reminds me ... a lot of dot com before the crash," wrote Patrick Moorhead, founder of Moor Insights & Strategy, in a post on X. "Instead of [Nvidia] we were piling money into [Cisco]," Moorhead wrote. Catch up quick: The turn-of-the-century dot-com bubble — when hype drove a surge in tech stocks, which burst when earnings didn't justify valuations — is a cautionary tale that investors would be wise to remember. Cisco is one of the poster children for the bubble, and often draws comparisons to Nvidia, which just became the first $4 trillion company. At its peak valuation, Cisco traded at 200 times forward earnings. Nvidia is less than 40 right now, with the profit growth to back it up. 💭 Thought bubble, from Axios Pro Rata author Dan Primack: It's not just public companies, either. Venture capitalists mostly agree that they overspent and overvalued between 2020 and 2022, leading to a glut of stranded unicorns. 2025 is looking like a replay, with stratospheric startup valuations that often eclipse the ZIRP era. Median U.S. VC deal valuations are higher so far in 2025 than during the peak, save for a slight decrease for Series D+ rounds, per PitchBook. What we're watching: Sky-high startup valuations mirror the eye-popping valuations of some Big Tech firms — the Magnificent Seven ETF (MAGS) trades at 73 times earnings. Still, tech stocks could go up another 10% in the second half of the year thanks to the tailwind of AI, according to Wedbush analyst Dan Ives. Yes, but: Elevated prices don't necessarily mean we're in bubble territory. Unlike the early 2000s, today's tech giants have earnings and cash flow to back up their valuations, Sanctuary Wealth's chief investment strategist Mary Ann Bartels tells Axios. The bottom line: The question is whether the tech rally is happening because of investors hyping up stock prices, or because of strong earnings that demand these higher multiples.
Bloomberg
16-06-2025
- Business
- Bloomberg
Odd Lots: Jim Egan on the Mortgage Gap That's Dividing America
Somehow, the American consumer remains quite strong. Despite higher interest rates, tariffs, general economic uncertainty and so forth, people are continuing to spend. And yet there are some pockets of weakness that you can observe, especially if you look at delinquency data for various types of credit. But even here the patterns aren't totally obvious, as it doesn't break down nicely among prime vs. non-prime borrowers. But there is one important divide: Do you have a ZIRP-era mortgage or not? According to Morgan Stanley housing strategist Jim Egan, there is a massive difference in how strained people are for those who locked in their housing costs prior to 2021 vs. those who didn't. People with ZIRP-era mortgages are benefiting from low stable payments (which have declined on a real basis), as well as broad equity accumulation. Those who didn't are much more strained in their finances. We discuss how this is playing out, as well as the state of the housing market more broadly, which has seen rising inventories, and the possibility for an overall downturn in prices nationwide.
