While many in the enterprise investing world are entering 2025 with a fairly optimistic view of startup prospects – reinforced by expectations of potential growth in the IPO and M&A markets – other aspects are also more likely to impact the funding environment. These include reduced regulation in some vibrant startup sectors (crypto!) and continued fervor around artificial intelligence.
AI is still king
Although there is debate about what the president-elect Donald Trumpthe second term will mean for the market, and the one thing no one is discussing is that artificial intelligence will proceed to dominate the VC world.
As of early December, AI startups have raised over $87 billion in 2024, based on Crunchbase data. This already far exceeds the 2023 total of just below $56 billion.
Overall, the momentum for AI investment is expected to proceed into 2025 as the technology improves pain points such as workflow and coding.
Yash Patelgeneral partner in an investment company Titanium ventureshe said he also sees advancements in agent-based AI – perhaps a reversal of the SaaS model and a greater focus on outcomes. An example could be an AI-powered construction contract platform that will not be a subscription model, but quite paid based on the variety of contracts it could complete.
Industries such as defense and environmental/agtech may experience significant disruption from AI, as well as data-intensive sectors such as healthcare.
Speaking of information, investors said they are going to proceed to observe corporations like NetSuite AND Salesforce 1 — organizations with huge amounts of information Artificial intelligence should be useful in very specific industries. This data could make these already big players even larger.
One thing is certain, AI is not going anywhere.
“I think in many cases you will see more reasonable startup valuations – with the exception of artificial intelligence,” he said Don Butlermanaging director w Thomvest Ventures.
Less regulation
Speaking of artificial intelligence, enterprise capitalists and others have said they imagine it is one of several industries that may profit from less regulation from the recent administration.
Other sectors such as fintech and energy – closely linked to artificial intelligence given the amount of energy these technologies eat – are also more likely to see an increase in transaction volume as regulations are loosened or clarified.
Then, after all, there is the biggest winner – cryptocurrency and blockchain.
Bitcoin exploded after Trump’s victory – surpassing $100,000.
While it’s unclear how high the market can grow, this may undoubtedly result in a renewed focus on Web3.
“You’ll see larger companies become more involved in Web3,” Patel said.
Trump appointed former in December PayPal executive David Sacks serve as a crypto and artificial intelligence czar. Sacks has been associated with the VC industry for a very long time and is a co-founder Craft venturesand has been a critic of regulation in the past.
Of course, some industries may lose from all the changes. Most point to scrub energy and electric vehicles as the two aspects almost certainly to suffer under the recent administration.
Nevertheless, VCs, advisors and others in the industry seem cautiously optimistic about what the recent 12 months will bring – even while admitting that there is at all times an unknown.
“The venture ecosystem will be in a better place next year than it was in 2024.” – Patel said.