The startups attracted $ 91.5 billion in financing Venture Capital in the first quarter, as The latest report From the Pitchbook data provider. This number not only exceeds the allocation of the previous quarter by 18.5%, but also is the second highest quarterly investment in the last decade.
Despite this seemingly positive message, Kyle Stanford, conducting the Venture Capital analyst in Pitchbook, appears to be the most bears in the VC transaction, since he began to cover this market 11 years ago.
Source of Stanford’s negativity? Damaged expectations that 2025 will bring significant outings, creating a cycle in which IPO and large acquisitions would generate a lot of money for investors – and founders – who would then direct a lot of money to finance the startup. After all, this is the road of Silicon Valley.
But the variability of the stock market and fears of recession caused by President Trump’s tariff policy derailed these hopes. Startups do not need to debut in public markets at a time when stock prices are depressed as a consequence of global economic problems.
“The liquidity that everyone has counted on does not look like it happened with everything that has happened in the last two weeks,” said Stanford Techcrunch.
Several corporations, including fintech clarna and physiotherapy Company Meling, have already translated or are apparently consideration delaying their IPO in connection with market turbulence.
As for the strong sum of transactions in the first quarter, Stanford said that the record didn’t paint the full image of investors’ excitement for startups.
From $ 91.5 billion collected by US startups in the last quarter stunning 44% was invested in only one company: Openai round of $ 40 billion. Pitchbook also stated that nine other corporations collecting $ 500 million or more, including $ 3.5 billion Anthropica and ISOMORFIC LABS round $ 600 million, constituted an additional 27% of the total transaction value.
“These offers really mask the challenges that many founders go through,” said Stanford. “I think that there are many companies that will have to come to terms with rounds down or be purchased too big discounts.”
Investors and analysts predict the widespread fall of startups since the ZIRP era ended in 2022 and many failed, but other starts have reduced costs, and the strong economy allowed them to develop, even if their growth rate dropped below investors’ expectations. But, as we reported earlier, they persist with the thread, and 2025 forecast that this shall be one other difficult 12 months to shut the startup.
“If there is a recession, they lose a lot of their revenues and growth,” which might force them to sell at the dollar centuries or get out of business, said Stanford.
Startups and investors sought 2025 for a market return, but as a substitute of a potentially tougher economy can speed up the end of many startups.