NXTGEN

VC Trends Q1’25

Global VC funding for the quarter is up and down, at the same time. Up on value, but down (again) on the number of deals. Deal volume shrinks to its lowest, with pre-seed and seed stage deals hardest hit.

This brief analysis looks at total deal value and deal volume across the venture landscape for Q1’2025. It focuses specifically on some of the main threads and themes during the quarter and is based on some of the key highlights from KPMG’s Venture Pulse Report.

Global VC funding: $126.3B for the quarter, up nearly 7%

In Q1 2025, global VC investment saw a bump up in deal value (up to $126.3 billion), surpassing last quarter gains, and was again primarily driven by mega-deals in the AI sector. The KPMG report notes that this growth was propelled by eight mega-deals (transactions exceeding $1 billion) with OpenAI’s $40 billion raise standing out as the largest. 

Deal volume is down quarter on quarter.

The report further highlights that “despite the uptick in investment value, deal volume declined quarter over quarter as many VC investors pause to evaluate where the market shifts were temporary and to preserve capital in light of ongoing IPO exit delays.” 

This is a delicate time for investors navigating public market volatility, considering potential market shifts that may affect early stage deals. 

In fact, co-investor @ColeRotman from DST Global, interestingly points out in a post on X how there has been a sharp decline in the number of deals year to date, even by some of the most prominent investors.

Regional Breakdown: Americas, Europe, Asia, and Others

The regional breakdown with a few noteworthy points:

The Americas

    • Led by the US, VC investment rose to a 13-quarter high in Q1 2025, with $94.5 billion raised across 3,331 deals. 
    • Despite the surge in deal value, deal volume declined for the fourth straight quarter.  
    • Potential US tariffs have unsettled some nerves, and VC investment across Canada and Mexico down quite considerably

Europe 

    • VC investment in Europe held steady at R18 billion for the quarter across 1,883 deals, but again deal volume dropped, both q-o-q and y-o-y.
    • In fact, in Q1 ’25 deal volume dropped to a nine-year low with only later stage VC holding steady, otherwise pre-seed/seed, early VC and even venture growth saw deal volumes decline.
    • Whilst Europe battles with regulation and its concern with AI, the EU Commission has shown a strong commitment to advanced AI technology with its €200 billion InvestAI program.

Asia

    • Regionally, Asia’s total dollar value and deal volume has declined both q-o-q and y-o-y, mainly because there has been a complete slowdown of investment in China into venture capital. China’s share of investment is down 53% Y-o-Y and 45% on last quarter.
    • India’s share of investment has remained steady at $2.4 billion for the quarter while deal count actually increased.
    • Australia and Japan, however, whilst values were also consistent Y-o-Y, deal volume for both regions declined in this last quarter, down between 36% and 11% respectively.

Deal sizes for pre-seed, seed and early stage venture

Two new charts introduced in this quarter looks at the global median deal size for early stage and measures the change in percentages q-o-q for these early stage deal sizes. 

We think this will be helpful to our readers to look at standard deal sizes across series and measure the change in percentages for each region to take into account regional movements and current trends.

Deal sizes and what’s moved this quarter

  • Pre-seed deal sizes jumped considerably; pre-seed in the Americas was up 25% to $1M, and Asia jumped up from $400K to $700K per deal ticket.

  • Thereafter the Americas deal sizes saw increases of 10% (seed), 15% (series A) and  5.7% (series B).

  • European deals were largely flat for angel and pre-seed stages and saw increases of 26.3% (seed), 12.7% (series A) and 8.1% (series B).

  • Asian deal sizes from seed stage onwards were largely flat q-o-q, with the exception of series A deal sizes which dropped $500K in ticket size down to $5.5M per deal.