State Of – CB Insights Research

State of Insurtech Q2’25 Report

Chris Sekerak — Thu, 07 Aug 2025 15:00:51 +0000

Life & health (L&H) insurtechs dominated Q2’25, outraising property & casualty (P&C)-focused counterparts for the first time in nearly 4 years.

Individual coverage health reimbursement arrangement (ICHRA)-focused deals nudged L&H deal count upward, in part driving the highest deal share among US-based insurtechs since Q3’17.

Below, we break down the key takeaways from this quarter’s report, including:

Quarterly insurtech deal count dips below 100 again
Funding to P&C insurtechs plummets from Q2’21 peak
$100M+ mega-round deals lead to a surge in L&H insurtech funding
ICHRA startups capture nearly 20% of insurtech funding
US-based startups raise 3 in 5 global insurtech deals

Download the full report to access comprehensive data and charts on the evolving state of insurtech.

Quarterly insurtech deal count dips below 100 again

Insurtech deal count fell 9% quarter-over-quarter (QoQ), from 100 deals in Q1’25 to 91 in Q2’25. This decrease mirrors the broader venture environment, which also saw QoQ deal count decline by the same percentage.

Insurtech funding fell 21% QoQ, from $1.4B in Q1’25 to $1.1B in Q2’25 — also in line with the broader venture environment (-24% QoQ). However, unlike the rest of venture, insurtech has not experienced an AI-driven funding boom in recent quarters. The median venture deal size reached a new high of $3.5M in 2025 YTD, largely due to AI, while the median insurtech deal size has fallen by 19% to $4.2M over the same period.

Future implication: Given investors’ appetite for billion-dollar deals, insurance incumbents should prepare for potential disruption if an AI-focused insurtech secures major funding.

Funding to P&C insurtech falls 89% from Q2’21 peak

P&C insurtech funding plummeted from $1.2B in Q1’25 to $0.4B in Q2’25, falling well below the quarterly average of $0.8B over the past 2 years. As a result, P&C insurtech funding reached an 8-year low for the quarter (Q3’17 was the last quarter with less P&C insurtech funding).

The decline in P&C insurtech funding comes as no P&C insurtechs raised a Series D+ deal in Q2’25. Comparatively, 3 P&C insurtechs raised $100M+ mega-rounds across Series D+ deals in Q1’25.

P&C insurtech deal count also declined, falling from 72 in Q1’25 to 57 in Q2’25. Just 5 startups raised over half of the quarter’s P&C insurtech funding:

Ledgebrook, a professional liability MGA ($65M Series C)
Marshmallow, an auto insurer ($45M Series B)
Steadily, a landlord insurer ($30M Series C)
Orus, a small business insurance broker ($29M Series B)
Reserv, a third-party administrator ($25M Series B)

Even so, the P&C insurtech space did see its first IPO since Q2’24: Florida-based home insurer Slide Insurance completed its IPO at a $2.1B valuation.

Future implication: Despite the broader P&C funding decline, 3 of the top 5 P&C insurtech deals by funding amount in Q2’25 went to startups focused on small and midsize businesses (SMBs) — signaling that targeted growth opportunities within this segment remain attractive to investors.

$100M+ mega-round deals lead to a surge in L&H insurtech funding

L&H insurtech funding surged from $0.2B in Q1’25 to $0.7B in Q2’25, well above the quarterly average of $0.4B over the past 2 years.

Eight of the quarter’s top 11 deals went to L&H insurtechs, including both of the quarter’s $100M+ mega-round deals:

Gravie, a late-stage benefits platform ($144M Series G, and later amended to $150M in a filing on July 9)
Bestow, a former insurer that has since pivoted to become a software provider ($120M Series D)

L&H insurtechs raised 32 deals in Q2’25, an increase from 28 in the quarter prior. Unlike P&C insurtech, the median L&H insurtech deal size ($6.0M) is up in 2025 YTD.

69% of L&H insurtech deals went to US-based companies, the highest amount since Q3’15, underscored by a focus on health benefits across the US market.

In addition, L&H insurtech saw its first unicorn since Q2’22 and its first IPO since Q3’22:

Chapter, a Medicare navigation platform, became the quarter’s only new insurtech unicorn after raising its $75M Series D round at a $1.5B valuation.
Xiaoyusan Insurance, a broker focused on diversified life and health products, went public.

Future implication: As nearly half of the quarter’s top deals by funding amount went to health and benefits-focused startups, insurers should prioritize expanding employer-focused sales channels for the upcoming open-enrollment season.

ICHRA startups capture nearly 20% of insurtech funding

The US federal government established ICHRA plans in 2019, spurring commercial traction in recent years. Notably, an ICHRA platforms market has since emerged, with 5 startups raising $234M in equity funding across 5 deals in Q2’25:

Gravie ($144M, with participation from Atlantic Vantage Point)
Thatch ($40M, with participation from ADP Ventures and SemperVirens Venture Capital)
Venteur ($20M, led by American Family Ventures)
Zorro ($20M)
zizzl health ($10M)

An ICHRA is an alternative to traditional employer-selected health plans in the US, where employers instead allocate money for their employees to select their preferred qualified plan individually. ICHRA startups facilitate these payments, providing a central platform for benefits managers to administer their company’s ICHRA program.

The ICHRA platforms market is seeing favorable traction, evidenced by widespread increases in Mosaic score — measuring the overall health and growth potential of private companies — among companies assessed.

Most of these companies — Thatch, Gravie, Venteur, Remodel Health, Take Command Health, Zorro, StretchDollar, and BenefitBay — have Mosaic scores in the top 5% of all private companies tracked by CB Insights.

Future implication: Health insurers have the potential to increase enrollment by enhancing distribution channels to engage individuals employed by SMBs using ICHRAs.

US-based startups raise 3 in 5 global insurtech deals

60% of Q2’25 insurtech deals went to US-based startups — an 8-year high. Q3’17 was the last quarter to see a larger deal share among US-based startups (61%).

The increase was attributable to slight deal share increases across both L&H and P&C insurtech (from 68% to 69% and from 53% to 56%, respectively).

Within the US, Silicon Valley and the New York City metro areas led in Q2’25 insurtech deals — 11 and 9, respectively.

Europe-based startups raised 21% of Q2’25 insurtech deals: 6 of those deals went to France-based startups, and 5 went to UK-based startups.

Future implication: US insurtech deal share has increased each quarter since Q3’24, so companies should evaluate growth opportunities in global markets with less insurtech presence (i.e., less competition).

MORE INSURTECH RESEARCH FROM CB INSIGHTS

The post State of Insurtech Q2’25 Report appeared first on CB Insights Research.

Insurtech’s Midyear Review

ashley.tortorelli@cbinsights.com — Thu, 07 Aug 2025 13:37:21 +0000

The post Insurtech’s Midyear Review appeared first on CB Insights Research.

State of AI Q2’25 Report

Isabelle Selles — Thu, 31 Jul 2025 15:00:35 +0000

AI funding in the first half of 2025 has already surpassed 2024’s record full-year total. Deals are flowing to companies across the landscape, from AI infrastructure to defense tech to humanoid robots.

The fastest-growing startups and tech markets signal what’s next: the proliferation of agents and voice AI.

Below, we break down the top stories from this quarter’s report, including:

Massive deals continue to drive the AI funding boom
Consolidation is in full force in the AI market
AI revenue multiples reflect investor confidence in startups’ growth potential
Tech market deals signal a shift from infrastructure to applications
The fastest-growing genAI startups highlight the rise of voice AI

Download the full report to access comprehensive CB Insights data and charts on the evolving state of AI.

Massive deals continue to drive the AI funding boom

Funding to private AI companies across the globe reached $47.3B across 1,403 deals in Q2’25.

Combined with the record total for Q1’25 (inflated by OpenAI’s $40B raise), funding in 2025 ($116.1B) has already blown past 2024’s full-year total ($105.7B).

Together, the top 10 rounds accounted for 60% of the quarter’s funding total.

AI development players continue to lead the surge, with Scale (AI training data provider), xAI (model developer), and Thinking Machines Lab (model developer) raising some of the quarter’s largest rounds. Other notable raises went to defense tech startups Anduril ($2.5B) and Helsing ($693M) as geopolitical tensions drive interest in the sector.

The largest round of the quarter — Meta’s $14.8B investment in Scale for a 49% stake (with CEO Alexandr Wang joining Meta) — highlights big tech’s recent “quasi-acquisition” spree.

This trend sees tech leaders hiring away the teams and licensing the tech of promising startups — this allows big tech to avoid antitrust scrutiny while giving startups a way to return capital to investors. These deals enable them to move more quickly and be more selective with the talent they bring on than traditional M&A allows.

Deals in this pattern include:

Inflection AI (March 2024): Microsoft paid $650M in a licensing deal to Inflection AI while poaching its founders and key employees
Adept (June 2024): Amazon hired away Adept’s founders and many employees, with $330M+ going to licensing its tech
Character.AI (August 2024): Google poached the company’s founders and 20% of its team in a $3B licensing deal
Covariant (August 2024): Amazon hired robotics startup Covariant’s founders and a quarter of its staff while licensing the company’s models
Windsurf (July 2025): Google hired Windsurf executives and R&D employees in a $2.4B licensing deal

This activity reinforces the premium placed on AI talent in the current landscape.

Consolidation is in full force in the AI market

Despite broader M&A weakness across the venture market, AI is a bright spot.

M&A activity in AI reached record levels in Q2’25 at 177 deals — almost double the quarterly average of 89 since 2020.

The US was largely responsible for the jump, with acquisitions of US-based AI startups nearly doubling from 59 in Q1’25 to 104 in Q2’25. Europe followed with 46 M&A deals in the quarter.

Major US enterprise tech companies led activity as they embed AI across their offerings. Among the top 10 most active in the quarter were IBM (3 AI acquisitions), followed by Intuit, Nvidia, Databricks, and Salesforce (tied with 2 AI acquisitions each).

Earlier this year, we predicted enterprise tech heavyweights would compete for AI infrastructure dominance. AI optimization company CentML, acquired by Nvidia in Q2’25, was on our AI infrastructure acquisition target list.

Dive into 7 AI-related areas where we expect to see M&A activity this year, as well as high-potential acquisition targets for each, in the free report.

AI revenue multiples reflect investor confidence in startups’ growth potential

Leading AI companies that raised funding in Q2’25 did so at sky-high valuations — even by AI standards.

Model developer xAI raised $5B at a $75B valuation in June 2025, up from its $50B valuation in November 2024. With a projected $500M in 2025 revenue, that’s a 150x forward-looking multiple. Similarly, customer service AI agent startup Decagon raised $131M at a $1.5B valuation on just $10M in ARR.

AI startups are commanding a median 17.1x revenue multiple (based on FY 2024 revenue), but some far exceed that. Companies in the chart below command a median 50.1x multiple.

This indicates investor confidence and competition for the hottest startups. The big multiples are also a reflection of these companies’ growth potential: xAI projects $2B in revenue next year, while others on the list, like Glean, hit $100M ARR in 3 years.

Tech market deals signal a shift from infrastructure to applications

Among the 1,500+ tech markets that CB Insights tracks, those in the chart below saw the greatest number of AI deals in Q2’25.

Leading markets focus on specific industry or technical challenges — like industrial humanoid robots and coding AI agents — not general-purpose AI models.

In fact, LLM developers tied for 9th place with 11 other markets at 5 deals during the quarter.

This suggests investors increasingly expect greater value creation to come from applications than from infrastructure.

The fastest-growing genAI startups highlight the rise of voice AI

While funding may be concentrated among the largest players, opportunities in AI aren’t limited to those companies. Nearly 3 in 4 AI deals (72%) in 2025 so far still involved early-stage startups.

Early-stage genAI companies with the fastest-growing headcounts are concentrated in AI agent applications — and more specifically in voice AI development.

Advancements in voice AI models in 2024 — including the launch of OpenAI’s Realtime API for speech-to-speech applications — jumpstarted voice applications across use cases.

Companies are now positioning themselves for a future where humans interact with AI via conversation rather than text interfaces.

Job postings from Vapi — one of the fastest-growing voice startups based on headcount — highlight its positioning around this inflection point, as noted by CB Insights Hiring Insights.

Vapi has also seen the greatest jump in its Mosaic health score among voice development companies, as shown in the chart below.

Watch these startups for partnership, investment, and acquisition opportunities. Signaling the potential for increasing consolidation, Meta acquired voice startup Play AI, which uses AI to generate human-like voices, in July 2025.

MORE AI RESEARCH FROM CB INSIGHTS

For information on reprint rights or other inquiries, please contact reprints@cbinsights.com.

The post State of AI Q2’25 Report appeared first on CB Insights Research.

State of Digital Health Q2’25 Report

Amrit Panjabi — Thu, 24 Jul 2025 20:44:30 +0000

After a strong start to the year, digital health experienced a pullback in Q2’25. Deal volume declined, marking the lowest level of quarterly activity in the last 5 years. The drop reflects growing selectivity in a market still grappling with economic uncertainty and selective capital allocation.

AI continued to dominate funding, reflecting capital concentration in fewer, high-conviction bets. Established companies attracted investors, as evident by the quarter’s two $1B+ IPOs. The result is a market divided between mature companies attracting major capital, while the broader sector contracts.

Download the full report to access comprehensive data and charts on the evolving state of digital health.

Key takeaways from the report include:

Funding fell as deal volume hit a 5-year low. Equity funding dropped 21% QoQ to $4.4B, while deal count declined to 267 from 325 in Q1’25 — the lowest quarterly total in the last 5 years, according to CB Insights data. The pullback follows a strong Q1, with global economic uncertainty and reduced capital dampening dealmaking activity.
AI companies captured more than two-thirds of digital health funding. AI startups raised $3B in Q2, accounting for 69% of all digital health funding, up from 60% in Q1. The AI deal share held steady from the previous quarter at 41%, with capital flowing to areas such as clinical documentation, brain-computer interfaces, and electronic health record (EHR) integration tools.
2 digital health companies went public with $1B+ valuations. Hinge Health and Omada Health went public in Q2 at valuations of $2.6B and $1.1B, respectively. Both companies offer employer-driven chronic care programs and represent the year’s largest digital health IPOs — the first to debut above the $1B mark in the last 4 quarters.
Median deal size continues to rise in 2025 as investors prioritize larger rounds. The global median deal size reached $6M for the first half of the year, up from $5.1M in 2024. The U.S. led the increase with a median deal size of $9.3M.

We dive into the trends below.

Funding fell as deal volume hit a 5-year low

Digital health equity funding fell 21% QoQ in Q2’25, while deal volume dropped 18% to its lowest level in 5 years. This trend mirrors the broader venture landscape, where deal activity reached its lowest level since 2016.

Despite the pullback, Q2 produced 2 new unicorns this quarter. AI-driven oncology drug developer Pathos raised a $365M Series D round, one of the largest digital health funding rounds of the quarter. Telenutrition platform Nourish reached unicorn status after securing its $70M Series B round.

The funding landscape this quarter shows a clear preference for mature companies. Early-stage rounds averaged $7.7M in Q2, down from $11.7M in Q1. Meanwhile, late-stage deals averaged $137M, up 69% from the prior quarter.

This rise was powered by a few significant raises, most notably the Elon Musk co-founded Neuralink’s $650M Series E round – the largest digital health deal since 2021. The funding will advance the company’s AI-powered brain-computer interface platform, with applications aimed at neurological disorders.

AI companies captured more than two-thirds of digital health funding

AI-focused companies captured 69% of digital health funding in Q2’25 — up from 60% in Q1 — while deal share held steady at 41%. Notably, AI companies claimed 9 of the 10 largest deals this quarter, including 6 of the 7 mega-rounds ($100M+).

In fact, AI companies drove funding across multiple markets in Q2. The medical brain-computer interface market was the highest-funded market in digital health, driven solely by Neuralink’s $650M Series E round.

The second highest-funded market this quarter was clinical documentation solutions ($639M across 5 deals). This included Abridge ($300M), Commure ($200M), and Nabla ($70M), all of which are building AI-powered clinical note-taking tools. All three companies have CB Insights Mosaic scores above 900, indicating strong company health.

Two digital health companies went public with $1B+ valuations

Digital health saw its first significant IPO activity in over a year, with Hinge Health and Omada Health debuting in Q2’25 at valuations of $2.6B and $1.1B, respectively.

These are the first digital health IPOs to debut above the $1B mark in the last 4 quarters. Both companies target employer populations with chronic care programs, betting that access to commercially insured patients will attract payers seeking cost savings.

Hinge Health provides musculoskeletal therapy programs to employers and health plans, combining virtual physical therapy, motion tracking, and personalized coaching. Omada Health targets chronic conditions like diabetes, hypertension, and obesity through its AI-enhanced virtual care platform, which introduced a nutrition-focused agent this year.

Both companies went public after years of sustained growth and funding. Hinge Health raised $854M across 12 rounds before its IPO, including a $400M Series E round in October 2021. Omada Health raised $530M over 14 rounds. Its most recent financing was a $192M Series E round in February 2022.

Their IPOs break a multi-year drought as digital health companies delayed going public amid market volatility. As 2 of the sector’s most mature startups, these exits may be bellwethers for the industry.

Deal sizes continue to rise in 2025 as investors prioritize larger rounds

The global median digital health deal size reached $6M as of Q2’25, up from $5.1M in 2024, the highest level in the last 4 years. Also, the average deal size jumped to $22.2M, a 35% increase from 2024, reflecting a concentration of larger deals at the top.

In fact, 44% of total digital health funding in Q2 were from the 7 mega-rounds.

Late-stage median round size hit $49M in the first half of 2025, up 23% from $40M in 2024 — the highest since 2021’s $74M peak. These figures indicate that investors are consolidating capital around fewer, larger late-stage bets.

MORE DIGITAL HEALTH RESEARCH FROM CB INSIGHTS

The post State of Digital Health Q2’25 Report appeared first on CB Insights Research.

State of Fintech Q2’25 Report

Rachel Binder — Thu, 17 Jul 2025 21:56:35 +0000

Fintech funding remained steady in Q2’25 at $10.5B, marking 2 consecutive quarters above $10B for the first time since early 2023. While the sector is recovering, funding remains below 2022 levels.

Dealmaking fell this quarter by 7% to 804, as mega-rounds drove a substantial share (40%) of funding, and median deal size increased from $4M to $5M.

This quarter, the largest deal was Plaid‘s $575M round, reflecting rising demand for embedded finance and solutions that serve multiple fintech segments.

Mega-round activity was heavily concentrated in the US, which claimed a record 65% share of mega-round deals.

Digital assets saw momentum on the exit front, highlighted by Circle’s IPO and two of the largest M&A deals involving blockchain companies: Coinbase’s acquisition of Deribit ($2.9B) and Stripe’s acquisition of Privy (undisclosed).

Wealth tech and B2B fintech stood out as higher-momentum segments in Q2, with wealth tech funding seeing a dramatic uptick (up 171% QoQ to reach $1.9B), while B2B fintechs attracted several of the largest banking and payments equity rounds this quarter.

Download the full report to access comprehensive data and charts on the evolving state of fintech.

Key takeaways from the report include:

Fintech sector recovery continues with 2 consecutive $10B quarters, which hasn’t happened since early 2023. This quarter’s largest investment went to fintech infrastructure leader Plaid at $575M. Despite these recent highs, funding remains well below 2022 levels.
US-based fintechs command record share of global investment. The US achieved unprecedented dominance in Q2’25, capturing 65% of mega-rounds and 43% of all deals, both all-time highs. The US also captured 71% of mega-round funding and 60% of total fintech investment, reflecting a clear investor preference for US-based fintech opportunities.
B2B fintech attracts the majority of large deals. B2B fintech companies brought in 60% of the largest payments investments and 50% of the largest banking rounds in Q2’25, led by Ramp‘s $200M Series D and Dojo‘s $190M private equity round. The pattern signals a growing appetite for business-facing fintech platforms over consumer-oriented applications.
Digital wealth management is seeing a dramatic funding revival. Q2’25 marked a turning point for wealth tech with $1.9B in funding — nearly triple the Q1 number of $0.7B and the sector’s strongest performance in 3 years. Large deals like Addepar‘s $230M Series G round and Groww‘s $200M Series F drove both average and median deal sizes higher
Fintech M&A activity remains elevated. Fintech M&A deals rose to 205 in Q2’25, following a significant increase in Q4’24. Digital assets continue to drive exit activity, with Circle going public at a $6.9B valuation in June, Stripe’s acquisition of Privy, and Coinbase’s $2.9B acquisition of Deribit.

We dive into the trends below.

Fintech sector shows signs of recovery with two consecutive $10B quarters

For the first time since early 2023, fintech funding has exceeded $10B for 2 consecutive quarters.

Although Binance‘s $2B round propped up Q1’25, both Q1 and Q2 received 40% of total funding dollars from mega-rounds. Funding increased in most fintech subsectors in Q2, including capital markets, digital banking, digital lending, payments, and wealth tech. Notably the proportion of early-stage deals decreased across all sectors but one (digital lending) in 2025 YTD, indicating that investors are selectively funding mature companies across the fintech ecosystem.

The quarter’s largest investment went to fintech infrastructure leader Plaid, which raised $575M. New investors BlackRock, Fidelity, and Franklin Templeton led the round, which also included the company’s existing investors New Enterprise Associates and Ribbit Capital.

While Plaid’s latest valuation of $6.1B declined by half since its Series D round in 2021, this reflects a broader correction in tech valuations. In fact, Plaid’s fundamentals remain strong with 18% headcount growth over the last 12 months and 25% revenue growth in 2024. Plaid also reported that with an increase in the number of companies and markets it serves, now more than 1 in 2 Americans have used its products.

The second- and third-largest rounds of this quarter went to payroll fintech Rippling and Addepar, which is building investment portfolio management software. Late-stage deals across digital banking, capital markets, payments, and wealth tech also increased in Q2, suggesting current investment conditions favor established fintechs with proven business models.

US-based fintechs command record share of global investment

The US achieved unprecedented dominance across a variety of metrics in Q2’25, reflecting increased momentum for US-based fintechs.

US-based companies captured 65% of mega-rounds in Q2’25 — the highest share on record. US fintechs also secured 71% of all mega-round funding.

This geographic concentration extended beyond mega-rounds: US-based fintechs received 60% of total fintech investment dollars and 43% of all deals, with the latter representing another all-time high. Meanwhile, median and average deal size have both risen this quarter, and the proportion of early stage deals has dropped in 2025 YTD from 72% to 66%. Investors are focused on mid-to-late-stage, US-based fintechs, which benefit from a mature market and established financial infrastructure that facilitates scaling.

Mid-year 2025, stabilizing interest rates and improved market conditions accompany institutional appetite for later-stage fintech investments. Yet fintech lags behind other sectors in the broader market recovery. Quarterly venture funding has rebounded to over $90B each over the last 3 quarters (heights not seen since 2022) while the increase in 2025 fintech funding remains modest. The US offers compelling advantages for risk-conscious investors, including mature fintechs with proven business models and a large addressable market for end consumers and businesses.

B2B fintech solutions attract the majority of large deals

B2B fintech companies dominated in Q2’25, capturing 60% of the top 10 equity payments investments and 50% of the top 10 equity banking rounds.

This dominance signals a clear trend: businesses are increasingly hungry for digital-first financial tools that can streamline their operations, from automated spend management and corporate credit cards to comprehensive business banking platforms.

Major B2B deals included spend management leader Ramp’s $200M Series D at a record $16B valuation, payments platform Dojo’s $190M private equity round from Vitruvian Partners, and business banking provider Airwallex’s $150M Series F. Finom, which provides digital business banking for SMBs, obtained a $132M Series C round.

B2B-focused fintechs companies are rapidly scaling to meet demand — Ramp nearly doubled its headcount over the past 12 months, while its competitor Mercury more than doubled its valuation at the end of March in a $300M Series C round. Ramp launched treasury offerings in 2025, while Mercury Treasury recently upgraded with same-day liquidity. The introduction of new enterprise features, combined with funding rounds, headcount, and valuation increases, signals that these mid-to-late stage companies are expanding aggressively to capture B2B market share amid ample competition.

This shift towards B2B solutions suggests that the need for businesses to digitize their financial operations will drive fintech’s next growth phase, with investors betting on the larger deal sizes and stickier revenue models that business clients provide. Meanwhile, businesses accelerating digital transformation initiatives post-pandemic have created a large addressable market for financial software solutions that can demonstrate clear ROI through operational efficiency gains.

Digital wealth management sees dramatic funding revival

Q2’25 marked a turning point for wealth tech, with the subsector raising $1.9B in funding, nearly triple the previous quarter’s total and the highest level since Q2’22. A handful of mega-rounds drove the increase, as deal count remained on par with last quarter.

Notable deals included late-stage equity rounds to portfolio management platform Addepar ($230M), investment app Groww ($200M), digital broker Scalable Capital ($177M), RIA (registered investment advisor) platform Altruist ($152M), and personal finance toolkit Stash ($146M). These deals drove both average and median deal sizes higher across the sector.

Investors are gravitating toward wealth tech as AI unlocks new efficiencies in portfolio management, making investment services more scalable, cost-effective, and accessible to a broader market. Last month, Altruist acquired AI assistant Thyme to better serve financial advisors. Stash has earmarked their $146M round to support AI capabilities, including its consumer financial advice platform Money Coach AI. Addepar acquired AI workflow platform Arcus in May. Among the top 10 wealth tech companies by Mosaic, our proprietary startup health score, half have rolled out AI tools, earmarked new funding for AI capabilities, or made AI-related acquisitions in 2025 YTD.

M&A activity remains elevated

Fintech M&A deals rose to 205 in Q2’25, following a significant increase in Q4’24.

Notably, two of the most prominent M&A deals this quarter went to blockchain companies. The second largest fintech acquisition in Q2’25 was Coinbase’s $2.9B acquisition of crypto derivatives exchange Deribit. Meanwhile, Stripe acquired Privy, which provides white-label crypto wallet infrastructure, for an undisclosed sum in June. This follows its Q4’24 purchase of stablecoin company Bridge for $1.1B.

Major stablecoin issuer Circle went public in June at a $6.9B valuation, its stock quickly skyrocketing in value.

Other important exits this quarter involved neobanks and B2B tech, which have enjoyed momentum in 2025 to date:

The largest IPO in Q2’25 was neobank Chime at a $9.8B valuation based on outstanding shares. Like Plaid, Chime’s valuation represented a significant decrease from its high of $25B in 2021, attributable to broader market correction.

Xero’s $3B acquisition of accounts payable and receivable solution Melio was the largest of the quarter, tying into the surge in B2B interest.

MORE FINTECH RESEARCH FROM CB INSIGHTS

The post State of Fintech Q2’25 Report appeared first on CB Insights Research.

State of Venture Q2’25: Midyear Outlook

ashley.tortorelli@cbinsights.com — Thu, 17 Jul 2025 12:33:53 +0000

The post State of Venture Q2’25: Midyear Outlook appeared first on CB Insights Research.

State of Venture Q2’25 Report

Benjamin Lawrence — Thu, 10 Jul 2025 20:38:59 +0000

Venture funding surpassed $90B for the third consecutive quarter in Q2’25, even as deals slid to their lowest levels since Q4’16.

AI continues to dominate, capturing 50% of venture investment. At the same time, investors are doubling down on hard tech — hardware-focused and capital-intensive technology — driven by surging energy demands from AI, advancements in robotics, and growing defense interest.

Below, we break down the top stories from this quarter’s report, including:

Funding tops $90B for the third straight quarter, while deal count declines
Hard tech claims 6 of the top 10 largest deals
AI companies command funding premiums across sectors
Regulatory shifts push big tech from M&A to minority investments
CVC deals hit a 7-year low as the tariff threat looms

We also outline the categories shaping venture dealmaking for the rest of 2025 — including stablecoins, defense tech, quantum, and nuclear energy.

Let’s dive in.

Download the full report to access comprehensive data and charts on the evolving state of venture across sectors, geographies, and more.

Breakout sectors of 2025

Below, we analyze venture funding across tech sectors to identify where investor conviction and market momentum are strongest.

Stablecoin funding is on pace to shatter its previous record

Stablecoin startups are experiencing an explosive year-over-year funding surge as stablecoins achieve mainstream adoption. Funding is projected to reach $10.2B in 2025, representing more than 10x growth from 2024.

Growing regulatory frameworks worldwide — such as the pending passage of stablecoin legislation in the US with bipartisan support — provide needed certainty for institutional investment, setting the foundation for exponential growth.

Multiple startups are taking advantage of the momentum. While the largest funding rounds occurred during the first quarter — with $2B deals for Avalon Labs and Binance — notable rounds also occurred during Q2’25, including:

Flowdesk: $100M for digital asset trading and liquidity services
Conduit: $36M for its cross-border business transactions platform
Niural: $31M for an AI-enabled stablecoin and fiat payroll platform

Major financial services companies are also increasingly involved. Mastercard, Visa, and established banks are now enabling stablecoin transactions and issuing their own digital currencies, bringing institutional credibility to the space. Meanwhile, stablecoin issuers Circle and Ripple applied for banking licenses on June 30 and July 2, respectively, demonstrating their intent to operate like mainstream financial institutions.

Stablecoins are evolving beyond simple stores of value into yield-bearing tools and liquidity products. Solutions like liquidity mining, lending services, and yield-bearing stablecoins are receiving substantial investor attention. Cross-border payments companies powered by stablecoins are also gaining traction as affordable and accessible USD alternatives in emerging markets.

As regulatory frameworks solidify and institutional adoption accelerates, stablecoin companies are positioned to capture significant market share in global payments and financial infrastructure markets.

Defense tech momentum continues

Within the first two quarters of 2025, defense tech funding has already reached a new annual record of $11.1B.

The funding breakout is driven by multiple forces, including geopolitical instability and technology advancements, notably in drones and other unmanned vehicles.

Concurrently, the US Department of Defense is pushing to diversify the defense ecosystem through public-private partnerships and startup support.

The defense investor landscape is also rapidly evolving, with the number of unique investors in the space expected to increase 34% in 2025 to 950 from 710 the year prior. Traditional defense funds like Shield Capital and In-Q-Tel are now joined by generalist VCs, bringing more capital to fund a new generation of startups.

We expect continued investor interest in defense tech, as NATO recently agreed to increase defense spending from 2% to 5% of GDP by 2035, adding over $400B annually in market expansion. The 1.5% earmarked for security infrastructure aligns with venture trends in AI, cybersecurity, robotics, and technologies developed for both military and civilian use cases.

Quantum tech reaches an all-time high, halfway through the year

Quantum tech is attracting significant investor interest, reaching record annual funding levels at $2.2B within the first two quarters of 2025 — an increase of 69% from 2024.

The surge follows major hardware breakthroughs from Google, IBM, and Microsoft, which may drive confidence in leading startups even though the technology still lacks practical applications that outperform classical systems. Industry leaders like Fujitsu and Quantinuum — a subsidiary of Honeywell — expect fault-tolerant quantum computers by 2030 at the earliest.

Massive investments are flowing towards various quantum applications in 2025 so far:

PsiQuantum: $750M to build million-qubit photonic quantum computers by 2029
QuEra Computing: $230M to accelerate fault-tolerant neutral-atom quantum systems
Multiverse Computing: $215M to scale its quantum-inspired AI compression technology

Government support has also increased, with $1.8B in public funding announced globally in 2024. For example, Australia committed $620M to PsiQuantum, while DARPA committed up to $200M in joint funding to assess the feasibility of industrially useful quantum computers.

As quantum technologies move toward commercial viability, the combination of record private investment, substantial government backing, and technical progress positions the industry for significant growth once practical quantum advantage is achieved in commercial applications.

Corporate interest drives a surge in nuclear energy funding

Funding to nuclear energy companies is projected to reach an annual record by the end of 2025 at $5B. Massive energy requirements for AI data centers — with US data center power consumption projected to triple by 2030 — are driving corporate interest in clean baseload power.

Big tech companies are leading the charge, with investments since 2024 across both small modular reactors (SMRs) and fusion technologies:

Amazon invested in X-energy with plans to develop over 5 GW of SMR projects by 2039; Amazon also backed Realta Fusion
Google reached agreements with Kairos Power for up to 500 MW of nuclear power by 2030 and has also invested in Commonwealth Fusion Systems and TAE Technologies.
Microsoft reached a deal with Constellation Energy to reopen the Three Mile Island nuclear plant, while committing to purchasing fusion electricity from Helion Energy by 2028

Corporate interest has also skyrocketed, with earnings call mentions hitting record levels as executives grapple with the major power requirements for AI infrastructure.

Current and previous presidential administrations have reduced regulatory red tape for nuclear development, streamlining approval processes. The bipartisan approach creates stable regulatory support for long-term investments and should accelerate sector growth in the coming years.

As AI adoption continues, nuclear provides the only scalable solution for clean baseload power that intermittent renewables cannot match for always-on AI computing infrastructure. The combination of massive corporate demand and supportive regulatory frameworks positions nuclear for explosive growth in the years ahead.

If you aren’t already a client, sign up for a free trial to learn more about our platform.

RELATED RESOURCES FROM CB INSIGHTS:

The post State of Venture Q2’25 Report appeared first on CB Insights Research.

State of Insurtech Q1’25 Report

Chris Sekerak — Thu, 08 May 2025 21:26:03 +0000

The insurtech landscape is increasingly competitive. Median deal sizes are down, and early-stage insurtech funding is at a nearly 9-year low, despite a rebound in global insurtech funding to $1.3B in Q1’25.

Insurtech does not exist in a vacuum, and the broader venture environment is centered on AI funding. In Q1’25, OpenAI raised nearly 31 times the total funding of all insurtechs combined, underscoring where capital is flowing.

AI capabilities are poised to reshape the future of insurance — whether through 100-day-old startups or 100-year-old incumbents adapting to a new competitive reality.

Download the full report to access comprehensive data and charts on the evolving state of insurtech.

Key takeaways from the report include:

Insurtech dealmaking increases for the first time in a year. Global insurtech deal count increased 17% quarter-over-quarter (QoQ), from 83 in Q4’24 to 97 in Q1’25. Property & casualty insurtech drove the increase, from just 51 deals — a near 8-year low — in Q4’24 to 70 in Q1’25.
Median insurtech deal size tumbles 35% in 2025 YTD (year to date) to $4.0M. The median insurtech deal size has not been lower since 2019 ($3.4M). The decline stands out because median deal sizes across the broader venture environment rose 17% YTD to $3.5M, while insurtech’s fell.
Early-stage insurtech funding reaches a nearly 8-year low — $179M. Early-stage insurtech funding fell 35% year-over-year (YoY) from $277M in Q1’24.
Late-stage insurtech dealmaking paints a cautious growth picture. The 7 insurtechs that raised Series D+ deals in Q1’25 saw median headcount growth of just 3% over the past 12 months — far lower than insurtechs raising at earlier stages.
Silicon Valley sees 1 in 5 global insurtech deals. Silicon Valley’s share of global insurtech equity deals has nearly doubled YoY, from 10.9% in Q1’24 to 21.9% in Q1’25. Funding to Silicon Valley-based insurtech increased to $0.3B — the highest level since Q4’23 ($0.4B).

Insurtech dealmaking increases for the first time in a year

Insurtech deal count increased 17% QoQ, from 83 deals in Q4’24 to 97 in Q1’25 — a reversal of the broader venture trend, where deal count declined 7% over the same period.

The rebound was driven by property & casualty insurtech, which jumped from just 51 deals — a near 8-year low — in Q4’24 to 70 in Q1’25. Meanwhile, life & health insurtech saw deal count dip to 27 in Q1’25.

This increase in activity followed an abnormally weak Q4, when funding had fallen to $0.8B. In Q1’25, insurtech funding surged 63% to $1.3B — slightly above the 10-quarter average of $1.2B. Notably, insurtech was the only fintech vertical to post a funding gain this quarter.

Nearly $400M toward three $100M+ mega-round deals contributed to the broader funding rebound:

Quantexa, a data management and financial crime prevention platform, raised a $175M Series F deal.
Openly, a homeowners-focused general agency and program administrator, raised a $123M Series E deal.
Instabase, an AI platform for unstructured data, raised a $100M Series D deal.

Future implication: These mega-rounds signal investors’ readiness to write large checks for select insurtechs — even in a cautious funding environment. For incumbents, this underscores the importance of tracking well-capitalized startups that could pose competitive threats through 2025.

Median insurtech deal size tumbles in Q1’25

Half of the quarter’s top 10 insurtech deals went to AI-centered startups: Quantexa, Instabase, Nirvana, Taktile, and Naked. But unlike the broader venture market, insurtech lacked the depth of large-dollar AI deals needed to lift the median.

While the average insurtech deal size ticked up 6% to $15.8M in 2025 YTD, the median insurtech deal size tumbled from $5.4M in 2024 to $4.0M — its lowest point since 2019 ($3.4M). This trend diverged from the broader venture environment, where a spike in $100M+ mega-rounds pushed medians higher.

Early-stage insurtech saw a similar dynamic, with median deal sizes declining to $3.0M in 2025 YTD — even as the broader venture landscape saw an increase, from $2.0M in 2024 to $2.8M. Fertility-focused platform Gaia raised the largest early-stage insurtech deal in Q1’25 ($15M Series A).

Future implication: Smaller check sizes could give incumbent insurers an opening to partner with capital-constrained insurtechs — potentially securing more favorable terms and early access to emerging tech that would be harder to land in a hotter market.

Early-stage insurtech funding reaches a nearly 8-year low

Early-stage insurtech startups raised just $178.5M across 56 deals in Q1’25 — the lowest total since Q4’16 ($162.8M). Funding has dropped sharply over the past year, falling 35% from Q1’24.

Early-stage insurtech deal share has also tumbled over the past few years. In 2022, 71% of deals went to early-stage insurtechs, while in 2025 YTD, it was just 58%.

Still, the quarter delivered one notable early-stage highlight: AI claims platform Assured became just the second new insurtech unicorn since Q4’23. The startup raised an undisclosed Series A round at a $1B valuation, backed by ICONIQ Capital and Kleiner Perkins.

Assured also ranks in the global top 4% of companies for hiring momentum and is actively prioritizing genAI-focused hires:

Future implication: The sustained drop in early-stage insurtech funding risks shrinking the industry’s future innovation pipeline. To stay ahead, insurance execs should prioritize identifying and building relationships with promising startups now — before competition for a smaller pool of standouts intensifies.

Late-stage insurtech dealmaking paints a cautious growth picture

The 7 insurtechs that raised Series D+ rounds in Q1’25 posted median 12-month headcount growth of just 3% — significantly lower than their earlier-stage peers. Only one of them — insurance customer communication platform Ushur — saw double-digit growth over the same period.

Ushur is also the only insurtech among the 7 with an above-average M&A probability within the next 2 years. This signals a potential standstill in the late-stage insurtech market, especially as the IPO pipeline remains frozen — just 2 insurtechs have gone public since 2023.

Future implication: With just 3% median headcount growth, late-stage insurtechs are showing signs of stagnation. In a market where public investors expect clear growth momentum, more of these companies may be pushed toward M&A exits — often at compressed valuations.

Silicon Valley sees 1 in 5 global insurtech deals

Silicon Valley has now seen 2 consecutive quarters of elevated insurtech dealmaking. The share of global insurtech deals to Silicon Valley-based startups nearly doubled YoY, rising from 10.9% in Q1’24 to 21.9% in Q1’25. Comparatively, 9% of deals across the broader venture environment went to Silicon Valley-based companies in Q1’25.

2 of the quarter’s top 5 insurtech deals went to Silicon Valley-based insurtechs: Instabase and Nirvana ($80M Series C). As a result, Silicon Valley’s insurtech funding in Q1’25 increased to $0.3B — the highest level since Q4’22 ($0.4B). By comparison, Europe’s insurtech market saw $0.4B in funding across 26 deals in Q1’25, slightly edging out Silicon Valley’s total.

Silicon Valley also saw a major insurtech exit in Q1’25: Munich Re announced its acquisition of Palo Alto-based Next Insurance — one of insurtech’s most-promising startups — at a $2.6B valuation.

Future implication: As the world’s premier tech ecosystem, Silicon Valley remains a leading indicator for insurtech innovation. Insurance executives should track tech talent migration into insurtech as a signal of where future competitive threats may emerge.

MORE INSURTECH RESEARCH FROM CB INSIGHTS

For information on reprint rights or other inquiries, please contact reprints@cbinsights.com.

The post State of Insurtech Q1’25 Report appeared first on CB Insights Research.

State of AI Q1’25 Report

Adya Pandey — Thu, 01 May 2025 14:10:20 +0000

AI funding surged to record levels in Q1’25. And every layer of the AI stack — from horizontal and vertical applications to the underlying infrastructure — is reaping the rewards.

While deal volumes remained mostly steady, funding increased 51% to $66.6B, with the majority of this going to infrastructure companies like OpenAI.

Meanwhile, vertical AI is gaining momentum, with healthcare unicorns dominating Q1’s new unicorn cohort — a sign of investor confidence in AI’s increasing specialization.

Download the full report to access comprehensive data and charts on the evolving state of AI.

Key takeaways from the report include:

AI funding grows 51% QoQ to hit $66.6B — a new quarterly record — as industry incumbents secure mega-rounds. This boost was largely driven by a handful of major infrastructure players like OpenAI ($40B round), Anthropic ($3.5B Series E), and Safe Superintelligence ($2B Series B). Even without OpenAI’s massive round, Q1’25 would still represent the second-highest funding quarter ever (following Q4’24). Deal count decreased only slightly, falling 7% QoQ to 1,134.
Healthcare dominates the new AI unicorn pool. More than half of the 11 AI companies that reached $1B+ valuations in Q1 are developing healthcare solutions. These healthcare AI unicorns made up 30% of all new unicorns across VC and include Hippocratic AI (healthcare models and agents) and Insilico Medicine (AI drug discovery).
AI agent companies lead M&A activity amid increasing consolidation. The 3 largest of 85 AI acquisitions in Q1’25 went to companies offering enterprise AI agent technology. The markets these companies occupy — like agent development platforms and multi-agent systems — boast among the highest average Mosaic scores across industries, reflecting strong company health and signaling the potential for more exits.

We dive into the trends below.

AI funding reaches record $66.6B in Q1’25 as industry incumbents secure mega-rounds

AI funding grew 51% to $66.6B across 1,134 deals in Q1’25. This quarter’s funding total represents nearly two-thirds of all AI investment in 2024 ($101.5B), suggesting full-year 2025 funding will blow previous years’ tallies out of the water.

The surge was fueled by mega-rounds concentrated among a few infrastructure giants, most notably OpenAI’s massive $40B VC round, along with Anthropic’s $3.5B Series E and Safe Superintelligence’s $2B Series B. Even without OpenAI’s landmark funding round, Q1 would be AI’s second-strongest funding quarter ever.

While total funding surged, the relatively stable deal count suggests larger deal sizes — especially to already established market leaders — rather than simply more companies receiving investment. In fact, in 2025 YTD, the median deal size of $5M represents a 4-year high.

Healthcare dominates the new AI unicorn pool

While infrastructure companies received the lion’s share of funding, healthcare AI players led in new unicorn creation.

Healthcare companies claimed the majority of new AI unicorns in Q1’25, with 6 out of 11 total AI companies reaching the $1B+ milestone. Even when looking at the venture landscape beyond AI, healthcare AI players drove nearly 1 in 3 new unicorn births in Q1.

While healthcare AI unicorns are developing diverse applications across the care continuum, half of these newly minted unicorns apply AI to support provider workflows. These include:

Hippocratic AI (patient follow-up)
Abridge (clinical documentation)
OpenEvidence (healthcare decision-making)

This trend highlights both growing demand for clinician-support tools and strong investor conviction in AI’s ability to deliver returns in the healthcare industry.

AI agent companies lead M&A activity amid increasing consolidation

Agentic solutions led the top AI exits in Q1’25, securing the 3 largest deals among 85 acquisitions — establishing agents as the primary focus of industry consolidation.

These acquisitions align with the high Mosaic scores (which measure company health and growth potential on a 0-1,000 scale) across AI agent markets. Top agent categories all score well above the average of 370 across industries: autonomous agents & digital coworkers (721), AI agent development platforms (715), and multi-agent systems & orchestration (705).

The blockbuster exits of companies like Moveworks, Weights & Biases, and OfferFit show that enterprise buyers are increasingly seeking to build comprehensive agent solutions to gain a competitive edge.

MORE AI RESEARCH FROM CB INSIGHTS

For information on reprint rights or other inquiries, please contact reprints@cbinsights.com.

The post State of AI Q1’25 Report appeared first on CB Insights Research.

The State of AI: Trends to Watch in 2025

ashley.tortorelli@cbinsights.com — Wed, 30 Apr 2025 16:02:05 +0000

The post The State of AI: Trends to Watch in 2025 appeared first on CB Insights Research.

State of CVC Q1’25 Report

Benjamin Lawrence — Tue, 29 Apr 2025 13:53:00 +0000

In Q1’25, corporate venture capital hit its lowest deal volume in 7 years, with transactions plummeting to 728 deals and CVC-backed funding dropping 22% QoQ to $18.7B.

Despite this contraction, median deal size has climbed to $10M this year (up from $8.9M in full-year 2024), revealing that CVCs are making fewer but larger investments as economic uncertainty persists.

The quarter highlighted 2 other dominant forces reshaping the CVC landscape: US startups captured 70% of global CVC-backed funding — the 2nd straight quarter at 70%+ — while AI startups secured 7 of the top 10 CVC deals worldwide. This reflects an intensifying race among CVCs to secure competitive footholds in leading technologies before rivals gain the upper hand.

Download the full report to access comprehensive data and charts on the evolving state of CVC across sectors, geographies, and more.

Key takeaways from the report include:

Deals continue their downward trend as investors remain selective. Global CVC deal volume fell 13% QoQ to 728 deals in Q1’25, reaching the lowest quarterly total since Q1’18. Mega-rounds ($100M+) accounted for 59% of the $18.7B in total funding, showing that CVCs are still making substantial bets in a more selective environment.
US companies dominate CVC investment dollars. In Q1’25, US startups captured $13.1B (or 70%) of global funding from deals with CVC participation. Within the US, Silicon Valley maintained its leading position with $7.5B across 97 deals, underscoring its continued importance as a strategic hub for corporate investment.
AI continues to command CVC attention and dollars. AI startups secured 7 of the 10 largest CVC-backed deals in Q1’25, with these deals representing 31% of all quarterly funding among CVC-backed deals. The biggest deal was Anthropic‘s massive $3.5B Series E round, backed by the venture arms of Cisco and Salesforce.
Early-stage deal share holds steady at the highest level in over a decade. Early-stage investments made up 65% of all CVC deal activity in Q1’25, matching the high-water mark sustained annually since 2023. With the median early-stage deal size growing to $5.8M this year so far, CVCs are placing larger bets on nascent companies that have long-term growth potential.
Salesforce Ventures leads with the strongest Q1 portfolio. Among CVCs with 5+ investments in Q1’25, Salesforce Ventures leads the way with the highest average Mosaic score, followed by Qualcomm Ventures. Salesforce Ventures’ Q1’25 investments include 2 of the largest rounds this quarter — Anthropic ($3.5B) and Together AI ($305M) — signaling the importance of AI in its growth strategy.

We dive into the trends below.

Deals continue their downward trend as investors remain selective

Global CVC deals fell 13% QoQ to 728, the lowest quarterly total since Q1’18. CVC-backed funding also declined 22% to $18.7B.

Despite the pullback, $100M+ mega-rounds accounted for 59% of total funding, indicating that CVCs are still making large, strategic bets but in a more selective environment.

While the number of deals decreased, the median size of CVC-backed deals increased to $10M — up from $8.9M last year — as CVCs write larger checks for companies they believe will deliver long-term strategic value.

The shift toward fewer but larger deals reflects a broader flight to quality across venture capital. Notable mega-rounds in Q1’25 included Anthropic’s massive $3.5B Series E round, which represented nearly 19% of all Q1 CVC-backed funding globally and showcased the concentration of capital in market-leading companies.

US companies dominate CVC investment dollars

US companies captured 70% of global CVC-backed funding in Q1’25, securing $13.1B despite macroeconomic volatility. The US funding share represents the 2nd quarter in a row at 70% or above, up significantly from the historical norm of ~50% before 2023.

Silicon Valley maintained its position as the epicenter of CVC investment, attracting $7.5B across 97 deals — more than half the total US funding.

Several unicorn rounds powered the US’ strong funding quarter, including those from Anthropic, NinjaOne, Lambda, and Apptronik.

The capital concentration is striking given that US companies represented just 37% of global deal volume (269 of 728 deals). The substantial gap between deal share and funding share highlights a key regional difference in investment approach, with US deals ballooning in size. The median US deal reached $17M in Q1’25 — over 50% more than Europe, the next highest region, at $10.9M.

However, as corporate uncertainty grows due to shifting tariff policies, the US’ funding dominance will be a critical trend to monitor in the coming quarters.

AI continues to command CVC attention and dollars

AI dominated the biggest CVC investments in Q1’25 — securing 7 of the top 10 deals — as CVCs place massive bets on startups with the potential to reshape industries.

CVCs are investing in AI companies across diverse areas. These range from general-purpose AI agents & copilots to hardware applications like Apptronik’s AI-powered industrial humanoid robots.

Other leading CVC-backed AI deals in Q1’25 include:

Isomorphic Laboratories: $600M (backed by Google Ventures, NVentures) in a record-breaking round for AI-powered drug discovery
Lambda: $480M (In-Q-Tel, NVentures) for AI computing infrastructure and cloud services
Together AI: $305M (Prosperity7 Ventures, Salesforce Ventures, SE Ventures, SK Telecom Ventures) for building open-source foundation models and infrastructure
Harvey: $300M (Google Ventures, OpenAI Startup Fund, REV Venture Partners) for specialized AI solutions for the legal industry
Innovaccer: $275M (Danaher Ventures, Microsoft’s M12) for healthcare data integration and AI-powered analytics

For parent corporations, these investments go well beyond financial returns. They provide strategic access to technologies that could determine competitive advantage in the AI era.

Early-stage deals hold at the highest levels in over a decade

Early-stage investments remain at a record share of CVC activity, accounting for 65% of all deals in Q1’25 — matching the same level seen over the past 2 years and up 7 percentage points from where it was in 2021.

The strategic shift comes with increasing commitment levels, as the median early-stage deal size grew to $5.8M in Q1’25. Rather than spreading smaller amounts across many startups, CVCs are making substantial, focused bets on promising early-stage companies.

Regional strategies show notable differences: Asia leads with 39% of early-stage CVC deals, compared to 33% in the US and 21% in Europe. This suggests that corporate investors in Asia are particularly aggressive in securing access to emerging technologies at the earliest possible stage.

Across all markets, this pronounced shift toward early-stage investing reflects a fundamental change in CVC strategy: corporate investors are prioritizing gaining early access to innovation rather than supplying later-stage growth capital, positioning themselves to shape technological development from the beginning rather than joining after validation.

Salesforce Ventures leads with the strongest Q1 portfolio

Among CVCs with 5+ investments in Q1’25, Salesforce Ventures leads with the highest average Mosaic score for its Q1’25 bets (891 out of 1,000), followed by Qualcomm Ventures (840). Salesforce Ventures’ Q1’25 investments include 2 of the largest rounds this quarter: Anthropic ($3.5B) and Together AI ($305M).

Meanwhile, Google Ventures was the most active CVC in Q1’25 with 17 companies backed, followed by Japan-based investors Mitsubishi UFJ Capital and SMBC Venture Capital with 15 companies each. With 11 companies each, In-Q-Tel and Mizuho Capital rounded out the top five, highlighting the dominance of US- and Japan-based corporate investors.

MORE VENTURE RESEARCH FROM CB INSIGHTS

For information on reprint rights or other inquiries, please contact reprints@cbinsights.com.

The post State of CVC Q1’25 Report appeared first on CB Insights Research.

State of Digital Health Q1’25 Report

Alex Lee — Thu, 17 Apr 2025 15:06:14 +0000

Digital health funding rebounded sharply in Q1’25, reaching levels not seen since mid-2022 despite continued contraction in deal volume. This divergence points to a more selective funding environment, with capital concentrating around established companies, particularly those leveraging AI for specialized healthcare applications.

The sector also showed renewed vitality through the return of billion-dollar M&A deals and the highest quarterly addition of new unicorns in nearly three years. These developments further confirm that the digital health landscape is prioritizing specialized market leaders over broader capital distribution.

Key takeaways from the report include:

Investors are concentrating capital in fewer, higher-quality bets. Equity funding jumped 47% QoQ to reach the highest level since Q2’22, even as deal count dropped 9%. Startups with strong clinical validation, demonstrable ROI, and scalable business models are leading the pack.

Mega-rounds are back, and AI is claiming most of them. Funding from mega-rounds ($100M+ deals) surged to $2.5B across 11 deals in Q1, capturing 46% of all digital health funding — the highest share since Q4’21. AI-focused startups secured 8 of these 11 mega-rounds, signaling where investors expect outsized returns.

AI companies are capturing more than half of digital health funding. AI startups raised $3.2B in Q1, or 60% of all digital health funding — up from 41% in 2024. Top-funded segments included AI-derived small molecule drug discovery and clinical documentation tools, underscoring the shift toward targeted, high-impact applications.

Billion-dollar deals mark a digital health M&A revival. M&A activity surged 27% QoQ to 51 deals in Q1, with the US driving growth and two $1B+ acquisitions (CentralReach and Alto Pharmacy) demonstrating renewed market confidence in high-value digital health platforms.

Unicorn creation rebounds, driven by AI-native platforms. Digital health saw 6 new unicorns in Q1’25 — more than in all of 2024 — and the highest quarterly total since Q2’22. With half focused on AI for provider workflows, the data suggests investor conviction is highest where AI directly supports care delivery.

We dive into the trends below.

Investors are concentrating capital in fewer, higher-quality bets

Digital health equity funding surged 47% QoQ, making it the strongest quarter since Q2’22. But while capital surged, deal volume slipped 9%, underscoring a broader VC trend: fewer bets, bigger checks.. This consolidation pushed the global median deal size from $5.4M to $6.4M.

This growth was powered by a handful of major raises, most notably Isomorphic Labs‘ record-breaking $600M Series A on the final day of Q1. This investment — the largest ever for AI in drug discovery — will support the company’s evolution from an AI molecular design platform to a comprehensive therapeutic discovery engine.

Deal stage distribution also shifted. Early-stage deal share declined from 60% of total volume in 2024 to 51% in 2025 YTD, while mid and late-stage deal shares increased slightly. But the most striking change was in deal size: median late-stage deal size grew 96% QoQ, compared to 41% for mid-stage and 25% for early-stage rounds.

This late-stage surge reflects investor preference for companies with regulatory milestones and scalable AI platforms. Examples include Saluda Medical, which received FDA approval for its Evoke System; Insilico Medicine, advancing drug candidates to clinical trials; and Innovaccer, now serving 6 of the top 10 US healthcare systems.

Mega-rounds are back, and AI is claiming most of them

Mega-rounds made a strong comeback in Q1’25, totaling $2.5B across 11 deals — more than double Q4’24’s funding, despite only a modest uptick in volume. These $100M+ investments captured 46% of all digital health funding, marking the highest concentration of capital in mega-rounds since Q4’21 and signaling renewed investor confidence in mature digital health companies.

AI-focused startups dominated these large investments, securing 8 of the 11 mega-rounds in Q1. Standout deals include Isomorphic Labs’ $600M Series A for therapeutic development, Truveta‘s $320M Series C for electronic health record (EHR) data analytics, and Innovaccer’s $275M Series F for its clinical decision support platform.

AI companies are capturing more than half of digital health funding

AI now accounts for the majority of digital health funding, pulling in 60% of Q1’25 investment — up from 41% in 2024 and 37% in 2023. This quarter marks the first time AI companies have captured more than half of all digital health dollars, signaling a structural shift likely to continue as the sector matures.

Despite an overall decline in digital health deals, AI digital health deal volume rose 6% QoQ — from 109 in Q4’24 to 116 in Q1’25 — underscoring sustained investor appetite for AI-driven solutions. The top-funded AI markets were AI-derived small molecule drugs ($204M across 5 deals) and clinical documentation solutions ($372M across 4 deals).

The surge reflects not just hype, but real traction: AI is evolving from general-purpose tools to vertical-specific, regulatory-compliant platforms that address provider burnout, accelerate R&D, and improve diagnostics.

High-momentum startups in Q1’25 — according to CB Insights’ Mosaic score — include Ubie (Mosaic score: 922), which offers an AI-powered symptom tracker, and Suki (Mosaic score: 913), a voice assistant for clinical documentation. These use cases show how AI is delivering measurable clinical and operational value across the ecosystem.

Billion-dollar deals mark a digital health M&A revival

M&A activity surged 27% QoQ to 51 deals in Q1, reaching its highest level since Q1’23. This growth was driven entirely by US companies, where deal volume increased 85% QoQ to 37, while Europe dipped slightly (12 to 10 deals) and Asia saw just 1 deal, down from 3.

The quarter featured two $1B+ acquisitions — the first such deals since Q2’22 — signaling the return of strategic buyers to the market. Roper Technologies‘ acquired CentralReach, an autism and IDD care software provider, for $1.6B and Paulus Holdings purchased digital pharmacy platform Alto Pharmacy for $1.5B.

These acquisitions highlight a strategic shift toward platforms with market dominance and proprietary data. Alto Pharmacy serves more than 500,000 patients and captures deep insights into medication use and patient behavior. CentralReach supports 200,000 users with rich clinical and behavioral datasets for autism and IDD care. Strategic buyers are showing a clear willingness to pay premium valuations for scaled operations paired with hard-to-replicate data ecosystems.

Unicorn creation rebounds, driven by AI-native platforms

6 new unicorns were minted in Q1’25 – the most in a single quarter since Q2’22 – but with a striking difference in scale. Today’s unicorns are leaner, averaging just 196 employees compared to 408 during the 2021-2022 boom. OpenEvidence reached the milestone with a team of just 21.

They’re also reaching unicorn status faster. The average time to unicorn this year has fallen to 6 years from 7 in 2022, with Hippocratic AI setting the pace — hitting a $1B+ valuation just two years after its founding in 2023.

Regionally, the US led the charge with 4 new unicorns, while Europe contributed 1 and Asia celebrated its first digital health unicorn birth since 2021.

Half of these newly minted unicorns apply AI to support provider workflows: Hippocratic AI (patient follow-up), Abridge (clinical documentation), and OpenEvidence (healthcare decision-making). This trend highlights both growing demand for clinician-support tools — and strong investor conviction in AI’s ability to deliver venture-scale returns.

With M&A activity surging and $1B+ acquisitions returning to the market, these companies are prime candidates for notable future exits. Based on CB Insights’ M&A probability metrics, OpenEvidence stands out as the frontrunner with a 35% likelihood of acquisition in the next 2 years, while Neko Health follows with 22% — both exceeding the market average of 20%. follows with 22% – both exceeding the market average of 20%.

MORE DIGITAL HEALTH RESEARCH FROM CB INSIGHTS

For information on reprint rights or other inquiries, please contact reprints@cbinsights.com.

The post State of Digital Health Q1’25 Report appeared first on CB Insights Research.

State of Fintech Q1’25 Report

Laura Kennedy — Thu, 10 Apr 2025 14:08:31 +0000

On its face, fintech funding had a strong quarter in Q1’25, topping $10B for the first quarter in 2 years.

But one deal — a $2B minority round for crypto exchange Binance — made up nearly 20% of the funding. And global dealmaking declined for the fourth straight quarter.

Amid the mixed bag in funding, though, several areas of momentum stand out: AI, crypto, and digital banking.

Download the full report to access comprehensive data and charts on the evolving state of fintech.

Key takeaways from the report include:

Fintech funding gets a big boost from Binance. Funding to fintech companies increased 18% in Q1’25, its biggest jump in 3 quarters. The metric topped $10B for the first time in 2 years, propped up by 1 big deal: crypto exchange Binance’s $2B corporate minority round. Without that deal, Q1’25 funding would have trailed Q4’24.
AI is gathering steam in fintech. AI companies raised a record 16% of all fintech deals in Q1’25. AI’s steady increase in deal share follows trends in the broader venture market. AI companies’ share of fintech deals has more than doubled since OpenAI launched ChatGPT in 2022.
Crypto is resurging with investors. More than half (52%) of the biggest early-stage deals went to companies developing digital asset solutions, including blockchain tech, crypto exchanges, payments platforms, security, and more. The quarter also saw a new crypto banking unicorn.
Digital banking remains resilient. Despite funding and deals declining in Q1’25, digital banking companies have the highest average CB Insights Mosaic score, which measures business health and growth potential, among all fintech verticals. Challenger banks are fueling the high scores: 6 of the 7 digital banking companies with Mosaic scores of more than 900 fall into the category.

We dive into the trends below.

Fintech funding gets a big boost from Binance

Funding to fintech companies increased 18% in Q1’25 — its biggest jump in 3 quarters — and topped $10B for the first time in 2 years.

But one-fifth of the funding came from 1 deal: crypto exchange Binance’s $2B corporate minority round from Abu Dhabi-based AI investor MGX.

The massive round was the largest ever investment in a crypto company. Along with other finserv leaders’ activity — such as Stripe’s October 2024 acquisition of stablecoin platform Bridge for $1.1B — the deal is a marker of growing institutional interest in digital currencies.

Meanwhile, dealmaking fell by 3% to 777 to mark a fourth straight quarter of decline.

Overall, big rounds made up a larger share of fintech funding in the quarter. Mega-rounds (deals of $100M+) made up 44% of all funding, their highest quarterly share since Q1’23. That said, the total number of mega-rounds in the quarter still declined to 14 in Q1’25, down from 22 in Q4’24.

Mega-round recipients included a mid-stage digital bank (Mercury), a late-stage buy now, pay later provider (Tabby), and an early-stage credit card issuer (Plata). Investors also backed substantial rounds in digital currencies: in addition to Binance, mega-rounds went to an early-stage DeFi player (ZENMEV) and a mid-stage crypto wallet (Phantom).

AI is gathering steam in fintech

In line with the broader venture market, AI companies make up a growing share of fintech dealmaking.

AI companies that offer fintech solutions raised 16% (122) of all fintech deals in Q1’25. AI companies’ share of fintech deals has more than doubled since OpenAI launched ChatGPT in late 2022.

AI’s share of total fintech funding also ticked up in Q1’25, to 17%. The biggest deal to an AI-powered fintech company was a $200M round for home equity line of credit provider Figure, which is using AI to speed up loan originations and other processes.

Crypto is resurging with investors

Investors’ interest in crypto jumped in Q1’25.

Along with significant rounds for several mid- and late-stage digital currency companies, investors also poured money into early-stage crypto: 52% of the biggest seed and Series A deals in the quarter went to companies developing digital asset solutions — up from just 24% of the top early-stage deals in Q4’24.

Meanwhile, Swiss digital asset bank Sygnum was one of the quarter’s 3 new fintech unicorns.

The strength in crypto investment across metrics (mega-rounds, early-stage deals, unicorns) sets the stage for blockchain to play a larger role long-term across financial services like payments and investment.

Digital banking remains resilient

Despite a quarter when digital banking funding and deals both declined, digital banking companies remain resilient.

Among major fintech verticals, digital banking companies have the highest average CB Insights Mosaic score — which measures private-company health and growth potential — across all fintech verticals.

Challenger banks are fueling the high scores: 6 of the 7 digital banking companies with Mosaic scores of 900+ fall into the category.

This includes US-based Mercury, which raised the second-largest equity deal in Q1’25: a $300M Series C round from investors including Sequoia Capital and Andreessen Horowitz. The company, which provides business banking, says the new funding will support acquisitions and expansion.

Other high-Mosaic challenger banks that raised funding in Q1’25 are establishing themselves in market niches that have proven more difficult for traditional banks. For instance, Varo focuses on serving the underbanked, and raised a $29M Series G round in February 2025. Moniepoint, which is based in Nigeria, raised a $10M Series C-II round from Visa in January and is building payment and banking networks in Africa.

MORE FINTECH RESEARCH FROM CB INSIGHTS

For information on reprint rights or other inquiries, please contact reprints@cbinsights.com.

The post State of Fintech Q1’25 Report appeared first on CB Insights Research.

State of Venture Q1’25 Report

Alex Lee — Thu, 03 Apr 2025 14:48:01 +0000

Venture capital funding reached the highest level in nearly 3 years in Q1’25 — led by OpenAI’s mammoth $40B round — as AI continues to reshape the venture ecosystem.

Opportunities across stages and geographies have fueled growth in deal sizes globally. So far in 2025, the median deal size sits at a record $3.5M.

While AI continues to dominate headlines and venture activity, sectors like fintech, digital health, and retail tech all recorded quarterly funding increases as investors diversify beyond core AI infrastructure plays.

Download the full report to access comprehensive data and charts on the evolving state of venture across sectors, geographies, and more.

Below, we break down the top stories from this quarter’s report, including:

Quarterly funding jumps to $121B, even as deal count keeps falling
AI now drives 1 in 5 global venture deals
Eight early-stage AI companies raise $100M+ mega-rounds
Early-stage deal sizes pace at an all-time high
Billion-dollar M&A exits hit a new quarterly record

We also outline the key trends shaping venture dealmaking for the rest of 2025 — from AI agent specialization and the voice AI boom to crypto’s rebound.

Let’s dive in.

Predictions for venture dealmaking in 2025

Below, we use signals from public-company earnings calls, startup financing trends, and business relationships to predict which trends will dominate venture activity through the rest of 2025.

AI agents “niche down” and gain enterprise buy-in

AI agents are transitioning from concept to commercial application. They’ve become a frequent topic on corporate earnings calls, and according to a December 2024 CB Insights survey, 63% of organizations said they are placing significant importance on AI agents over the next 12 months. All respondents reported at least experimenting with agents.

These LLM-based systems represent an evolution beyond copilots. They can autonomously handle complex tasks — from sales prospecting to compliance decision-making — with limited human input. The market is expanding rapidly, with CB Insights data showing that over half of companies in the space were founded since 2023.

Investor interest is surging in parallel. AI agent startups saw more than 200 equity deals in 2024 — and activity is pacing toward similar levels this year.

Key investment themes emerging in the space include:

Specialized agents for specific business functions (sales, legal, finance)
Agent orchestration platforms that manage multiple agentic systems
Safety and alignment tools for ensuring agent behaviors match human intentions
Enterprise-grade agents with robust permissions and security frameworks

As agents become more capable and trustworthy, adoption will accelerate across industries.

Voice AI takes off amid technical advances

Voice AI is undergoing a technical transformation as models shift toward processing audio directly — bypassing the text intermediation stage — and approaching human-like conversation latency of under 300ms.

This technical progress has fueled substantial investment, with voice AI solutions raising $2.1B in 2024 and nearly $500M in Q1’25.

One standout is ElevenLabs, which reached $100M in ARR just 3 years after its founding and raised a $180M round in January from investors including a16z, Salesforce Ventures, and Sequoia Capital.

Despite these promising signals, the voice AI market remains in early development. CB Insights data shows approximately 85% of companies in the space are at levels 1-3 on the Commercial Maturity scale. Nearly half are developing or validating their products, while 39% have just begun commercial distribution.

As voice interfaces become more natural and capable, we expect to see investment opportunities emerge in several areas:

Domain-specific voice applications for industries like healthcare and legal
Voice AI trained on local languages not typically covered by general-purpose AI systems
Voice-first UI/UX for both consumer and enterprise applications

Crypto & blockchain rebound

After weathering a prolonged crypto winter, blockchain technologies are experiencing renewed institutional interest. Funding to crypto/blockchain companies reached $6.6B in Q1’25, putting the space on track to surpass $20B in annual funding. Earnings call mentions have climbed accordingly.

Several crypto companies now rank among the most likely IPO candidates, with platforms like Blockchain.com and Kraken showing IPO probabilities 64x higher than the average company tracked by CB Insights — a notable shift in public-market viability for the sector.

Another trend to watch is the growing institutional and government focus on stablecoins, as regulators develop frameworks to incorporate these digital assets into the traditional financial system.

Defense tech comes into focus

Military technology is entering a new era as investment shifts toward autonomous systems and AI-driven capabilities.

According to former Joint Chiefs of Staff Chairman General Mark Milley, smart machines and robotics could account for one-third of the US military presence within the next 15 years.

Funding to AI defense tech startups has already reached $1.5B this year — leading to a projected $6B by year-end. Last quarter saw earnings call discussion of defense reach an all-time high.

Much of this activity centers on multidomain operations (MDO) technologies — integrating systems across land, sea, air, space, and cyber — where AI is accelerating mission planning, threat detection, and battlefield connectivity. Major defense contractors are forming partnerships with AI startups to enhance battlefield management systems, mission planning capabilities, and integrated defense connectivity platforms.

As geopolitical tensions persist, defense tech investment is likely to continue growing, with particular focus on autonomous systems, AI-enhanced battlefield analytics, and advanced cybersecurity solutions for critical infrastructure.

Conclusion

The venture capital landscape in Q1’25 reflects key contrasts: record funding alongside declining deal count, significant early-stage deals vs. heightened expectations for follow-on capital, and a resurgence in billion-dollar exits despite broader market caution.

AI continues to influence capital allocation decisions across the venture ecosystem, but we’re seeing a shift from general infrastructure investments to specialized vertical applications and industry-specific solutions. Meanwhile, sectors beyond AI are showing resilience, with fintech, digital health, and retail tech all posting quarterly funding increases.

For investors, the data suggests maintaining a disciplined approach to AI investments while remaining alert to opportunities in adjacent sectors. The companies that successfully blend AI capabilities with sustainable business models will emerge as the defining ventures of this era.

For more insights on venture trends and emerging technologies, explore our related resources:

For information on reprint rights or other inquiries, please contact reprints@cbinsights.com.

The post State of Venture Q1’25 Report appeared first on CB Insights Research.

State of Insurtech 2024 Report

Chris Sekerak — Thu, 13 Feb 2025 18:03:07 +0000

In 2024, investors continued to retreat from insurtech.

Just 113 investors made at least 2 equity insurtech investments during the year — a 72% drop from the high of 406 investors in 2021. As a result, insurtech dealmaking dropped to 362 deals, the lowest annual total since 2016.

Download the full report to access comprehensive data and charts on the evolving state of insurtech.

Key takeaways from the report include:

Insurtech dealmaking and funding continue to decline. Deal count fell 28% year-over-year (YoY) to 362 deals in 2024, while funding dropped 4% to $4.5B. Insurtech deals and funding are both at recent lows.
Quarterly funding to P&C insurtechs is in the gutter. P&C funding dropped 43% quarter-over-quarter (QoQ) to $0.4B in Q4’24 — a 7-year low — with annual funding also declining to $2.6B. The year’s 2 largest deals in P&C went to AI-focused startups Altana AI and Akur8, highlighting investors’ appetite for specialized AI opportunities.
Silicon Valley is dethroned as insurtech’s funding capital. Silicon Valley’s share of global insurtech funding dropped dramatically from 20% in 2023 to 10% in 2024, surpassed by New York at 15%. This was the first time since 2018 that Silicon Valley wasn’t No. 1.
Early-stage insurtechs raise record-high deal sizes. The median early-stage insurtech deal size surged 52% YoY to $3.8M in 2024 — outpacing the broader venture landscape — as investors concentrate on a more selective group of innovators.
Recently funded insurtechs show stronger business fundamentals and more efficient growth trajectories. Insurtechs that raised funding in 2024 have grown employee headcounts by a median of 20% over the last 12 months, far surpassing the 3% growth among those that raised during the funding boom of 2021.

Insurtech dealmaking and funding continue to decline

Insurtech deal count fell 28% YoY, from 500 deals in 2023 to 362 in 2024. The decline outpaced the broader venture environment, which saw deal count fall 19% YoY. 2024 was the worst year for insurtech dealmaking since 2016 (328 deals).

Deal volume among leading investors has also decreased. The number of investors that made 5 or more equity insurtech investments has fallen from 57 in 2021 to just 7 in 2024. Those that remain active now operate in a more favorable environment due to reduced competition across the marketplace.

Insurtech funding declined in 2024 as well, though by only 4% YoY.

Quarterly funding to P&C insurtechs is in the gutter

Q4’24 marked a 7-year low for P&C insurtech funding, which fell 43% QoQ to $0.4B. The decline caused broader insurtech funding to halve QoQ, from $1.4B in Q3’24 to $0.7B in Q4’24.

P&C deal count also fell 10% QoQ to 45 in Q4’24, the lowest level since Q2’16.

Annual P&C insurtech funding declined to $2.6B in 2024, a 7-year low, underscored by just 2 P&C insurtech startups raising $100M+ mega-round deals: Altana AI, which offers an AI-powered supply chain risk platform, and Akur8, an AI-powered pricing platform. Those deals signal appetite for specialized AI products for the insurance industry, coinciding with a global surge in AI funding to over $100B last year.

Comparatively, life & health insurtech saw an increase in annual funding and dealmaking. Funding increased 64% YoY to $1.8B in 2024, while deals ticked up from 126 in 2023 to 128 in 2024.

Silicon Valley is dethroned as insurtech’s funding capital

The share of global insurtech funding to Silicon Valley-based startups halved YoY, falling from 20% in 2023 to 10% in 2024. Comparatively, New York led the way with 15% of global insurtech funding share in 2024, more than doubling from 7% the year prior.

Silicon Valley is the world’s leading tech ecosystem, and venture-wide funding to the region’s startups soared last year amid a boom in AI investment. Given the ecosystem’s prominence, diminished insurtech activity in Silicon Valley could lead to missed opportunities for insurance-focused AI advancements.

Early-stage insurtechs raise record-high deal sizes

The median insurtech deal size increased from $4.1M in 2023 to $5.2M in 2024.

The increase was fueled by early-stage insurtechs, which saw median deal size surge 52% YoY, from $2.5M in 2023 to $3.8M in 2024. The size and growth rate both beat out the broader venture environment, where early-stage deal size increased 17% YoY to $2.1M.

Combined with the broader decline in dealmaking, larger check sizes indicate that investors are concentrating their investments on fewer bets. For the insurance industry, this dynamic points to a slimmer insurtech landscape with fewer high-growth participants moving forward.

On the other hand, late-stage insurtech deal sizes declined 19% YoY from $40M in 2023 to $32.5M in 2024.

The decline coincides with a restricted exit environment: Insurtech M&A exits fell from 57 in 2023 to 35 in 2024.

Nevertheless, notable exits include CCC Intelligent Solutions’s acquisition of EvolutionIQ in December at a valuation of $730M, as well as Applied’s purchase of Planck in July. Both acquisitions targeted genAI-enabled startups, signaling a broader appetite for genAI insurance offerings.

Recently funded insurtechs show stronger business fundamentals

Insurtechs that raised funding in 2024 are growing headcounts faster than other insurtechs, by a median of 20% over the last 12 months and 40% over the last 24 months.

Comparatively, median headcount growth among insurtechs that raised a funding round at the height of the funding boom in 2021 is marginal — just 3% over the last 12 months.

The higher growth rates of recently funded insurtechs suggest a new breed of companies with stronger fundamentals — they’re not only able to raise capital in a selective market but are also demonstrating more efficient growth than their 2021-funded counterparts.

By the same logic, investors and partners (like established brokers and carriers) should monitor the landscape for outliers that represent organic growth opportunities — such as insurtechs that haven’t raised funding in several years but continue to grow headcount at a steady clip.

MORE INSURTECH RESEARCH FROM CB INSIGHTS

For information on reprint rights or other inquiries, please contact reprints@cbinsights.com.

The post State of Insurtech 2024 Report appeared first on CB Insights Research.

The State of AI: Charting the Course from 2024 to 2025

ashley.tortorelli@cbinsights.com — Tue, 11 Feb 2025 17:59:45 +0000

The post The State of AI: Charting the Course from 2024 to 2025 appeared first on CB Insights Research.

State of Climate Tech 2024 Report

Thomas Hodson — Thu, 06 Feb 2025 16:40:03 +0000

Climate tech investment activity dropped significantly in 2024, with both funding and deals falling to their lowest levels since 2020.

A key factor in the slowdown was a sharp drop in funding from mega-rounds ($100M+ deals), which dropped 47% year-over-year (YoY) in 2024. This coincided with high-profile bankruptcies of established climate tech startups like battery manufacturer Northvolt.

However, this turbulence wasn’t limited to the private markets — public players like Lilium and Arrival also filed for insolvency/bankruptcy over the period, highlighting the commercialization challenges facing capital-intensive industries like climate tech.

Download the full report to access comprehensive data and charts on the evolving state of climate tech across sectors, geographies, and more.

Key takeaways from the report include:

Climate tech investment activity continues to contract. Global climate tech funding fell for the second year straight in 2024, dropping by 40% YoY, with mega-round funding falling by 47%. However, the space still saw notable mega-rounds. This included deals to players modernizing the power grid, drawing participation from tech giants racing to secure clean energy for computing infrastructure.
Grid tech and nuclear are gaining momentum to meet AI’s energy needs. Within climate tech, markets targeting the grid and power generation show the strongest growth potential, according to CB Insights Mosaic startup health scores. This momentum is driven in part by the massive energy demands (and expected continued demand) of AI data centers.
Electric vehicle technology sees record pullback in deals. After years of steady growth, electric vehicle (EV) tech deal activity plunged 61% YoY in 2024 — its steepest decline on record. This points to broader challenges in the sector, like lower consumer demand for EVs and increased capital costs for scaling manufacturing operations.
Climate tech M&A exits decline once again. Climate tech M&A exits dropped by 25% YoY to hit 284, the lowest count since 2020. At the quarterly level, M&A exits steadily declined over the course of 2024, falling from 104 in Q1’24 to 39 in Q4’24. Growing skepticism around environmental, social, and governance (ESG) initiatives could be a contributing factor.

We dive into the trends below.

Climate tech investment activity continues to contract

Global climate tech funding dropped for a second consecutive year in 2024. It fell by 40% YoY, with mega-round funding falling by 47% over the same period.

The funding slowdown played out differently across the globe. US climate tech showed resilience YoY with relatively steady funding despite fewer deals. Meanwhile, other countries saw steep declines in climate tech dollars, with China experiencing the sharpest drop (-66% YoY).

Amid the overall funding decline, climate tech still saw several notable mega-rounds. This included deals in Q4’24 for companies modernizing the power grid:

Crusoe secured $600M at a $2.8B valuation to support its efforts to use waste natural gas to power large-scale data centers
X-energy received $500M as it works to build small modular reactors (SMRs) capable of generating more than 5 gigawatts of electricity by 2039
Form Energy secured $405M to accelerate production of its iron-air batteries capable of 100-hour energy storage

Notably, some of these deals drew participation from big tech companies racing to secure clean energy for computing infrastructure. For example, Amazon (via the Climate Pledge Fund) invested in X-energy’s nuclear development, and Nvidia invested in Crusoe’s sustainable computing infrastructure, reflecting big tech’s interest in solutions that can help meet rising AI data center demands.

Grid tech and nuclear are gaining momentum to meet AI’s energy needs

Comparing median CB Insights Mosaic scores (a measure of private tech company health and growth potential on a 0–1,000 scale) for climate tech companies that raised equity funding in 2024 reveals the most promising markets in climate tech.

Grid tech and nuclear markets — covering technologies directly integrated into and operated by utilities to enhance power system reliability, flexibility, and clean energy integration — dominate the top 10 climate tech markets by median Mosaic score, highlighting their growth potential.

Surging energy demand from AI data centers is in part responsible for these markets’ momentum. For example, nuclear fusion and small modular reactors could provide continuous clean power generation, grid storage enables reliable renewable energy delivery, and virtual power plants help optimize massive power loads.

Electric vehicle technology sees record pullback in deals

Electric vehicle tech deals experienced their steepest decline on record in 2024, with deal count plunging 61% YoY to 243.

High-profile bankruptcies underscored the sector’s capital-intensive manufacturing challenges in 2024. Battery manufacturer Northvolt filed for bankruptcy a year after raising $1.2B, as it struggled to scale production efficiently. Electric van maker Arrival — which went public in 2021 at a $13B valuation — also filed for bankruptcy last year amid mounting production costs and the inability to raise funding.

Even the auto industry’s most prominent EV champions scaled back their electric ambitions throughout the year:

GM delayed its Orion Assembly EV truck plant by 6 months and cut 2024 EV targets by 17%
Toyota postponed US EV production to 2026
Ford canceled plans to produce an all-electric three-row SUV, pivoting to a hybrid approach instead
Volvo dropped its 2030 all-electric goal

Climate tech M&A exits decline once again

In 2024, climate tech M&A exits fell by 25% YoY to hit 284 — the lowest count since 2020.

At the quarterly level, M&A exits steadily declined over the course of 2024, falling from 104 in Q1’24 to 39 in Q4’24.

The decline in M&A activity coincided with key changes in market conditions, including the rise of economic headwinds, political uncertainty, and growing skepticism around environmental, social, and governance (ESG) initiatives.

For example, ESG tech markets collectively saw equity funding decline 54% YoY in 2024. On the corporate side, mentions of ESG in earnings calls have trended down since peaking in Q1’22.

As skepticism toward ESG initiatives grows, some companies appear to be placing lower priority on climate tech acquisitions that were previously considered strategic imperatives.

MORE CLIMATE TECH RESEARCH FROM CB INSIGHTS

For information on reprint rights or other inquiries, please contact reprints@cbinsights.com.

The post State of Climate Tech 2024 Report appeared first on CB Insights Research.

State of CVC 2024 Report

Benjamin Lawrence — Tue, 04 Feb 2025 14:00:45 +0000

Global CVC-backed funding rebounded 20% YoY to $65.9B in 2024, fueled by increased attention to US startups — especially AI companies, which drew record-high shares of both CVC-backed deals and funding.

However, global CVC deal count dropped to its lowest level since 2018 as CVCs become more selective.

Download the full report to access comprehensive data and charts on the evolving state of CVC across sectors, geographies, and more.

Key takeaways from the report include:

CVC-backed funding grows, deal activity slows. Global CVC-backed funding increased 20% YoY to $65.9B, but deal count fell to 3,434, the lowest level since 2018. All major regions saw deal volume declines, with Europe dropping the most at 10% YoY.
CVCs are all in on AI. AI startups captured 37% of CVC-backed funding and 21% of deals in 2024 — both record highs. Counter to the broader decline in deals, CVCs ratcheted up AI dealmaking by 13% YoY as they race to secure footholds in the space before competitors gain an insurmountable edge.
The flight to quality continues. Among deals with CVC participation, the annual average deal size hit $27.3M in 2024, tied for the second highest ever. Amid fewer deals, CVCs are increasingly aggressive when they do decide to invest.
Early-stage deals dominate. Early-stage rounds comprised 65% of 2024 CVC-backed deals, tied for the highest share in over a decade. Biotech startups made up half of the top 20 early-stage deals.
CVC-backed funding plummets in Asia. In 2024, Asia’s CVC-backed funding dropped 34% YoY to $7B — the lowest level since 2016. China is leading the decline, with no quarter in 2024 exceeding $0.5B in funding. CVCs remain wary of investing in the country’s private sector.

We dive into the trends below.

CVC-backed funding grows, deal activity slows

Global CVC-backed funding reached $65.9B, a 20% YoY increase. The US was the main driver, increasing 39% YoY to $42.8B. Europe also saw CVC-backed funding grow 18% to $12.3B, while Asia declined 34% to $7B.

$100M+ mega-rounds also contributed to the rise, ticking up 21% YoY to 141 deals worth over $32B in funding.

Meanwhile, deal count continued its decline, as both annual (3,434 in 2024) and quarterly (806 in Q4’24) totals reached their lowest levels in 6 years.

Annual deal volume fell by at least 6% YoY across each major region — the US, Asia, and Europe — with Europe experiencing the largest decline at 10%.

However, Japan-based CVC deal volume remains near peak levels, suggesting a more resilient CVC culture compared to other nations. Two of the three most active CVCs in Q4’24 are based in Japan: Mitsubishi UFJ Capital (21 company investments) and SMBC Venture Capital (15).

CVCs are all in on AI

AI is driving CVC investment activity, much like the broader venture landscape. In 2024, AI startups captured 37% of CVC-backed funding and 21% of deals, both record highs.

In Q4’24, the biggest CVC-backed rounds went primarily to AI companies. These include:

AI search startup Perplexity’s $500M Series C, backed by Nvidia’s NVentures
Coding AI copilot Poolside’s $500M Series B, backed by the venture arms for Citigroup, HSBC, Capital One, LG, eBay, and Nvidia
AI computing processor developer Lightmatter’s $400M Series D, backed by GV

CVCs are also investing in the energy companies powering the AI boom, such as Intersect Power, which raised the largest round at $800M (backed by GV).

Expect the trend to continue into 2025, as emerging AI markets mature further, such as AI agents & copilots for enterprise and industrial use cases; AI solutions for e-commerce, finance, and defense; and the computing hardware necessary to power these technologies.

The flight to quality continues

In 2024, the annual average deal size with CVC participation reached $27.3M, a 34% YoY increase and tied for the second highest level on record, exceeded only by the low-interest-rate environment of 2021.

Median deal size also increased, though only by 8% to $8.6M.

Even though the number of CVC-backed deals declined in 2024, the increase in average annual deal size reflects a focus on companies with strong growth prospects. CVCs are prioritizing quality and committing more funds to a select group of high-potential investments.

Early-stage deals dominate

Early-stage rounds (seed/angel and Series A) made up 65% of CVC-backed deals in 2024, tied for the highest recorded level in more than a decade.

In Q4’24, biotech companies were the early-stage fundraising leaders, accounting for 10 of the 20 largest early-stage deals. Biotech players City Therapeutics, Axonis, and Trace Neuroscience all raised $100M+ Series A rounds, with City Therapeutics and Axonis notably receiving investment from the venture arms of Regeneron and Merck, respectively.

Among all early-stage CVC-backed companies, the largest round went to Physical Intelligence, a startup focused on using AI to improve robots and other devices. Physical Intelligence raised a $400M Series A with investment from OpenAI Startup Fund.

CVC-backed funding plummets in Asia

Asia’s CVC-backed funding continued its downward trend in 2024, decreasing 34% YoY to $7B.

China was the main driver, with CVC-backed funding coming in at $0.5B or less every quarter in 2024. CVCs remain wary of investing in startups in the nation, which faces a variety of economic challenges, including a prolonged real estate slump, cautious consumer spending, strained government finances, and weakened private sector activity amid policy crackdowns.

In Japan, on the other hand, CVC activity remains robust. In 2024, funding with CVC participation ($1.7B) remained on par with the year prior, while deals (502) actually increased by 11%.

MORE VENTURE RESEARCH FROM CB INSIGHTS

The post State of CVC 2024 Report appeared first on CB Insights Research.

State of AI Report: 6 trends shaping the landscape in 2025

Isabelle Selles — Thu, 30 Jan 2025 14:00:00 +0000

2024 was a transformative year for the AI landscape.

Venture funding surged past the $100B mark for the first time as AI infrastructure players pulled in billion-dollar investments. A wave of M&A deals and rapidly scaling AI unicorns further underscored the tech’s momentum.

Download the full report to access comprehensive data and charts on the evolving state of AI across exits, top investors, geographies, and more.

Key takeaways include:

Massive deals drive AI funding boom. AI funding hit a record $100.4B in 2024, with mega-rounds accounting for the largest share of funding we’ve tracked to date (69%) — reflecting the high costs of AI development. Quarterly funding surged to $43.8B in Q4’24, driven by billion-dollar investments in model and infrastructure players. At the same time, nearly 3 in 4 AI deals (74%) remain early-stage as investors look to get in on the ground floor of the AI opportunity.
Industry tech sectors lose ground in AI deals. Vertical tech areas like fintech, digital health, and retail tech are securing a smaller percentage of overall AI deals (declining from a collective 38% in 2019 to 24% in 2024). The data suggests that companies focused on infrastructure and horizontal AI applications are drawing greater investor interest amid generative AI’s rise.
Outside of the US, Europe fields high-potential AI startup regions. While the US dominated AI funding (76%) and deals (49%) in 2024, countries in Europe show strong potential in AI development based on CB Insights Mosaic startup health scores. Israel leads with the highest median Mosaic score (700) among AI companies raising funding.
AI M&A activity maintains momentum. The AI acquisition wave remained strong in 2024, with 384 exits nearly matching 2023’s record of 397. Europe-based startups represented over a third of M&A activity, cementing a 4-year streak of rising acquisitions among the region’s startups.
AI startups race to $1B+ valuations despite early market maturity. The 32 new AI unicorns in 2024 represented nearly half of all new unicorns. However, AI unicorns haven’t built as robust of a commercial network as non-AI unicorns, per CB Insights Commercial Maturity scores, indicating their valuations are based more on potential than proven business models at this stage.
Tech leaders embed themselves deeper in the AI ecosystem. Major tech companies and chipmakers led corporate VC activity in AI during Q4’24, with Google (GV), Nvidia (NVentures), Qualcomm (Qualcomm Ventures), and Microsoft (M12) being the most active investors. This reflects the strategic importance of securing access to promising startups while providing them with essential technical infrastructure.

We dive into the trends below.

For more on key shifts in the AI landscape in 2025, check out this report on the implications of DeepSeek’s rise.

Massive deals drive AI funding boom

Globally, private AI companies raised a record $100.4B in 2024. At the quarterly level, funding soared to a record $43.8B in Q4’24, or over 2.5x the prior quarter’s total.

The funding increase is largely explained by a wave of massive deals: mega-rounds ($100M+ deals) accounted for 80% of Q4’24 dollars and 69% of AI funding in 2024 overall.

The year featured 13 $1B+ deals, the majority of which went to AI model and infrastructure players. OpenAI, xAI, and Anthropic raised 4 out of the 5 largest rounds in 2024 as they burned through cash to fund the development of frontier models.

Overall, the concentration of funding in mega-rounds reflects the high costs of AI development across hardware, staffing, and energy needs — and widespread investor enthusiasm around the AI opportunity.

But that opportunity isn’t limited to the largest players: nearly 3 in 4 AI deals (74%) were early-stage in 2024. The share of early-stage AI deals has trended upward since 2021 (67%) as investors look to ride the next major wave of value creation in tech.

Industry tech sectors lose ground in AI deals

Major tech sectors — fintech, digital health, and retail tech — are making up a smaller percentage of AI deals.

While the overall annual AI deal count has stayed steady above 4,000 since 2021, dealmaking in sectors like digital health and fintech has declined to multi-year lows. So, even as AI companies make up a greater share of the deals that do happen in these industries, the gains haven’t been enough to register in the broader AI landscape.

The data suggests that, amid generative AI’s ascendancy, AI companies targeting infrastructure and horizontal applications are drawing a greater share of deals.

With billions of dollars flowing to the model/infra layer as well, investors appear to be betting that the economic benefits of the latest AI boom will accrue to the builders.

Outside of the US, Europe fields high-potential AI startup regions

Although US-based companies captured 76% of AI funding in 2024, deal activity was more distributed across the globe. US AI startups accounted for 49% of deals, followed by Asia (23.2%) and Europe (22.9%).

Comparing median CB Insights Mosaic scores (a measure of private tech company health and growth potential on a 0–1,000 scale) for AI companies that raised equity funding in 2024 highlights promising regional hubs.

European countries dominate the top 10 countries by Mosaic score (outside of the US). Israel, which has a strong technical talent pool and established startup culture, leads the pack with a median Mosaic score of 700.

Overall activity on the continent is dominated by early-stage deals, which accounted for 81% of deals to Europe-based startups in 2024, a 7-year high.

The European Union indicated in November that scaling startups is a top priority, pointing to the importance of increased late-stage private investment in remaining competitive on the global stage.

AI M&A activity maintains momentum

The AI M&A wave is in full force, with 2024’s 384 exits nearly reaching the previous year’s record-high 397.

Acquisitions of Europe-based startups accounted for over a third of AI M&A activity in 2024. Among the global regions we track, Europe is the only one that has seen annual AI acquisitions climb for 4 consecutive years. Although the US did see a bigger uptick YoY (16%) in 2024, posting 188 deals.

In Europe, UK-based AI startups led activity in 2024, with 32 M&A deals, followed by Germany (18), France (16), and Israel (12).

Major US tech companies, including Nvidia, Advanced Micro Devices, and Salesforce, participated in some of the largest M&A deals of the year as they embedded AI across their offerings.

AI startups race to $1B+ valuations despite early market maturity

AI now dominates new unicorn creation. The 32 new AI unicorns in 2024 accounted for nearly half of all companies passing the $1B+ valuation threshold during the year.

These AI startups are hitting unicorn status with much smaller teams and at much faster rates than non-AI startups: 203 vs. 414 employees at the median, and 2 years vs. 9 years at the median.

These trends reflect the current AI hype — investors are placing big early bets on AI potential. Many of these unicorns are still proving out sustainable revenue models. We can see this clearly in CB Insights Commercial Maturity scores. More than half of the AI unicorns born in 2024 are at the validating/deploying stages of development, while non-AI new unicorns mostly had to get to at least the scaling stage before earning their unicorn status.

Tech leaders embed themselves deeper in the AI ecosystem

In Q4’24, the top corporate VCs in AI (by number of companies backed) were led by a string of notable names: Google (GV), Nvidia (NVentures), Qualcomm (Qualcomm Ventures), and Microsoft (M12).

As enterprises rush to harness AI’s potential, big tech, chipmakers, and other enterprise tech players are building their exposure to promising companies along the AI value chain.

Meanwhile, startups are linking up with these players to not only secure funding for capital-intensive AI development but also access critical cloud infrastructure and chips.

MORE AI RESEARCH FROM CB INSIGHTS

For information on reprint rights or other inquiries, please contact reprints@cbinsights.com.

The post State of AI Report: 6 trends shaping the landscape in 2025 appeared first on CB Insights Research.

State of Digital Health 2024 Report

Amrit Panjabi — Thu, 16 Jan 2025 14:00:30 +0000

Despite a small bump in funding, global digital health dealmaking continued to decline year-over-year (YoY) in 2024. In fact, digital health deal count dropped to its lowest annual total since 2014, reflecting a more cautious investment environment.

Mirroring trends in the broader venture market, AI proved to be a bright spot amid the downturn in digital health deals. In 2024, AI-focused companies secured 42% of digital health funding and accounted for 31% of deals — both record highs.

Download the full report to access comprehensive data and charts on the evolving state of digital health.

Key takeaways from the report include:

Digital health dealmaking continues to decline. Despite a slight increase in funding YoY, digital health deal count dropped again in 2024, hitting its lowest annual total (1,225) since 2014. Regionally, Europe saw the sharpest drop in deals, with a 29% YoY decline.
Fewer deals, bigger checks. The median digital health deal size jumped 39% YoY to hit a record high of $5.3M in 2024. The combination of declining deal volume and larger deal sizes suggests that selective investors are concentrating their resources on companies that meet heightened benchmarks in areas like clinical validation, commercial traction, and regulatory readiness.
AI takes center stage in digital health. In 2024, AI-focused companies captured 42% of digital health funding and 31% of deals — both record highs. The 5 largest AI-focused digital health deals were spread across diagnostics, drug development, and women’s health.
Digital health mega-rounds rebound in 2024. Mega-rounds ($100M+ deals) increased in 2024 after 2 years of decline, with the top 3 deals focused on drug discovery and development. Most top deals (7 out of 10) went to US-based companies, pointing to the region’s position as a hub for high-value digital health investment.

We dive into the trends below.

Digital health dealmaking continues to decline

Following 2 years of decline, digital health funding increased slightly in 2024, rising by 3% YoY.

However, digital health deal count fell for the third year straight in 2024. It dropped by 23% YoY to reach just 1,225 — its lowest level since 2014 — highlighting that investors remain cautious.

Regionally, Europe saw the steepest drop, with deal count shrinking 29% YoY to 258, despite a modest funding increase to $2.8B. Asia also experienced a decline, with deal count falling 19% YoY to 218, alongside a funding drop to $0.8B. While still the most active market, the US recorded a 19% YoY decline in deal count to 683, even as funding climbed to $11.7B.

Fewer deals, bigger checks

While the overall deal count fell, the median digital health deal size surged in 2024.

It climbed by 39% YoY to reach $5.3M — a record high.

This combination of factors suggests that selective investors are prioritizing companies that meet heightened benchmarks in areas like clinical validation, commercial traction, and regulatory readiness.

AI takes center stage in digital health

AI is commanding a growing share of digital health investment activity.

AI-focused companies captured 42% of total digital health funding and 31% of deal volume in 2024 — both record highs.

This surge reflects heightened investor confidence in AI’s ability to accelerate drug discovery, improve early disease detection, deliver personalized care, and more.

The top 2 AI-focused digital health deals in 2024 went to drug development platform Xaira Therapeutics. Freenome followed with a $254M Series F to expand its AI-driven early cancer detection tools, while Flo Health secured a $200M Series C to scale its personalized women’s health platform. BioAge Labs rounded out the top 5 with a $170M Series D to advance its AI-powered aging-related treatments.

As AI adoption grows across healthcare operations — from clinical and administrative workflows to drug development — healthcare providers and pharmaceutical giants will likely pursue strategic partnerships and acquisitions to maintain their competitive edge.

Digital health mega-rounds rebound in 2024

Digital health mega-round activity rebounded in 2024 after 2 consecutive years of decline, with deal count rising by 50% YoY to 33.

The top 3 mega-rounds of 2024 all went to drug discovery and development companies.

Xaira Therapeutics led the pack with two $500M rounds for its AI-driven drug discovery and development platform, followed by Formation Bio with a $372M Series D to advance its drug development efforts.

At the regional level, the US accounted for 7 of the top 10 mega-rounds in 2024, reflecting its position as a hub for high-value digital health investments.

MORE DIGITAL HEALTH RESEARCH FROM CB INSIGHTS

For information on reprint rights or other inquiries, please contact reprints@cbinsights.com.

The post State of Digital Health 2024 Report appeared first on CB Insights Research.

State of Fintech 2024 Report

Laura Kennedy — Tue, 14 Jan 2025 14:00:41 +0000

Fintech funding and dealmaking declined again year-over-year (YoY) in 2024, hitting their lowest levels in 7 years.

However, some positive signals are emerging, including growing deal sizes and a pickup in M&A, with a focus on cybersecurity capabilities.

Download the full report to access comprehensive data and charts on the evolving state of fintech across sectors, geographies, and more.

Key takeaways from the report include:

Fintech dealmaking continues downward trend in 2024. Annual fintech deals and funding both dropped to 7-year lows in 2024. While deals dropped by 17% YoY to a total of 3,580, funding fell by 20% to $33.7B.
One positive signal: bigger deals. The median fintech deal size increased to $4M in 2024 — marking a 33% jump YoY — with deal sizes rising across every major global region. Across fintech sectors, the biggest jump occurred in banking, where the median deal size rose by 70% YoY to reach $8.5M. Though fintech saw fewer deals overall in 2024, the increase in deal sizes suggests that investors are writing bigger checks for companies with compelling growth potential.
M&A activity is also picking up. Fintech M&A exits jumped 24% quarter-over-quarter (QoQ) to 189 in Q4’24, with Stripe’s $1.1B purchase of stablecoin platform Bridge marking the quarter’s largest deal. Overall, fintech saw a total of 664 M&A exits in 2024 (up 6% YoY) as financial services companies sought to diversify their capabilities and build full-service platforms.
Mature banking companies are catching the eyes of investors. Banking saw mid- and late-stage deals rise to 38% of its total deal volume in 2024 (vs. 21% in 2023), outpacing the 4 percentage point increase in fintech more broadly. Uncertainty about new banking technology and regulatory volatility — particularly among banking-as-a-service players — is likely driving investors to more proven solutions.
Payments tech ends 2024 as a bright spot. Five of the top 10 equity deals in Q4’24 went to companies building payments solutions, from mobile payments apps to cross-border payments enablement tools to platforms digitizing B2B payments. This concentration of large deals within payments tech reflects the ongoing push to digitize commerce and business exchanges.

We dive into the trends below.

Fintech dealmaking continues downward trend in 2024

In 2024, annual fintech funding and dealmaking both decreased YoY, hitting 7-year lows.

However, there are signs that the fintech market is steadying. The annual decline in funding was fintech’s smallest in 3 years. Meanwhile, at the quarterly level, funding rebounded to close the year strong, increasing 11% QoQ to reach $8.5B in Q4’24.

One positive signal: bigger deals

While there are fewer fintech deals overall, deal sizes are climbing.

Following 2 consecutive years of decline, the median deal size in fintech jumped 33% YoY in 2024.

Across fintech sectors, banking saw the biggest jump in median deal size in 2024 — a 70% YoY increase to $8.5M.

This shift reflects increased investor selectivity in the current market. Companies that pass more rigorous due diligence are attracting larger investments, even as overall deal volume remains constrained.

M&A activity is also picking up

Fintech M&A deals jumped 24% QoQ in Q4’24.

US-based companies captured 8 of the largest 10 deals, including the top 5. Stripe’s $1.1B acquisition of Bridge was the largest of the quarter.

The quarterly increase points to broader stirrings of an M&A resurgence: for the year, fintech M&A exits rose by 6% YoY to 664 deals in 2024.

Acquirers are boosting capabilities across functions. For instance, Stripe’s purchase of stablecoin platform Bridge gives the company a stronger standing in the reinvigorated market for digital assets and boosts its cross-border payment capabilities. The deal also emphasizes stablecoins’ growing role in driving accessibility and stability within crypto’s current wave.

Bolstering cybersecurity was also a focus for acquirers in Q4’24, pointing to financial services companies’ push to integrate fraud detection in their product offerings. For example, in November 2024, IT company N-able bought Adlumin, which deploys its solutions to financial firms, to enhance its cybersecurity capabilities. In October, Socure — specializing in digital identity verification — acquired Effectiv to enhance its AI-driven fraud detection capabilities.

Mature banking companies are catching the eyes of investors

Early-stage deals made up a larger share of fintech investment activity in 2022-23, suggesting that investors shifted their focus toward nascent innovation requiring smaller capital commitments during the market slowdown.

The trend shifted in 2024, particularly in the banking sector. While mid- and late-stage deal share rose by 4 percentage points YoY across fintech broadly, it jumped 17 percentage points in banking.

Recent volatility in banking-as-a-service — such as Synapse’s bankruptcy in April — and intensified regulatory scrutiny are likely driving investors to more proven solutions.

Payments tech ends 2024 as a bright spot

Five of the 10 biggest fintech deals in Q4’24 went to payments companies, capping a relatively strong quarter for the sector. Despite a YoY decline, funding to payments companies rose by 20% QoQ to $1.8B in Q4’24.

Argentina-based mobile payments company Ualá secured a $300M Series E in Q4’24, tying home equity release firm Splitero for the largest round of the quarter.

Of the top payments deals, two went to companies automating accounts payable and other aspects of B2B payments (Melio and ASAAS). The opportunity to digitize B2B payments continues to expand, especially since businesses in many geographies still rely on manual processes.

Related resources from CB Insights:

For information on reprint rights or other inquiries, please contact reprints@cbinsights.com.

The post State of Fintech 2024 Report appeared first on CB Insights Research.

State of Venture 2024 Report

Alex Lee — Tue, 07 Jan 2025 15:00:28 +0000

AI has reshaped the venture landscape, capturing a record share of funding (37%) and deals (17%) in 2024, including 5 of the year’s largest deals.

But beyond the momentum building in AI, global deal activity plunged 19% YoY to its lowest level since 2016, creating both challenges and opportunities for investors and corporate strategists.

Download the full report to access comprehensive data and charts on the evolving state of venture across sectors, geographies, and more.

Key takeaways from the report include:

AI is eating VC. In 2024, AI represented 37% of venture funding and 17% of deals — both all-time highs. AI infrastructure players raised all of the top 5 venture deals of the year, with 4 closing in Q4’24 alone — driving a 2-year high in quarterly funding. With nearly 3 in 4 (74%) AI deals being early-stage in 2024, investors are staking out early claims to reap the rewards of the tech’s potential.

Aside from AI, venture dealmaking is in a drought. Globally, deal activity fell 19% YoY to 27K in 2024 — its lowest annual level since 2016. The drop was most pronounced in countries like China (-33% YoY), Canada (-27%), and Germany (-23%). However, several countries in Asia — Japan, India, and South Korea — have bucked the downward trend. Their resilience suggests attractive investment conditions.

AI and industrial automation are common themes among the fastest-growing tech markets. Out of 1,400+ tech markets that CB Insights tracks, those with the highest rate of YoY deal growth include enterprise AI agents, genAI for customer support, industrial humanoid robots, and autonomous driving systems. Expect these technologies to continue maturing in 2025, increasing their disruptive potential.

Despite market uncertainty, early-stage valuations hit a record-high median of $25M in 2024. Investors are packing into early-stage rounds to ride the next major wave of value creation in tech, likely drawn by startups’ ability to now build products with less capital and fewer people thanks to AI tools and infrastructure. However, early-stage startups could face a reality check when they try to raise later-stage rounds if they have yet to prove they can sustain growth. Although mid- and late-stage deal valuations rebounded slightly vs. 2023, they remain muted compared to 2021 and 2022.

IPO timelines get delayed. From first funding to IPO, VC-backed companies that went public in 2024 waited a median of 7.5 years — 2 years longer than in 2022. Amid unfavorable market conditions, some late-stage players like Stripe and Databricks have resorted to raising additional equity funding or selling private shares in lieu of going public. This allows them to create liquidity for early investors and employees when the path to a public debut is rocky.

We dive into each trend below.

AI is eating VC

The 5 largest deals of the year all went to AI model and infrastructure players (led by Databricks’ $10B Series J, followed by a $6.6B round for OpenAI, two $6B rounds for xAI, and a $4B round for Anthropic). But the activity isn’t limited to the largest, most well-resourced AI players.

Across the board, AI companies are capturing a higher share of deal volume — nearly one in 5 deals (17%) now go to AI companies, almost triple the share from 2015 (6%). AI deal volume remained above 4,000 for the fourth year in a row.

The boom is providing tailwinds for every stage of the startup lifecycle, from early-stage companies — which take 3 out of 4 deals in AI — to startup exits. The AI M&A wave is in full force, with 2024’s 384 exits nearly rivaling the previous year’s record-high 397.

This trend will continue in 2025 as incumbents look to grab AI tech and talent and build end-to-end AI offerings. Get the full breakdown of what AI M&A means for corporate strategy in our Tech Trends 2025 report.

In Q4’24, the AI boom helped fuel a substantial rebound in global funding. The quarter’s funding tally reached $86.2B — a 2-year high, and an increase of 53% quarter-over-quarter (QoQ).

60% of that quarterly total, or $52B, came from mega-rounds (deals worth $100M+) — nearly tying Q1’21 (61%) for the highest share ever across venture.

At the same time, quarterly deal volume steadily declined throughout 2024, including slipping below 6,000 in Q4’24 for the first time since 2016.

Aside from AI, venture dealmaking is in a drought

Despite AI’s surge, most venture sectors face their worst dealmaking drought in nearly a decade, forcing investors to adjust their strategies. Many investors are taking a more selective and risk-off approach right now as they wait out macroeconomic volatility and geopolitical tensions.

Among major dealmaking countries and regions (those seeing 500+ deals per year), the slump was most pronounced in China (-33% YoY drop in deals), Canada (-27%), and Germany (-23%).

However, several countries in Asia bucked the trend and notched slim YoY gains: Japan (+2%), India (+1%), and South Korea (+1%). These countries have invested heavily in developing their startup ecosystems and may be benefiting indirectly from investors diverting funds away from China.

AI and industrial automation are common themes among the fastest-growing tech markets

AI and industrial automation are at the center of some of the fastest-growing markets in tech.

We filtered CB Insights’ 1,400+ tech markets for those with at least 20 equity deals over the last 2 years, then singled out those with the strongest deal growth YoY in 2024.

The enterprise tech and industrials sectors dominate, comprising 9 of the top 10 tech markets. Advancements in generative AI are fueling much of the activity in areas like humanoid robots and autonomous driving systems. Investors are also backing tech companies improving industrial processes like water treatment and purification, with deals to the market more than doubling YoY.

The enterprise tech and industrials sectors are also seeing a wave of hiring, as they lead in YoY headcount growth among all sectors. Industrials markets saw an average of 11% headcount growth last year, followed by enterprise tech markets with 10%.

Financial services and the consumer & retail industries are noticeably absent from the top 10 fastest-growing markets. Given the tough venture landscape, emerging technologies in these areas face an uphill battle.

Early-stage deals are showing strength

Globally, early-stage dealmaking represents one of the most vibrant areas of venture right now, with median deal size and valuation reaching all-time highs in 2024.

The seed/angel and Series A stages remain resilient despite the broader downturn, in part because investors view them as a safe haven to ride out late-stage challenges like constricted exit opportunities and capital constraints. Deal sizes and valuations for the mid- and late stages rebounded slightly vs. 2023 but were muted when compared to the boom times of 2021 and 2022.

Corporate strategy and development teams seeking out early-stage opportunities can see 900+ high-potential startups here. To identify these players, we looked at the nearly 11,000 VC-backed startups that raised seed or Series A rounds in 2024, then filtered for those with the healthiest businesses (600+ Mosaic score) and strongest management teams (600+ Management Mosaic score).

IPO timelines get delayed

Most tech firms continue to shirk the IPO market. Some are still waiting for macroeconomic conditions to stabilize, while others prefer to focus on topline growth without having to deal with the financial scrutiny that comes with being a public company.

This is pushing back the timelines for IPO-ready companies even further.

From first funding to IPO, VC-backed companies that went public in 2024 waited a median of 7.5 years — 2 years longer than in 2022.

While Q4’24 saw an uptick in global IPOs, activity remains down vs. historical levels. In the current climate, many late-stage startups will likely opt instead to raise more private funding to sustain operations and pay out employees or early investors.

Related resources from CB Insights:

The post State of Venture 2024 Report appeared first on CB Insights Research.

Venture Trends for 2025

ashley.tortorelli@cbinsights.com — Thu, 19 Dec 2024 14:41:32 +0000

The post Venture Trends for 2025 appeared first on CB Insights Research.

State of Insurtech Q3’24 Report

Chris Sekerak — Thu, 14 Nov 2024 14:00:36 +0000

Global insurtech funding held steady at $1.4B for the second consecutive quarter in Q3’24. However, unlike the prior quarter, most of the funding came from just 5 mega-rounds (deals worth $100M+).

Q3’24 also saw the most selective dealmaking environment in years, although there were notable bright spots — in the early stages of funding, in the life & health insurance segment, and among France’s insurtechs.

Download the full report to access comprehensive data and charts on the evolving state of insurtech across sectors, geographies, and more.

Below, we cover key shifts in the landscape, including:

Quarterly insurtech funding holds mostly steady from Q2’24, at $1.4B. In Q3, the funding was evenly split across both P&C and life & health (L&H) segments — one of just 3 quarters since 2020 where L&H insurtechs have rivaled P&C for quarterly funding.

Insurtech fared better in Q3’24 than the broader venture environment, which saw funding decrease 20% quarter-over-quarter (QoQ). In fact, on a year-over-year basis, insurtech funding grew in Q3 by 27%.

A majority of insurtech funding goes to $100M+ mega-round deals for the first time since Q3’22. Q3’24 saw mega-round funding and deals — $0.8B across 5 deals — surge to a 2-year high.

Altana AI, which offers a supply chain risk platform, raised the largest insurtech equity deal in 2024 so far ($200M Series C) from investors including Google Ventures and Salesforce Ventures. The deal valued Altana AI at $1B, making it the first new insurtech unicorn of 2024 so far. Insurtechs that offer Medicare Advantage plans raised 2 of the other mega-round deals, Devoted Health ($112M Series E) and Zing Health ($140M Series A).

Insurtech deal count falls to an 8-year low. Q3’24 saw global insurtech deal count decline to 77, falling 10% QoQ and 42% YoY. Q2’16 was the last quarter to see fewer insurtech deals (60).

Even so, the drop is in line with a broader decline in venture dealmaking. Also, across insurtech and the broader venture environment, the percentage of deals by deal stage (i.e., early, mid-, late, or other) has been without drastic swings in recent years.

The median early-stage insurtech deal size has reached a record high, increasing from $2.5M in 2023 to $4M in 2024 so far. This signals that investors remain bullish on early-stage dealmaking despite the broader decline in funding and deals.

Comparatively, the median early-stage insurtech deal size only reached $3M in 2022 amid the venture funding boom.

Three of the 10 largest insurtech deals in Q3’24 were early-stage.

France-based insurtechs raise 83% of Europe’s insurtech funding in Q3. Five France-based insurtechs raised a combined $385M in Q3’24, including mega-round deals for health insurer Alan ($193M Series F) and pricing platform Akur8 ($120M Series C).

Globally, only insurtechs from France and the US appeared among the 10 largest insurtech deals of the quarter.

RELATED RESEARCH FROM CB INSIGHTS:

The post State of Insurtech Q3’24 Report appeared first on CB Insights Research.

The State of AI Q3’24: Emerging Trends

Adya Pandey — Tue, 12 Nov 2024 19:34:03 +0000

The post The State of AI Q3’24: Emerging Trends appeared first on CB Insights Research.

State Of – CB Insights Research

State of Insurtech Q2’25 Report

DOWNLOAD THE STATE OF INSURTECH Q2’25 REPORT

Quarterly insurtech deal count dips below 100 again

Funding to P&C insurtech falls 89% from Q2’21 peak

$100M+ mega-round deals lead to a surge in L&H insurtech funding

ICHRA startups capture nearly 20% of insurtech funding

US-based startups raise 3 in 5 global insurtech deals

MORE INSURTECH RESEARCH FROM CB INSIGHTS

Insurtech’s Midyear Review

State of AI Q2’25 Report

DOWNLOAD THE STATE OF AI Q2’25 REPORT

Massive deals continue to drive the AI funding boom

Consolidation is in full force in the AI market

AI revenue multiples reflect investor confidence in startups’ growth potential

Tech market deals signal a shift from infrastructure to applications

The fastest-growing genAI startups highlight the rise of voice AI

MORE AI RESEARCH FROM CB INSIGHTS

State of Digital Health Q2’25 Report

DOWNLOAD THE STATE OF DIGITAL HEALTH Q2’25 REPORT

Funding fell as deal volume hit a 5-year low

AI companies captured more than two-thirds of digital health funding

Two digital health companies went public with $1B+ valuations

Deal sizes continue to rise in 2025 as investors prioritize larger rounds

MORE DIGITAL HEALTH RESEARCH FROM CB INSIGHTS

State of Fintech Q2’25 Report

DOWNLOAD THE STATE OF FINTECH Q2’25 REPORT

Fintech sector shows signs of recovery with two consecutive $10B quarters

US-based fintechs command record share of global investment

B2B fintech solutions attract the majority of large deals

Digital wealth management sees dramatic funding revival

M&A activity remains elevated

MORE FINTECH RESEARCH FROM CB INSIGHTS

State of Venture Q2’25: Midyear Outlook

State of Venture Q2’25 Report

DOWNLOAD THE STATE OF VENTURE Q2’25 REPORT

Top stories in Q2’25

1. Funding tops $90B for the third straight quarter, while deal count declines

2. Hard tech claims 6 of the top 10 largest deals

3. AI companies command funding premiums across sectors

4. Regulatory shifts push big tech from M&A to minority investments

5. CVC deals hit a 7-year low as the tariff threat looms

Breakout sectors of 2025

Stablecoin funding is on pace to shatter its previous record

Defense tech momentum continues

Quantum tech reaches an all-time high, halfway through the year

Corporate interest drives a surge in nuclear energy funding

RELATED RESOURCES FROM CB INSIGHTS:

State of Insurtech Q1’25 Report

DOWNLOAD THE STATE OF INSURTECH Q1’25 REPORT

Insurtech dealmaking increases for the first time in a year

Median insurtech deal size tumbles in Q1’25

Early-stage insurtech funding reaches a nearly 8-year low

Late-stage insurtech dealmaking paints a cautious growth picture

Silicon Valley sees 1 in 5 global insurtech deals

State of AI Q1’25 Report

DOWNLOAD THE STATE OF AI Q1’25 REPORT

AI funding reaches record $66.6B in Q1’25 as industry incumbents secure mega-rounds

Healthcare dominates the new AI unicorn pool

AI agent companies lead M&A activity amid increasing consolidation

MORE AI RESEARCH FROM CB INSIGHTS

The State of AI: Trends to Watch in 2025

State of CVC Q1’25 Report

DOWNLOAD THE STATE OF CVC Q1’25 REPORT

Deals continue their downward trend as investors remain selective

US companies dominate CVC investment dollars

AI continues to command CVC attention and dollars

Early-stage deals hold at the highest levels in over a decade

DOWNLOAD THE STATE OF CVC Q1’25 REPORT

Salesforce Ventures leads with the strongest Q1 portfolio

MORE VENTURE RESEARCH FROM CB INSIGHTS

State of Digital Health Q1’25 Report

DOWNLOAD THE STATE OF DIGITAL HEALTH Q1’25 REPORT

Investors are concentrating capital in fewer, higher-quality bets

Mega-rounds are back, and AI is claiming most of them

AI companies are capturing more than half of digital health funding

Billion-dollar deals mark a digital health M&A revival

Unicorn creation rebounds, driven by AI-native platforms

MORE DIGITAL HEALTH RESEARCH FROM CB INSIGHTS

DOWNLOAD THE STATE OF DIGITAL HEALTH Q1’25 REPORT