Global startup funding rose in Q2 2025 as AI mega-deals pushed venture totals up
A streak of high-profile acquisitions and a flicker of IPO activity helped stir the market.
In the second quarter of 2025, AI remained the consistent thread in startup funding, appearing in nearly every top deal across sectors and regions. The hype has moved well beyond headlines. It’s now turning into hard capital, pushing global startup investment into higher gear and breaking a long stretch of flatlining funding.
But, it wasn’t just AI driving momentum. A streak of high-profile acquisitions and a flicker of IPO activity helped stir the market. Enthusiasm is creeping back into the private markets, but it’s not yet clear if this is a broad recovery or a narrow surge propped up by a few outsized bets.
Global venture funding on the rise
Crunchbase data shows global venture funding hit $91 billion in Q2, up 11% year over year. That puts the first half of 2025 on track as the strongest since early 2022. And as expected, AI was the engine behind it.
Nowhere was that clearer than in North America, where nearly $90 billion flowed into AI startups. Meta’s $14.3 billion investment in Scale AI led the charge, followed by billion-dollar rounds for Anduril, Safe Superintelligence, and Anysphere. The U.S. alone pulled in $145 billion across all sectors in the first half, up 43% year over year. North America accounted for 70% of global venture funding, and most of it was chasing the same opportunity.
Mixed global performance
But while AI is lifting U.S. numbers, the global picture is more mixed.
In Europe, overall funding held steady, though it’s down from 2024’s peak. Germany quietly overtook the U.K. as the region’s top venture market, while standout deals landed in gaming, energy, and deep tech. Late-stage activity slowed, pulling Europe’s share of global funding down to 13%. Still, M&A remained active, with $7.2 billion in disclosed exits across 172 deals.
Latin America, meanwhile, saw a more subtle but meaningful shift. For the first time since 2012, Mexico overtook Brazil in funding totals, driven by major raises from Klar and Kavak. Overall, the region posted a 16% year-over-year gain—modest growth, but enough to suggest that investor interest is slowly returning.
Asia, in contrast, continued to lag. China posted just $5.1 billion in funding last quarter, weighed down by a lack of exits and ongoing investor caution. Across the region, venture funding fell by a third year over year. A few countries—India and Israel in particular—held their ground, but the broader slowdown remains hard to ignore.
Kelechi Edeh
Sector-specific recoveries and surging exits
Sector-wise, cybersecurity and fintech showed early signs of recovery. Cyber raised $4.9 billion in Q2, its best showing in years. Fintech ticked up to $22 billion in H1, helped by IPOs from Circle and Chime. These weren’t market-defining debuts, but they signalled that the window is no longer completely shut.
That same urgency is showing up in the exits. M&A came roaring back in H1, with 918 startup acquisitions tracked globally and over $100 billion in total deal value—a 155% year-over-year jump. Buyers are writing big checks again. Google’s planned $32 billion acquisition of Wiz would be a record-setter. OpenAI’s $6.5 billion buyout of Jony Ive’s AI hardware venture made headlines, as did ServiceNow’s $2.85 billion purchase of Moveworks.
Yet for all the movement, the recovery still looks lopsided. A third of all Q2 venture capital went to just 16 companies, nearly all of them in AI, each raising at least $500 million. The market is clearly back in motion, but the weight is being carried by a narrow slice of it.
What’s happening now feels like the beginning of a new phase, not the end of the downturn. Deals are getting done. Exits are real again. Capital is flowing. But most of the progress is still pinned to a single vertical. Whether that momentum spreads or stalls will define the rest of the year. Right now, AI is doing the heavy lifting—and the rest of the startup world is still waiting for the tide to rise.
