Venture funding ticked up modestly last quarter as investor appetite showed signs of renewed energy, bolstered by a steady drumbeat of AI enthusiasm, a rebound in M&A activity, and renewed IPO hopes.
Global startup funding reached $91 billion in Q2 2025, according to Crunchbase data — an 11% increase year over year but 20% drop quarter to quarter. While still far below the frothy peaks of 2021, H1 2025 marks the strongest half-year for venture investment globally since the first six months of 2022, signaling tentative recovery in the private markets.
The gains we saw weren’t evenly distributed, however. North America logged the largest surge, led by blockbuster AI deals. In Europe, Germany surpassed the U.K. as the top venture market for the first time in more than a decade, and in Latin America, Mexico topped Brazil for the first time since 2012.
We’re also seeing sustained momentum in startup M&A activity, with acquisitions of venture-backed companies crossing $100 billion in the first half of 2025 — a 155% jump year over year — per Crunchbase data.
Let’s take a closer look, with eight charts from Crunchbase News’ Q2 venture reports that illustrate the major startup and VC trends midway through 2025.
M&A more than doubles as appetite grows for big deals
Crunchbase tracked 918 announced global startup acquisitions in H1 2025, a 13% increase in deal count compared to the first half of 2024.
By dollar volume, the increase was substantial, with just over $100 billion worth of disclosed-price startup purchases in the first half of 2025 — a staggering 155% increase YoY — as companies showed a willingness to write big checks for strategic buys, especially in the AI infrastructure and cybersecurity categories.
Among the blockbuster deals in the first half of the year were Google’s planned $32 billion Wiz purchase — slated to be the largest startup acquisition on record — and OpenAI’s $6.5 billion purchase of Jony Ive’s AI device startup Io.
Other top deals in H1 included Moveworks’ $2.85 billion acquisition by ServiceNow; accounts payable platform Melio’s $2.5 billion sale to Xero; and electronic health record software provider Modernizing Medicine’s majority stake sale to Clearlake Capital Group at a reported $5.3 billion valuation.
North America claims indisputable lead, fueled by AI
North America continues to be the indisputable leader in startup funding, accounting for an astonishing 70% of global funding in H1.
Overall, investors poured $145 billion into seed through growth-stage rounds for U.S. and Canadian companies in the first six months of the year, per Crunchbase data. That’s a 43% gain year over year, and the highest half-year total in three years.
The U.S. AI sector once again led the way, with nearly $90 billion of the region’s first-half total going to startups working on artificial intelligence.
Meta’s $14.3 billion June investment in Scale AI led as the largest funding deal in Q2. Other big deals included a $2.5 billion Series G for defense tech unicorn Anduril Industries, a $2 billion financing for GenAI startup Safe Superintelligence, and a $900 million Series C for AI coding company Anysphere.
IPO optimism also lifted spirits, with debuts by fintech companies Circle and Chime seen as bellwethers for a potentially reawakening exit market.
Asia and China continue slump despite cyber and AI bright spots
Investment in Asia-based startups hit a multiyear low in H1 2025, offset slightly by a bump in Q2, Crunchbase data shows.
China posted the region’s largest funding decline last quarter, with just $5.1 billion in reported funding. The lackluster quarter comes amid an extended period of declining startup investment in the country, driven by factors including a paucity of IPO and M&A exits.
Overall, venture funding to Asia-based startups totaled $26.2 billion in H1 — down about a third year over year.
Country-by-country performance was mixed: India held steady quarter to quarter, while Israel hit a two-year quarterly high.
Across Asia, late-stage rounds ticked up slightly in Q2 on a sequential basis, but were down more than 26% year over year. Early-stage, which has held steady for the past several quarters, remained flat in Q2.
Europe sees steady funding amid lead country shuffle
Funding to Europe startups plateaued quarter over quarter in Q2 and fell 24% from the peak second quarter in 2024, Crunchbase data shows.
Notably, Europe’s late-stage funding lagged and pulled the continent’s share of global venture funding from 19% in the first half of 2024 to just 13% in the first six months of this year.
Still, large deals in Q2 went to companies across a handful of sectors, led by a $1.25 billion round to Turkey-based mobile game developer Dream Games, with other bigger rounds in industries as varied as defense, quantum computing, energy, robotics, aerospace, therapeutics, fintech and software services.
Germany showed relative strength, leapfrogging the U.K. last quarter as the region’s top venture market.
Another bright spot: Startup M&A in Europe also showed strength, totaling $7.2 billion across 172 exits in Q2.
Latin America rises on Mexico’s strength
Venture funding in Latin America rose 13% quarter over quarter and 16% year over year, led by a burst of investment in Mexico, which surpassed Brazil as the region’s top destination for VC dollars for the first time since 2012.
Mexico’s Q2 funding totals were led by digital bank Klar’s $170 million raise, and $127 million for Kavak, which operates an online pre-owned car marketplace.
Other notable deals in LatAm last quarter include:
$120 million for New Wave, a Rio de Janeiro, Brazil-based startup developing “sustainable and low-cost” technologies for the mining-metallurgical sector;
$48 million for Chilean fintech Toku; and
$45 million for Mexico e-commerce aggregator Merama.
Cybersecurity, AI and fintech surge globally
Beyond geography, sector trends underscored where investor enthusiasm is returning.
Global venture funding to cybersecurity surged to $4.9 billion in Q2, pushing H1 to the highest half-year level in three years, according to Crunchbase data. Among the biggest deal recipients were: Cyera (AI-enabled data security platform, $540 million), Cato Networks (cloud security provider, $359 million) and Chainguard (software supply chain security, $356 million).
Fintech posted modest gains, with H1 2025 global venture funding up 5.3% year over year to $22 billion, a potential signal that investor confidence is returning after 2023’s reset. A handful of high-profile IPOs in the first six months of the year — including Circle and Chime — may signal a reopening of exit paths and reignite VC interest in the sector. One investor we spoke with, Camila Vieira of QED Investors, said “there’s a real sense of momentum returning, particularly in B2B infrastructure, AI-native fintech and climate-aligned financial services.”
All in all, AI remains the consistent thread, appearing in nearly every top deal across sectors and regions.
Looking ahead: Momentum builds, but caution remains
With startup M&A holding strong and the IPO markets inching open, the venture rebound shows signs of holding steady. But with the majority of the funding growth tied up in a single sector — AI — and dominated by a handful of large deals, the recovery also feels somewhat fragile.
Consider that nearly a third of all venture capital investment in Q2 went to just 16 companies — many of them in the AI sector — that raised funding rounds of $500 million or more. Whether we’ll see the spoils of the AI gold rush trickle down to the rest of the startup ecosystem remains to be seen.
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Illustration: Dom Guzman
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