If I have to sum up 2025 in a few words, it would be AI, deeptech, megarounds.

As we entered into 2026, many of the leading organizations researching VC & startups issued their 2025 reports. So, I went through a few and summarised my findings below.

Overview

Funding came back in 2025, but has still not reached its peak in 2021.

In the US, total private investment reached $327.8B in 2025, up 66% year over year. The recovery was fast and heavily driven by late-stage AI rounds.

Europe recovered more slowly. Depending on methodology, total 2025 investment landed between $44B (Atomico) and $67.9B (CB Insights). Even at the higher figure, growth was modest at around 18% year over year, and still well below prior peaks.

The gap remains structural. The US now accounts for roughly two-thirds of global private tech investment. In GDP terms, US venture investment equals about 0.74% of GDP. Even Europe’s strongest region, the UK and Ireland, sits around 0.35%.

Europe’s recovery in 2025 was broad but modest. Every major hub grew year over year, but growth was driven by incremental increases rather than new breakout-scale hubs. London and Paris still dominate in absolute terms, while cities like Amsterdam and Madrid show the fastest relative growth off smaller bases.

Deal counts tell a different story

In 2025, the US recorded 12,084 venture deals. Europe recorded 7,132. Both are sharply down from 2021, when the US saw 18,756 deals and Europe 11,440.

This is one of the clearest signals in the data. More capital is flowing, but into fewer companies.

Median deal sizes increased in both regions. The US median reached about $4.0M, while Europe sat closer to $2.9M. That gap shows up at every stage, not just late stage.

Mega-rounds now define the market

Globally, 65% of all venture funding in 2025 came from mega-rounds over $100M. In the US, more than 40% of all venture dollars went to just four companies: OpenAI, Anthropic, Infinite Reality, and Anduril.

In Q4 alone, the US closed 132 mega-rounds totalling $93.9B. Europe closed 35, totalling $8.2B.

Fund formation and the “missing middle”

The venture landscape is no longer a smooth gradient from Seed to Growth. Instead, it has fractured into a market of two extremes: massive “outlier-hunting” institutions and a high volume of agile micro-funds. Europe and the US are diverging here, but in different ways.

• Europe’s Upward Migration: The European ecosystem is rapidly maturing and leaving the "micro-fund" era behind. The number of European funds sized at €100M or more has tripled since 2016, whereas the count of funds under €50M has actually declined. This shift has caused the median European VC fund size to more than triple over the last decade, rising from $32M in 2016 to $105M in 2025.

• The US Micro-Fund Surge: Data from Carta, which tracks 2,835 funds, shows a counter-trend at the earliest stages. Recent fund vintages (2024–2025) have seen the share of very small funds (1M–10M) spike to 40% of all new funds, a significant increase from 29% in 2017.
• The Hollowing of the Core in the US: The most striking evidence of hollowing out is found in the “middle” tier—the traditional Series A and B investors. Carta reports that funds sized between $25M and $100M have seen their share of the market collapse from 32% in 2017 to just 22% in 2025.
• Concentration at the Top: In the US, the top 10 largest funds now capture 33% of all capital raised. This creates a market where a tiny elite of “megafunds” controls the firepower for growth, while a massive tail of 950+ micro-funds competes for the same early-stage entry points.

Sector concentration, especially AI

AI dominated everything in 2025.

Globally, AI captured 48% of all venture funding, the highest share on record. Robotics emerged as a major beneficiary, reaching $40.7B in funding, up 74% year over year, driven by physical AI use cases rather than pure software.

The regional gap here is extreme. Depending on the source, the US invested between $119B and $146B into AI in 2025. Europe invested roughly $14B.

Beyond AI, Europe’s capital clustered around deep tech and digital infrastructure, which now make up 36% of European VC dollars, up from 19% in 2021. Climate continued to attract around 18% of European investment.

Outcomes: unicorns and exits

Europe crossed 400 unicorns in total, reaching 413, with 28 new unicorns created in 2025.

Global exit value reached $608B in 2025, up from $364B in 2024. The US accounted for more than half of that value. Europe represented about 10%, down from 16% the year before.

The IPO market stayed quiet, but M&A picked up. Carta reported three consecutive quarters of record M&A deal counts in 2025, which aligns with how boards are now planning liquidity.

Sources

​Atomico​

​Carta​

​CB Insights​

​Sifted​

What I take from all this

The market is not “back” in a broad sense. Funding recovered in 2025, but it did so in a much more concentrated way.

Capital is moving again, but into fewer companies and fewer hands. Mega-rounds are doing most of the work in the headline numbers, while overall deal activity continues to decline. Early-stage rounds still happen, but progressing through Series A and B is harder, slower, and more selective than it was before.

Europe continues to produce startups and talent across many hubs, and that showed up in year-over-year funding growth. But the structural gap in scale capital remains. As companies move past Series A, access to large, fast-moving pools of capital is still far more limited locally. By Series B, relying only on European capital is rarely enough.

What 2025 really did was make these dynamics clearer. Venture capital is now a market where outcomes depend more on whether a company fits into a much narrower set of capital priorities.

P.S. Next week I'll be sharing an update to my VC Tracker so keep an eye for an email from me.

Ciao,

Geri