Will there be a revival in the mergers and acquisitions market next yr, and with it the IPO plan?
What about the tech labor market, where tens of hundreds of staff will lose their jobs again in 2024 in the United States alone?
Every yr we make some predictions about the startup world for the coming yr. Sometimes we’re right – like last yr, when we accurately predicted that IPOs would not come back in 2024. Sometimes we’re flawed – including last yr, when we expected the AI craze to cool down (lol).
So, with a pinch of salt, here are the top five trends we’ll be seeing in the latest yr.
M&A rebound?
There is much optimism that the change in administration in the federal government will usher in a slow M&A environment that many consider overly regulated.
According to Crunchbase, M&A deals involving VC-backed startups have slowed over the past few years data — which significantly impacted VCs’ ability to generate returns on their LPs and due to this fact raise latest funds.
Many VCs are hoping for change Federal Trade Commission AND US Department of Justice will speed up M&A activity after years of an overzealous regulatory environment that has quashed deals like Amazonproposed to take over the company value $1.4 billion iRobot.
While the big deals that were featured in reviews make headlines, other smaller, hidden deals fell through because they became costlier and deemed not value the money and hassle.
But while changes to regulatory agencies are inevitable, concerns remain about how friendly the economy and the latest administration will likely be to each technology and M&A.
Increased tariffs – what the President-elect Donald Trump promised – may cause inflation to rise again sharply and raise rates of interest. Additionally, while Trump has talked about reducing regulation, he has also been critical of Big Tech’s power. His appointment of Gail Slater – a frequent critic of Big Tech – as leader Department of Justiceantitrust efforts likely gave Silicon Valley a break.
Nevertheless, many are hopeful that the M&A market will recuperate – and with it the variety of IPOs – and that liquidity from past investments will flow freely.
Will 2025 be the yr the IPO returns?
After one other slow yr in 2024 for latest technology listings, IPO markets are expected to speed up in 2025. A yr ago, the outlook was not optimistic. What has modified?
“I think there is a lot of confidence in the market. Stock markets are trading at all-time highs,” he said Ran Ben-Tzur legal advice office Fenwick and West. “There has been a return to a focus on growth, which is obviously great for technology.”
So far, two well-known firms have signed up: based in Sweden Klarnaa “buy now, pay later” supplier who has confidentially submitted an application for Securities and Exchange CommissionAND Cerebras Systemsan AI chip company that filed in September.
“In 2025, we should see companies start testing public markets across all sectors – fintech, cyber, AI and SaaS, among others,” he said. Nina Achadjianpartner in Index venturesvia e-mail.
“We will start to see momentum at the beginning of the year, and as the year goes on we will really accelerate,” predicted Ben-Tzur, who saw early momentum in 2024 that then faded.
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Artificial intelligence and blockchain can equal big money
Artificial intelligence funding continues to skyrocket. More than half of last month’s $28 billion in global enterprise funding went to AI firms, with funds raking in AI firms in the whole lot from robotics to marketing and healthcare.
Generative AI firms that build models similar to xAI AND Anthropicseemingly pick up huge rounds at will, while many apps and agentic AI also seem to have no problem picking up still large rounds.
Just last month, based in San Francisco Writermaker of high-speed AI applications and agents for workflows in healthcare, retail and financial services, closed a $200 million Series C that valued its enterprise generative AI platform at $1.9 billion.
Some, nonetheless, are looking for a cross between the next big thing in technology – artificial intelligence – and Web3, its last big thing.
More specifically, what role could blockchain play in helping the AI economy grow, especially with so many startups creating AI agents? Some investors see significant potential between them – especially as blockchain and Web3 come back into people’s consciousness as cryptocurrency prices explode.
AI agents can work even faster on blockchain because security is already built in – not something that was added later, as was the case with our current Web 2.0 platforms. Performance can make AI more stable and dynamic, while also being more user-friendly and cheaper for enterprises.
It’s very early days at the intersection of blockchain and artificial intelligence, but it’s actually something value watching.
The mental recession will proceed
At the height of the 2021 unicorn boom, heavily funded startups went on a hiring spree. Thanks to this, qualified employees could enjoy each well-paid jobs and a certain degree of skilled mobility in areas from programming, through marketing, to project management.
Of course, it didn’t last. As of 2022, the situation has worsened, with dozens of one-time top-tier staff furloughed and those still employed increasingly selecting to stay put. It’s a little difficult to judge where we are in the cycle at once, but based on anecdotes and media reports reportingit seems to be harder than usual to find a well-paid job in a mature technology company or a funded startup.
We predict that in 2025, the job market will proceed to be difficult in many areas that were once hot for tech hiring. Mature startups and public firms, in particular, will likely be vigilant about overcharging costs and avoid the sorts of efforts that were once undertaken illegally.
It may very well be argued that generative AI, where funding and employment remain high, is an exception. The counterargument, nonetheless, is that these are firms developing technologies best suited to replacing human labor in other white-collar industries. So what’s good for them will not be good for the remainder of us when it comes to our careers.
Space and defense technologies will flourish
The times when Silicon Valley was hypersensitive to the development of military technologies are clearly over.
By mid-November, defense technology startups — defined as those operating in the military, national security and law enforcement sectors — had already raised nearly $3 billion in 85 rounds, according to Crunchbase. (*5*)data. This represents a latest record for enterprise investing in the industry, surpassing the $2.6 billion raised by such startups in the full yr of 2022.
Many aspects contribute to the tech industry’s latest comfort with defense technology. As conflicts spread from Ukraine to the Middle East, governments are scrambling to incorporate the most advanced artificial intelligence technology into their weapons and defense systems. Under the latest Trump administration, U.S.-China tensions are likely to remain heated, especially regarding China’s ambitions for Taiwan.
There is significant overlap between defense, aerospace and industrial technologies – sectors that are likely to have strong support from the White House and allies similar to SpaceX CEO Elon Musk.
The PentagonThe proposed budget for 2025 is $850 billion and includes large funds for unmanned systems and artificial intelligence. Influenced by the Ukrainian-Russian conflict Europe also spends billions on research into defense technologies, including latest smart weapons powered by artificial intelligence, more advanced drones and higher radar technology.
For 2025, we anticipate that enterprise investment in defense technologies will proceed to grow, helped by government spending and friendlier relations between Silicon Valley and D.C.