Global venture capital funding came in at ? billion in the second quarter of 2025, down 17% quarter over quarter. The headline fall masks a more nuanced picture: if you exclude the first-quarter outlier from ´OpenAI´, overall activity held steadier. The US remained the dominant market, capturing 64% of global funding and helping to offset weaker activity elsewhere. Applied artificial intelligence again drew the largest bets and became a primary driver of deal value.
Regional patterns diverged sharply. Europe cooled as macroeconomic uncertainty, elevated interest rates, and thin IPO windows weighed on investor appetite. China saw subdued funding amid capital constraints. India stood out as a bright spot, with investors returning to fintech and mobility plays that signal renewed confidence in scalable technology models. Seed-stage deal sizes in many markets rose, buoyed by outsized rounds such as ´Thinking Machines Lab´s´ ? billion financing. At the same time late-stage deal sizes showed an apparent decline; that shift largely reflects normalization after ´OpenAI´s´ very large round in the prior quarter rather than a structural collapse of late-stage interest.
Corporate and corporate venture capital activity remained broadly stable. Corporates and CVCs accounted for about 36% of total VC deal value, sustaining support for capital-intensive and hardware-oriented opportunities alongside software. Generative artificial intelligence funding accelerated further: funding in the first half of 2025 already exceeded the full-year total for 2024. Software and artificial intelligence companies now represent roughly 45% of overall venture funding. While foundation models and large language model initiatives still capture the largest pools, development tools recorded the fastest quarterly funding growth, pointing to a gradual shift toward infrastructure and building blocks for next-generation products. For investors and founders the immediate implications are clear: expect continued concentration of capital in US-led ecosystems and in companies tied to generative artificial intelligence, while regional winners will depend on macro stability, exit market health, and the ability to scale capital-efficient business models.
