Among the top 50 private companies globally, the US and China account for 86% of the list, while AI startups represent 40%. These companies are reshaping industries and, in some cases, surpassing their public market competitors in valuation. 

OpenAI is reportedly poised to hit a roughly $500B valuation — putting it closer to the ranks of big tech than any other startup. At the same time, the current top 50 companies’ combined valuation represents under half of Nvidia’s current market cap of $4.3T, underscoring the relative scale of public tech giants.

Using CB Insights data, we analyzed the top 50 most valuable private companies globally to identify where value creation is happening in private markets. Below are the key patterns emerging from the group.

Track all 1,200+ unicorns

Key takeaways

• The United States and China dominate the global unicorn landscape, representing 86% of the top 50 companies. The US leads with 35 companies (70%), while China contributes 8 companies (16%), showing how concentrated tech innovation and capital formation remains within these two tech regions. The remaining 6 countries — Australia, France, Germany, Singapore, Sweden and the UK — each have only 1-2 representing companies.
• AI companies represent 40% of the top 50, signaling the market’s confidence in AI as a primary driver of economic value. These companies range from the big names building foundation models like OpenAI and Anthropic to specialized players tackling applications like defense systems (Helsing, Anduril).
• Abundant private funding enables companies to delay going public while continuing to scale. Today, startups are going public an average of 16 years after being founded, 4 years later than just a decade ago. Databricks recently surpassed its public competitor Snowflake in valuation ($100B) at its recent $1B Series K round. Meanwhile, ByteDance ($300B valuation), generated more revenue than Meta in Q1’25 while staying private. With plenty of private capital available and employees able to sell shares on secondary markets, companies can grow much larger without going public.
• Secondary transactions are increasingly driving valuations, with 7 consecutive quarters of YoY growth in transaction activity among VC-backed companies. Recent secondary sales at companies like Canva (valued at $42B, up from $32B in 2024), Revolut (valued at $75B, up from $45B), and OpenAI’s upcoming $10.3B secondary sale at a rumored $500B valuation demonstrate this trend. As startups stay private for longer, secondary sales are providing both liquidity and fresh valuations. 

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Advancements in AI and quantum computing are driving this growth, helping these platforms reach high enough accuracy levels to replace physical trials and rival traditional lab methods, while operating at a fraction of the cost and time.

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Several factors are driving this recovery. Recent cuts to public cancer research funding are leaving startups to drive innovation, while AI advances are accelerating precision medicine’s transition from development to standard care. Precision medicine customizes treatments based on individual genetic, molecular, and biological factors rather than applying uniform therapies, unlocking market opportunities for tech-enabled diagnostics and treatment selection.

Companies that can harness these technologies are attracting attention from healthcare incumbents, both through investments and strategic partnerships. With cancer rates continuing to rise and treatment revenues growing substantially over the past decade, this momentum seems likely to continue.

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To create the 2025 list, we analyzed 10 years of CB Insights’ Business Graph data, evaluating 12,000+ venture firms on portfolio outcomes (unicorns and exits), share of rounds led, portfolio quality via Mosaic Score, capital efficiency, and entry discipline. Smart Money VC portfolios offer a front-row view of where the sharpest investors are placing their bets. Use the list as an early indicator to spot emerging markets and promising founders.

Which VC firms are on the Smart Money list?

Firms are presented in alphabetical order.

1. Accel
2. Andreessen Horowitz
3. Bain Capital Ventures
4. Battery Ventures
5. Bessemer Venture Partners
6. Felicis
7. First Round Capital
8. Founders Fund
9. General Catalyst
10. Google Ventures
11. Greylock Partners
12. Index Ventures
13. Institutional Venture Partners
14. Kleiner Perkins
15. Lightspeed Venture Partners
16. Meritech Capital Partners
17. New Enterprise Associates
18. Norwest Venture Partners
19. Notable Capital
20. Redpoint Ventures
21. Salesforce Ventures
22. Sapphire Ventures
23. Sequoia Capital
24. Spark Capital
25. Thrive Capital

CBI customers: See Smart Money’s latest bets

How Smart Money VCs are outperforming the market

Our 2025 edition of Smart Money VCs:

• 6.5x more likely than the average VC to back a future unicorn
• 2.2x more exits per firm, either through M&A or IPO
• 2.3x higher share of rounds led, shaping pricing and syndicates

Smart Money syndicates amplify signal. The top pairs share dozens of portfolio companies — Sequoia & Andreessen Horowitz (43), General Catalyst & Andreessen Horowitz (42), and Sequoia & Lightspeed (36). Most widely backed across the cohort: Chainguard, Figma, and Wiz (each with 7 Smart Money backers).

Smart Money firms have also been the dominant backers of the AI wave — they backed 52% of new AI unicorns in 2023, 73% in 2024, and 77% in 2025 YTD — and that exposure is translating into outlier outcomes.

Since 2015, Smart Money VCs have backed 80 companies that exited at $10B+ — roughly 100x the $100M median exit. The largest Smart Money exits include Uber ($75.5B, 2019), Coinbase ($65.3B, 2021), and Coupang ($56.6B, 2021).

Mosaic shows where they’re headed next. Smart Money portfolios skew to higher Mosaic Scores — CB Insights’ 0–1,000 predictive rating of private-company health. The average portfolio Mosaic is 628 — about 2.6x the VC norm.

And the edge is most visible at the very top of the distribution: more than 65% of companies in the top 1% of Mosaic Scores are backed by a Smart Money VC. Top firms by average portfolio Mosaic include Meritech (759), IVP (741), and Thrive Capital (688). Standout companies in 2025 include Zepto, Bilt, Glean, Rippling, and Anthropic.

Where Smart Money is deploying now

Smart Money is still leaning into AI — especially agentic applications.

Over the last 18 months, agent-related categories led by deal count: coding agents and copilots (28 deals), agent development platforms (24), enterprise workflow agents and copilots (20), and legal agents and copilots (17). Infrastructure remained active as well, with 17 deals into LLM developers. Top recent AI deals by Mosaic include Glean (enterprise AI agents), Augment Code (coding AI agents), and ElevenLabs (voice AI).

Our M&A probability model points to cybersecurity as the most likely near‑term exit pool among Smart Money portfolios, with companies like Tenex.ai ranking highest. Activity is accelerating — highlighted by Google’s $32B acquisition of Smart Money–backed Wiz in March 2025. For acquirers, targeting Smart Money portfolio or syndicate companies can streamline diligence and post‑deal integration.

Outside the US, cybersecurity is also drawing Smart Money. Since Jan’24, Accel (84 deals), General Catalyst (64), and Lightspeed (55) are the most active by ex‑US deal count; their portfolios include companies like Tines, Cato Networks, and Torq.

Methodology

What is the CB Insights Smart Money list?

The Smart Money list is an unranked collection of the top 25 venture capital firms worldwide. We analyzed 12,000+ venture investors with 10+ unique portfolio companies using 10 years of CB Insights’ Business Graph data (2015–2025) to surface the highest performers via our Smart Money Index.

What makes a VC “smart”?

​​Comparable lists in other asset classes rank firms based on investment performance, but returns data is hard to come by in the VC world, and rates of return can be easily manipulated.

Our methodology factors:

• Portfolio outcomes — unicorn count/share and exit count/share
• Deal leadership — share of rounds led
• Portfolio quality — average CB Insights Mosaic Score
• Capital efficiency — portfolio value created per dollar raised
• Entry discipline — median stage at first check

Inputs were normalized and combined into the Smart Money Index. The top 25 became the 2025 Smart Money cohort.

What can I do with this collection?

Explore the Smart Money Expert Collection on the CB Insights platform to filter deals, build screens, and make faster decisions.

If you are a venture investor and want to submit data on your portfolio companies to allow us to better score you in the future, please reach out to researchanalyst@cbinsights.com.

RELATED RESOURCES FROM CB INSIGHTS:

• All 100 AI unicorns since ChatGPT launched
• State of Tech Exits H1’25
• The top angel investors in AI
• Are AI unicorns starting to move beyond hype?
• Book of Scouting Reports: Enterprise AI Agents

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M&A volume stayed flat in the first half of the year, and the IPO market remained muted, though there are early signs of a potential second-half recovery. In the meantime, capital continues to flow into private tech companies at record levels, including a surge in secondary transactions. This is giving private tech companies more runway (and more reason) to delay public listings.

New exit models are also gaining traction. From large minority stakes to reverse acqui-hires, big tech companies are finding ways to access talent and technology without triggering regulatory review. These deal structures are starting to reshape how value is created, captured, and distributed across the ecosystem — for founders, investors, and employees alike.

Taken together, these trends point to a broader shift: private markets are becoming the dominant venue for value creation and capture in tech. With that comes the need for better private market investing infrastructure, including real-time data and context, turning private company intelligence into a new competitive advantage. 

Below, we break down the top stories from this first half of the year and our projections for the rest of the year, including:

• AI and $100M+ deals drive tech M&A momentum
• Signs point to tech IPO market rebound in H2’25
• Private tech markets top $2T in equity funding
• Secondaries get bigger and pricier
• New exit models emerge amidst the AI talent war

Download the full report to access comprehensive CB Insights data and charts on the evolving state of tech exits, in partnership with EquityZen.

Top stories in H1’25

1. AI and $100M+ deals drive tech M&A momentum

Tech M&A activity has remained stubbornly flat since Q4’23, stagnating at just over 2,000 transactions per quarter. We project Q3’25 to follow the same trajectory, with 2,040 deals.

Despite flat volume, this year is shaping up to be a record year in terms of M&A deal value, driven by an increase in the number of $100M+ acquisitions. These large transactions represent 4.7% of deal share so far this year, up from 3.8% from all of 2024, and a level not seen since 2021.

AI has also emerged as a bright spot, as corporations race to grab AI tech & talent.

M&A activity in AI reached record levels in Q2’25 at 192 deals, pushing AI’s share of tech M&A to 7.5% so far this year — almost double its share in 2021. Private companies have notably led some of the largest AI acquisitions in the first half of 2025, with OpenAI acquiring Io for $6.5B and Databricks spending $1B to buy Neon. 

The AI race is also pushing big tech companies to rethink their M&A strategy, after years of muted activity. 

Meta scooped up voice AI startups PlayAI and WaveForms this summer — marking its first acquisition since 2022 — in a bid to win the race to build the future of human-machine interactions. The company is betting that voice will become the dominant interface for interacting with AI.

During the company’s Q3’25 earnings call, Apple’s CEO mentioned being open to larger M&A deals to help accelerate its roadmap. This marks a significant move away from Apple’s historical focus on smaller acquisitions.  

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.

2. Signs point to tech IPO market rebound in H2’25

The global tech IPO market has remained muted during the first half of 2025, with 122 tech companies going public, in line with the numbers from 2024. But recent activity signals things may be picking up.

Figma successfully went public last month, in an IPO often referred to as a test of the public market’s appetite for tech companies. The company was valued at just over $16B at IPO and now boasts a market cap of $39B (as of 8/20/2025).

A few weeks later, crypto exchange platform Bullish followed a similar path, raising $1.1B in at a $5.4B valuation. The company is now trading at a 60%+ premium to its IPO price.

These recent examples have pushed several tech companies (crypto in particular) to announce they had filed to go public, reviving hopes of a tech IPO market rebound. Based on current trends, we project 84 tech IPOs for Q3 ’25 — above the 2-year quarterly average of 72.

Find 40+ blockchain companies with a high probability of going public in the next 2 years

But any rebound is likely to be modest, with private tech companies expected to remain private for longer and the role of IPOs potentially shifting to becoming a clearinghouse rather than a capital-raising mechanism, as predicted by Jared Carmel, Managing Partner, Manhattan Venture Partners:

“We’re witnessing a fundamental shift in how tech companies approach public markets. The average age at IPO has increased dramatically, from under 4 years in 2000 to 12 years in 2015 and nearly 16 years today. I expect this trend to accelerate, with companies staying private for 20+ years becoming the new norm.

The aggressive IPO pops we’ve historically seen are fundamentally unfair to founders and long-term investors who actually built these companies. Over the next several years, you’re going to see VCs, private equity, and sovereign wealth funds step in to extract maximum value before these companies ever go public. When they eventually do an IPO, they’ll go public at fair market value without the pop — essentially using public markets as a clearinghouse rather than a capital-raising mechanism.

This shift is already playing out in the data. We’re seeing record levels of private funding, exceeding $2 trillion in cumulative investment, and explosive growth in secondary transactions. The real value creation and liquidity will increasingly occur in private markets, rather than public ones. With companies staying private for two decades, secondary liquidity becomes absolutely critical — employees, early investors, and founders can’t wait 20 years for an exit.”

3. Private tech markets top $2T in equity funding

Private tech companies are staying private longer and now have more capital than ever to do so. 

Over $2T in cumulative equity funding has poured into private tech markets to date, with 90% raised in just the last decade. That funding has enabled companies to keep scaling before tapping the public markets. Today, startups are going public an average of 16 years after being founded, 4 years later than just a decade ago.

Late-stage rounds have also reached new extremes, with Databricks joining the exclusive “Series K” club in July. Just 16 Series K rounds have ever been raised — half in the last 5 years — signaling the growing normalization of ultra-late-stage private fundraising.

Private market check sizes have also grown dramatically. The past 18 months alone account for the largest Seed, Series A, Series B, Series D, and Series E+ rounds on record. And more dry powder is on the way: a recent executive order in the US is opening the door for 401(k) retirement accounts to invest in private markets, potentially unlocking a new wave of capital for private tech companies.

As regulatory barriers fall and new investment vehicles emerge, private tech company investments will increasingly define institutional — and eventually retail — portfolios. 

But there’s a catch. 

Private companies operate in information shadows, beyond public view. Institutions will increasingly need real-time data and context on companies not subject to quarterly reporting, turning private company intelligence into a new competitive advantage. 

4. Secondaries get bigger and pricier

The last 7 quarters have seen YoY growth in secondary transaction activity among VC-backed companies, with no signs of slowing down. As tech companies stay private longer and valuations continue to climb, secondaries are playing a growing role in providing liquidity.

In August 2025, OpenAI reportedly launched a tender offer at a $500B valuation, a sharp jump from its last reported $300B. The offer gives current and former employees a chance to cash out while attracting new capital from institutional buyers. Canva followed a similar playbook, recently conducting a secondary sale at $42B. That’s $10B higher than its October 2024 valuation, which was also set during a prior secondary transaction.

These moves are helping long-time employees and early investors realize returns, while giving latecomers a shot at high-growth companies.

Investor demand is heating up too. According to EquityZen, average discounts in secondary markets have compressed to just 13% below last-round valuations — the lowest level observed between Q1’23 and Q2’25. That pricing shift reflects growing competition and perceived upside, even in companies potentially years from IPO.

While large players like SpaceX, Ripple, and OpenAI continue to dominate transaction volume, interest is expanding to smaller unicorns and breakout startups. In Q2’25, 7 of EquityZen’s top 10 secondary movers had Mosaic scores over 800 and valuations north of $1B, including names like Axiom Space, Brex, and Skild AI.

Explore 500+ private tech companies with strong secondary potential

As secondary markets mature, they’re reshaping liquidity expectations — and giving investors new ways to get exposure to private tech winners without waiting for the IPO window to reopen.

5. New exit models emerge amidst the AI talent war

The intensifying race for AI talent is driving a new wave of unconventional exits in the tech ecosystem, bypassing traditional M&A while still delivering strategic value to acquirers. 

Tight regulation has pushed big tech companies to shift away from full takeovers and toward deal structures that offer access to technology and, more importantly, talent, without triggering antitrust alarms.

Large minority stakes have emerged as one such mechanism. In Q2’25, Meta invested $14.8B for a 49% stake in Scale, marking the largest private funding round of the quarter. As part of the deal, Meta hired Scale’s CEO and founder, Alexandr Wang. At their current pace, big tech companies are on track to complete 14 corporate minority deals in 2025.

Reverse acqui-hires  — where acquirers buy the team (fully or partially) and license the technology — are also gaining momentum. These hybrid transactions often include lucrative licensing fees that serve as a partial liquidity event for investors.

Notable examples include:

• Google hiring key personnel from Windsurf to join its DeepMind division, including CEO Varun Mohan and co-founder Douglas Chen 
• Amazon hiring key members of Adept
• Microsoft bringing in employees from Inflection AI

These transactions let acquirers cherry-pick talent and assets without facing regulatory hurdles or needing to buy out entire cap tables.

But it’s not just big tech adapting;  major LLM developers are adopting similar tactics. OpenAI and Anthropic have collectively made 3 acqui-hires so far in 2025 — Context.ai, Crossing Minds, and Humanloop.

These nontraditional exits may complicate fundraising and hiring for AI startups, as investors and employees weigh the risk of being bypassed in partial team acquisitions. In response, both groups may begin negotiating protective terms to ensure they aren’t left behind.

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Combining CB Insights’ proprietary data and AI, scouting reports provide insight into each company’s:

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AI companies drove the surge, accounting for half of all mega-rounds. Many are building foundation models tailored to complex real-world use cases like robotics and healthcare.

Using CB Insights’ Business Graph, our monthly Book of Scouting Reports offers an in-depth analysis of every private tech company that has raised a funding round of $100M or more, to spotlight where capital is concentrating, which startups are gaining momentum, and who’s shaping the next wave of market disruption.

Download the book to see all 50 scouting reports.

Key takeaways from July’s mega-rounds include: 

• Clinical AI moves from development to scaling, with both Aidoc (a clinical AI foundation model developer) and Ambience (an AI medical scribe) having raised mega-rounds last month to build upon their early success and scale across more health systems. Last month also saw OpenEvidence and Tala Health raise $100M+ rounds to bring agentic AI solutions to clinicians, with the latter joining the fast-growing AI unicorn list. 
• Investors keep betting big on the next wave of the AI boom, physical AI. Recent commercial breakthroughs in the autonomous vehicle space and heightened interest in the humanoid space are driving capital toward physical AI infrastructure. This includes robotics foundation models (Genesis AI, TARS), and hardware platforms for embodied AI model training (Galaxea AI). China-based Meituan led both the $100M Series A extension in Galaxea AI and the $125M Seed round in TARS, as it doubles down on physical AI investments.
• AI newcomers are openly taking on tech giants. Half of last month’s mega-rounds went to AI companies, which accounted for 7 of the 13 new unicorns minted during that time. Some of these companies are directly targeting incumbents such as Reka AI which positions itself as a lower-cost alternative to OpenAI or Anthropic, and Perplexity which targets Google‘s core search business with its new browser product. 
• Fintech is minting a new class of financial services challengers.  Fintech companies accounted for more mega-round deals than any other vertical in July, including 2 of the top 4 largest rounds. Ramp’s valuation jumped from $16B to $22.5B in mere weeks, while Bilt more than tripled in value, from $3.3B to $10.8B. Beyond fundraising, fintech leaders are pursuing aggressive expansion strategies. iCapital raised $820M last month to accelerate its acquisition strategy focused on seizing the private markets opportunity. 

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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.

Explore the top 20 AI agent startups by revenue

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.

Check out Ledgebrook, Reserv, and more 2024 Insurtech 50 winners

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.

CBI customers: Use our agents to uncover insights for Chapter

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.

CBI Customers: Check out leaders in our ICHRA platforms market

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.

Check out the top 50 venture investors in France

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

• 100 real-world applications of genAI across financial services and insurance
• Insurance’s new frontier: 3 innovation imperatives for 2025 and beyond
• Our 6 predictions for the insurance space in 2025

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

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.

See how markets stack up in the CBI Market Index

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

• The AI agent market map
• AI 100: The most promising artificial intelligence startups of 2025
• AI agent startups are becoming revenue machines — here are the top 20 ranked
• What’s next for AI agents? 4 trends to watch in 2025
• Pharma AI readiness: How the 50 largest companies by market cap stack up

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

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. 

Track 11K+ digital health companies

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.

Explore 100+ healthcare AI companies funded in Q2’25

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.

Explore digital health IPOs in the last 4 quarters

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. 

Explore this quarter’s mega-rounds

MORE DIGITAL HEALTH RESEARCH FROM CB INSIGHTS 

• State of Digital Health Q1’25 Report
• State of Venture Q2’25 Report
• Pharma AI readiness: How the 50 largest companies by market cap stack up
• The AI in drug R&D market map
• The humanoid robots market map

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

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.

Top stories in Q2’25

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

Venture funding reached $94.6B in Q2’25, marking the second-highest quarterly figure since Q2’22 and the third straight quarter to surpass $90B.

While funding dipped slightly from Q1’25, the decline reflects normalization after OpenAI’s $40B raise inflated numbers in Q1. In fact, Q2 remained elevated even as foundation model developers accounted for just 3% of total capital, down from 36% in Q1’25 and 29% in Q4’24. This shift signals a broadening of venture activity beyond foundation models into the broader AI ecosystem and adjacent hard tech sectors.

With this continued momentum, annual funding is projected to reach nearly $440B, a 53% increase from 2024, pointing to a sustained recovery in venture investment.

At the same time, deal volume continues to decline, reflecting greater investor selectivity. Q2 saw just 6,028 deals — the lowest quarterly total since Q4’16. This puts 2025 on pace for around 25,000 deals, or nearly half the volume seen in 2022, even as total funding approaches similar levels.

While investors are pulling back on the number of deals, they’re deploying more capital per investment: the median deal size hit a new high of $3.5M in 2025 YTD. Rising check sizes and falling deal count underscore a shift toward fewer, higher-conviction bets.

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

Six of the 10 largest deals in Q2’25 went to hard tech companies, which are firms building capital-intensive physical products.

CBI customers: Track the highest funding startups in Q2’25

This surge is driven by macro forces such as onshoring initiatives, clean energy investment, and the rise of physical AI, which is enabling new capabilities across robotics, autonomy, and industrial systems.

Mega-rounds ($100M+ deals) spanned multiple sectors:

• Montera Infrastructure: $1.5B for hyperscale data center solutions
• Commonwealth Fusion Systems: $800M for commercial nuclear fusion
• Neuralink: $650M for brain-computer interfaces

Geopolitical tensions are also pushing capital toward defense, where startups are securing large rounds:

• World View: $2.6B for high-altitude aerospace platforms
• Anduril: $2.5B for autonomous defense systems and defense connectivity platforms
• Helsing: $693M for AI-powered defense applications

Across the board, defense tech startups are now commanding a median revenue multiple of 17.4x, edging out AI companies at 17.1x and all other major sectors. This signals high investor confidence and competition, driving premium valuations across the defense tech sector.

With investor appetite moving toward physical infrastructure and embodied AI, the rise of hard tech represents a shift likely to define the next chapter of venture investing.

3. AI companies command funding premiums across sectors

The venture market is experiencing a pronounced “AI premium,” with median deal size for AI companies reaching $4.6M in 2025 — over $1M more than the broader market. 

But the premium isn’t just financial. AI companies also score higher on CB Insights’ Mosaic Score (success probability) and Commercial Maturity (ability to compete and partner) across most sectors, signaling stronger fundamentals and market readiness in the eyes of investors.

AI companies in auto tech — with most focused on autonomous driving — are commanding the highest premium. Their median deal size is $20.6M higher than non-AI auto tech peers, and their average Mosaic score is 99 points greater. This quarter, the largest AI auto tech deal went to Applied Intuition, which raised a $600M Series F round at a $15B valuation.

Robotics and cybersecurity follow closely, with AI firms in those sectors securing median deal sizes $10.7M and $6.4M larger than their non-AI peers.

Team pedigree is further amplifying the premium. Thinking Machines Lab — founded by former OpenAI CTO Mira Murati alongside veterans from OpenAI, Google, Meta, and Mistral AI — raised a record-breaking $2B seed round at a $10B valuation, making it the most valuable seed-stage startup ever. 

The deal reflects an increasingly common “go big or go home” investing mentality, as investors make outsized bets on high-credibility AI teams.

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

Big tech M&A — which includes M&A from Alphabet, Amazon, Apple, Microsoft, Meta, and Nvidia — is entering a sustained downturn. Annual deal activity is projected to hit just 12 transactions in 2025, a steady decline from 66 deals in 2014. 

US regulatory tightening caused M&A activity to collapse from 30+ deals in 2022 to just 8 deals in 2023 — the steepest single-year decline on record.

CBI customers: Track big tech M&A activity

Big tech companies are adapting by taking large minority stakes, allowing them to circumvent federal antitrust review while still gaining strategic influence and access to key technologies. For example, Meta invested $14.8B in Scale — the largest funding round of Q2’25 — for a 49% stake, as did Microsoft with its recent investments in OpenAI. 

In 2025 YTD, big tech is on pace for 14 corporate minority deals, an increase from levels before the regulatory shift.

Big tech’s shift reflects broader M&A weakness across the market. Global activity has fallen 34% from 3,103 deals in Q1’22 to 2,053 deals in Q2’25, driven by high interest rates that have made financing more expensive and economic uncertainty that has made companies more cautious about acquisitions.

However, acquisitions of AI companies is one area where M&A is increasing. Activity reached record levels in Q2’25 at 177 deals — over double the 5-year quarterly average of 84 deals. This surge reflects companies’ need to acquire AI capabilities quickly rather than build them internally, as AI becomes essential for staying competitive.

While falling interest rates will help smaller deals rebound and provide a modest tailwind to overall M&A activity, we do not expect deal volumes to approach peak years. Big tech and other large corporations will remain constrained by regulatory scrutiny.

We are likely entering a new era where strategic partnerships and minority investments replace traditional M&A as a growth mechanism for major corporations.

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

Corporate venture capital dealmaking has reached its lowest point in over 7 years, as CVC-backed investment totaled just $17B across 742 deals, down 8% quarter-over-quarter and representing the weakest performance since Q1’18.

CVC activity has fallen dramatically from its Q1’22 peak due to broader market pressures, including high interest rates and economic uncertainty. Tariff concerns are likely adding further burden to an already weakened market.

Despite fewer deals, median CVC-backed deal sizes have reached their highest levels since 2021. This suggests that CVCs are concentrating capital on fewer, higher-conviction investments.

CVCs are also collaborating more frequently. Deals involving 3+ CVCs reached a record high of 32% in Q2’25, reflecting both strategic necessity and market conditions: larger funding rounds in capital-intensive sectors like AI and hard tech may require multiple corporate partners to provide sufficient capital. At the same time, competition for access to the hottest technologies drives CVCs to team up rather than risk being shut out.

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.

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RELATED RESOURCES FROM CB INSIGHTS:

• State of Venture Q1’25 Report
• The AI agent market map
• 7 tech M&A predictions for 2025
• State of AI Report: 6 trends shaping the landscape in 2025
• 15 tech trends to watch closely in 2025

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In response, pharma companies are investing heavily in AI to discover drugs faster and navigate industry challenges more effectively through AI implementation. Those that aren’t investing risk falling behind competitors.

We analyzed the activity of the top 50 global pharma companies by market cap, together with their subsidiaries. Using CB Insights data on investments, acquisitions, partnerships, and earnings transcripts, we examined each entity’s AI activity and then ranked them based on their preparedness to evolve with the rapidly changing AI landscape.

Please click to enlarge.

Key takeaways

• This year’s pharmaceutical AI readiness rankings show tight competition as supply chain concerns drive companies to build domestic AI-integrated facilities. Just 3.9 points separate second-place Merck KGaA (70.7) from fifth-place Roche (66.8), compared to an 11-point gap in 2023. These new domestic facilities will serve as testing grounds for large-scale AI deployment in the coming years, determining which companies gain lasting competitive advantages.
• The pharma AI leaders are playing a dual-pronged game, cracking the AI-readiness code through complementary strategies of capital deployment and strategic alliances. Lilly and Merck KGaA lead on investments (13 and 10, respectively, since August 2023), while Roche and Bayer dominate business relationships (22 and 21, respectively). External collaboration drives top rankings as breakthrough innovations increasingly emerge from partnerships rather than internal development alone.
• Oncology has established itself as the top priority for pharma AI partnerships. This field captures one-third of all partnerships, with top startups collaborating with major pharma across the entire care continuum, from tumor profiling (Caris Life Sciences) to patient monitoring (Huma).

Pharma AI arms race intensifies as supply chain fears drive domestic facility buildout

The pharmaceutical AI landscape was particularly competitive this year, with just 3.9 points separating second place from fifth place, compared to an 11-point difference in 2023’s list. This tight clustering signals AI readiness has evolved from a competitive advantage for select leaders into a strategic imperative across the entire industry. Strong execution scores throughout the industry drive this competition, stemming from three common internal AI initiatives among top performers: new AI-integrated facilities, internal LLMs, and drug discovery platforms. 

AI-integrated facilities

Supply chain disruptions from tariffs and geopolitical tensions have catalyzed massive investments in domestic facilities, with nearly every major pharma company committing billions to new US and EU manufacturing and research centers. The biggest pledges have come from J&J at $55B, Roche at $50B, and Eli Lilly at $27B.

Beyond just replacing capacity, these proposed facilities present the opportunity to execute comprehensive digital transformation strategies, incorporating automation, IoT sensors, and AI into their core workflows. Planned AI integration spans from predictive maintenance to operational optimization. These new facilities will serve as testing grounds for the large-scale deployment of AI and automation over the next several years, with companies that execute integrations most effectively gaining competitive advantages in efficiency and innovation.

Internal LLMs

Internal LLMs have become the second pillar of pharma AI deployment, with companies either developing proprietary systems or partnering with big tech to enable the automation of data querying and document processing. For example, Pfizer‘s Amazon-powered Vox platform demonstrates how companies are deploying these tools for internal researchers’ use, while companies like Merck & Co and Bayer have implemented comprehensive LLM systems across business units.

Drug discovery platforms

Drug discovery platforms constitute the third common deployment area, with virtually every top-10 company building internal AI systems to analyze data, predict drug-target interactions, and guide experimental design. Examples include Sanofi’s CodonBERT platform to aid in mRNA design and AbbVie’s ARCH platform for consolidating data and aiding in target discovery. 

These trends illustrate that AI readiness has shifted from preparedness for emerging technology to effective implementation and agility, enabling organizations to stay at the cutting edge. The scramble among major pharma companies reflects this new reality: it’s no longer about getting ready for AI but about not being left behind in its application.

External activity drives top rankings

All AI-readiness leaders invested strongly in internal initiatives; what differentiated those at the top was their external activity, both partnerships and deal-making. 

Eli Lilly, this year’s top performer, made the most dramatic leap in the rankings, jumping from #14 in 2023 to #1 this year. The company’s record-breaking GLP-1 profits powered increased investment activity, including substantial AI investments. With this financial windfall, Lilly doubled its total direct investment spending from 2022 ($0.7B) to 2024 ($1.5B), which translated directly into AI leadership. Lilly’s 13 AI investments this year outpaced every other pharmaceutical company.

Lilly’s investment strategy reveals 3 key areas where the company sees AI’s greatest potential in pharmaceuticals: drug discovery (Insilico Medicine), medical devices (RetiSpec), and regulatory solutions (Yseop). Drug discovery represents the most significant focus, accounting for half of Lilly’s AI investments. Lilly’s impressive track record in this area includes 2 portfolio companies that successfully IPO’d last year — BioAge and Alto Neuroscience — suggesting strong prospects for current investments like Insilico Medicine, which boasts a 29% IPO probability score compared to the platform average of just 1%.

Since this year’s AI readiness rankings hinged largely on external investment and partnership activity, one might expect the list to correlate with market cap. While this is generally true, 2 companies stand out as high performers with AI readiness scores that significantly exceed what their market cap would suggest: Merck KGaA and Bayer. Ranking second and third, respectively, these companies demonstrate that strategic focus can be as important as financial resources.

Both companies achieved their high rankings through significant external engagement strategies. While matching competitors on internal AI initiatives, Merck KGaA recorded the second-highest number of AI investments (10), trailing only Lilly’s 13. Bayer secured the second-highest number of business relationships with 21 AI partnerships, just behind Roche’s 22.

Strategic partnership approaches can elevate AI readiness regardless of market cap, as these examples illustrate. Breakthrough innovations often emerge from partnerships and acquisitions rather than purely internal development, with over 70% of new molecular entity revenues since 2018 coming from externally sourced products, demonstrating the importance of external collaboration.

Oncology dominates pharma AI partnerships

Oncology has emerged as the clear focus for pharma AI partnerships, capturing 1 in 3 pharma business relationships among the 50 companies analyzed — far more than any other therapeutic area. This concentration stems from both market dynamics and cancer’s data complexity. Cancer rates continue rising worldwide while the field shifts toward precision oncology, creating opportunities for pharmaceutical companies to apply AI across multiple aspects of cancer care. Furthermore, cancer drug revenues have increased 70% over the past decade, creating substantial commercial opportunity for AI-enabled drug development.

The AI startups with the highest Mosaic scores that partner with big pharma in oncology each tackle completely different pieces of the cancer puzzle. These partnerships span the entire care continuum, from liquid biopsy screening (Caris Life Sciences) and antibody therapeutics (BigHat Biosciences) to patient monitoring (Huma) and diagnostic pathology (Aignostics).

While these companies all work in oncology, they demonstrate how AI addresses fundamentally different challenges across cancer care. Cancer’s data-rich environment and biological complexity make it a natural testing ground for AI innovation, suggesting that oncology will continue to drive the most cutting-edge applications in pharmaceutical AI.

RELATED RESEARCH FROM CB INSIGHTS

• The AI in drug R&D market map
• 3 shifts that will define the future of medtech
• Inside Novo Nordisk’s $33B manufacturing push to strengthen its obesity portfolio and build a biologics powerhouse
• Here’s how the 100 most promising AI startups in 2025 compare by the numbers
• The humanoid robots market map

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These significant cash infusions signal where investors are placing the biggest bets at a given time and which startups are being positioned to shape or disrupt markets.

To track trends in mega-rounds, our monthly Book of Scouting Reports offers an in-depth analysis of every private company that has raised a funding round of $100M or more. The scouting reports provide insight into each company’s funding history and latest round; headcount; opportunities & threats; commercial maturity; and business health.

Download the book to see all 46 scouting reports.

Key trends from June’s mega-rounds include:

• AI attracts the largest funding rounds, fueled by tech talent wars: Meta invested a massive $14.8B in Scale, whose CEO is also joining the tech giant. Thinking Machines Lab raised $2B in seed funding without a live product, with several former OpenAI executives having joined the company. These rounds show how quickly AI talent is moving around the industry — and the hefty price tags that this talent can command.
• Industrials command a third of mega-rounds in June, indicating a hardware renaissance: Industrial companies (including defense, aerospace, energy, and robotics) drove many of this month’s $100M+ deals, from Anduril‘s $2.5B round to Helsing‘s nearly $700M deal. While AI is central to many of the companies in this sector, almost all are developing physical hardware and infrastructure. 
• Quantum computing players get a boost from AI and defense applications: Two quantum computing companies raised mega-rounds in June ’25: Infleqtion, which develops quantum sensing for defense, and AI 100 winner Multiverse Computing, which provides quantum-enabled model compression to speed up AI processing. While not a substantial share of deals, these investments point to an increased demand for quantum capabilities across high-growth applications.
• Capital is going toward product and R&D: 37% of mega-round recipients are directing these funds toward product development and core technology advancement, including AI. For example, Observe intends to use the capital to expand its AI observability features, while Impulse Space is planning R&D for new vehicles for NASA and defense customers. 

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So far this year, 53 companies have reached billion-dollar valuations, putting 2025 on pace to exceed the 80 unicorns minted in all of 2024.

Artificial intelligence is the key driver behind this surge, with AI startups accounting for over half of all new unicorns in 2025 so far. These AI-native unicorns are also breaking the mold, reaching $1B+ valuations on faster timelines, hitting the milestone in 6 years versus the typical 7.

Here’s what today’s unicorn landscape signals about the future of tech:

• 1 in 5 new unicorns are AI agents, with AI taking over the unicorn landscape, representing 53% of all new billion-dollar companies in 2025 so far. Among the newest unicorns, 12 are building AI agents, including Hippocratic AI (healthcare), Cyberhaven (data security), and Parloa (customer support). 
• Newer unicorns generate 83% more revenue per employee than older ones, with $814K per employee on average, compared to the $446K average across all unicorns. This reflects automation-first approaches and leaner operations that avoid the operational bloat older unicorns accumulated during their growth phases. For example, among unicorns born in 2025, the company with the highest revenue per employee is soft drink company Olipop ($1.2M/employee), followed by AI sales agent unicorn Clay ($1M/employee).
• Consumer and fintech companies are most primed to exit, boasting the highest M&A probability scores among the top Mosaic-scoring companies. While payments company PPRO tops the list with a 53% probability of getting acquired in the next 2 years, consumer & retail companies dominate the middle tier with ID.me (41%), Cart.com (33%), and Vestiaire Collective (31%), suggesting acquirers see solutions like identity verification, e-commerce infrastructure, and marketplace platforms as prime M&A targets.

CBI customers: Dive into data on every unicorn

Market map of billion-dollar startups

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By combining AI with physical dexterity, humanoids can perform complex tasks once limited to people, without the expensive facility modifications that traditional automation requires.

While manufacturing and warehousing use cases lead in early adoption, humanoids are expanding into healthcare, retail, and hospitality sectors, signaling widespread potential in industries that need human-like movement and flexibility.

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Now, our Book of Scouting Reports offers in-depth analysis on every single one of the private companies featured in the market map.

Combining CB Insights’ proprietary data and AI, scouting reports provide insight into each company’s:

• Funding history
• Headcount
• Key takeaways (including opportunities and threats)
• Commercial Maturity score
• Mosaic score

Download the book to see all 49 scouting reports.

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Now, we’re examining the critical metrics behind these winners, revealing potential acquisition targets, partnership opportunities, and emerging competitors before they reshape the market.

Below, we analyzed the 100 winners to understand how the cohort stacks up, the markets we’re seeing emerge, top investors in AI, and more.

Learn more about the AI 100 here

Some highlights from our analysis: 

• AI infrastructure shows a maturity gap despite massive funding. Despite the already enormous amount of capital raised in this category, AI infrastructure still has overall low Commercial Maturity Scores and sees a lot of early-stage activity with a specific focus on efficiency. These AI 100 winners are betting on next-generation solutions like specialized AI chips, novel computing architectures with reduced energy consumption and optimized inference, and infrastructure designed for multimodal workloads that current systems can’t efficiently handle. 
• Autonomous vehicles are accelerating beyond the hype cycle. The auto & mobility market ranks third by Mosaic score, with companies gaining significant commercial traction following Waymo‘s recent success in scaling its robotaxi operations. This momentum validates years of R&D investment and suggests we’re entering a new phase of AV deployment. Read more in our recent autonomous vehicle analysis.
• Multimodal AI is driving the biggest breakthroughs. Voice AI platform Cartesia leads the largest year-over-year Mosaic score jump (+321), alongside other companies pushing beyond text-only models toward integrated voice, vision, and reasoning capabilities. This shift represents the next evolution of AI, especially for embodied AI systems like humanoids, moving from single-modality tools toward systems that can understand and generate across multiple forms of media simultaneously. 

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In response to these cost pressures, pharma companies are using AI to make R&D more efficient. These capabilities enable organizations to quickly identify and evaluate promising drug candidates, influencing the selection of therapeutic approaches that advance to development.

AI could potentially cut years off the discovery process and compress clinical trial times by up to 30%. This would accelerate the delivery of new treatments to patients, unlock novel treatment approaches, and enable more personalized medicine. Companies that effectively leverage these AI capabilities will gain crucial advantages in speed, precision, and breakthrough discoveries.

Our analysis maps 225 AI-driven drug R&D companies across 27 markets. Below the map, we break down several trends shaping the future of pharmaceutical innovation, as well as share the methodology we used to select and categorize companies.

Please click to enlarge.

Note: This market map is not intended to be exhaustive, and categories are not mutually exclusive. For more, see the detailed methodology at the bottom of this report.

Key takeaways

• • AI tools for clinical development are more commercially mature than the emerging field of preclinical applications. According to CB Insights’ Commercial Maturity scores, 37% of clinical development companies have reached the most mature commercial stages (4: Scaling or 5: Established) compared to just 7% of preclinical companies. Late-stage funding follows a similar pattern — 9% of clinical development funding since 2023 has gone to late-stage companies, compared to just 3% for preclinical tools.
  • AI funding in drug R&D rebounded in 2024, with discovery engines capturing the majority of investments amid consolidation in the clinical trial sector. In 2024, equity funding grew to $3.8B (up from $3B in 2023), with AI-derived biologics and small molecules attracting $1.1B and $1B, respectively. Early 2025 momentum suggests the sector is on track to match last year’s strong performance.
  • Patient recruitment platforms and clinical trial management systems demonstrate the strongest momentum. Examining market performance through average CB Insights Mosaic scores (a proprietary measure of private-company health and growth), EHR-based recruitment platforms lead (716 out of 1,000), while trial management systems show highest deal growth (+150% YoY). Look to these markets as high-growth areas to track within the AI drug R&D space.

Clinical development AI tools have achieved commercial maturity, while preclinical applications offer emerging investor opportunities

The adoption of AI in drug R&D is still emerging, and its pace varies across different sectors.

While early-stage funding dominates all sectors, preclinical development remains the most nascent, with 81% of funding since 2023 directed to early-stage deals and only 3% to late-stage deals. 

Clinical development shows greater maturity — still led by early-stage deals, but with a more established cohort of companies in later stages (70% early-stage, 9% late-stage funding).

CB Insights’ Commercial Maturity metrics further highlight this disparity. 

In preclinical development, 45% of companies are in the earliest commercial stages (1: Emerging and 2: Validating) compared to 32% in discovery and just 15% in clinical development. 

Conversely, only 7% of preclinical companies have reached the most mature stages (4: Scaling or 5: Established) vs. 11% in discovery and a substantial 37% in clinical development.

The disparities in maturity stem from each sector’s unique characteristics:

• Clinical development AI solutions often build upon existing healthcare technology infrastructure, facilitating faster adoption. 
• The use of AI in discovery carries higher investment risks as companies develop unproven molecules from scratch. 
• Preclinical development, positioned mid-pipeline, offers more specialized solutions and faces stricter regulatory scrutiny, explaining its slower advancement despite growing momentum.

For investors, this creates a clear distinction: Clinical development companies provide stronger near-term return potential, while the emerging preclinical space offers better opportunities to establish early market advantages.

Explore all 700+ AI in drug R&D companies

Drug R&D AI funding recovers as discovery engines lead investments amid clinical trial sector consolidation

After declining YoY between 2021 and 2023, equity funding across AI in drug R&D rebounded in 2024, growing from $3B to $3.8B and significantly surpassing pre-pandemic levels ($2.7B in 2019). The momentum continues in 2025, which, after Q1, is on pace to match 2024’s performance, bolstered by Isomorphic Labs‘ $600M Series A round in March 2025.

Among markets, discovery engines led funding in 2024, with AI-derived biologics securing $1.6B in equity funding and AI-derived small molecules attracting $1B. This aligns with these companies’ higher funding requirements for developing therapeutics and conducting clinical trials. It also demonstrates investors’ strategic bets on AI’s potential to slash drug discovery timelines — with discovery engines serving as the primary vehicles to prove this capability.

Enveda stands out here, having raised a $130M Series C in November 2024, followed by an additional $20M investment from Sanofi in February 2025 — a strong endorsement of its platform, which combines machine learning, metabolomics, and robotics to identify novel compounds from medicinal plants. The company’s recent collaboration with Microsoft Azure (May 2024) further positions it to scale its generative AI capabilities.

Beyond discovery engines, quantum computing platforms had an exceptional 2024, raising $376M, while decentralized clinical trial platforms followed, securing $129M. Huma led the latter group with an $80M Series D round in July 2024, while the market simultaneously underwent a wave of consolidation, with 5 acquisitions in 2024 alone, doubling all exits since 2020. 

However, among these acquisitions, only Aparito (purchased by Eli Lilly in July 2024) leverages AI in its offerings through its Atom5 platform, which enables comprehensive remote data collection and AI-powered data analysis.

Analyze AI in drug R&D deals

Patient recruitment and quantum computing lead commercial momentum in AI-driven R&D

According to CB Insights’ Mosaic scores, the highest-momentum AI markets across phases of drug R&D are: 

• Discovery: Quantum computing
• Preclinical development: Drug development strategy & compliance platforms
• Clinical development: EHR-based patient recruitment platforms

Among these high-potential sectors, several companies are making significant advances. 

SandboxAQ (Mosaic score: 843) leads in the quantum computing space; its 2023 release of the AQBioSim technology stack combines AI and quantum algorithms to predict molecular behavior and accelerate drug discovery. This expansion into biotech applications attracted Sanofi, resulting in a partnership in October 2024. 

In the regulatory domain, Weave (Mosaic score: 575) has positioned itself as an early mover in AI-driven regulatory automation for life sciences. Its AutoIND platform, launched in 2024, claims to reduce IND application timelines by up to 70%. 

Among these top 10 markets, trial recruitment optimization tools and clinical trial management systems showed the most growth in deals from 2023 to 2024. This illustrates increasing investor confidence in technologies that address critical bottlenecks in clinical trial efficiency and challenges related to patient enrollment.

In these markets, the companies with the highest Mosaic scores demonstrate rapid advancement and growing investment appeal:

• In the clinical trial management space, Lindus Health (Mosaic score: 874) secured a $55M Series B round in January 2025 and established a partnership with the Clinical Data Interchange Standards Consortium (CDISC) in February 2025. This collaboration with CDISC — a nonprofit that sets standards mandatory for FDA submissions — focuses on automating data standardization using Lindus Health’s AI platform for trial protocol generation and analysis.
• Paradigm Health (Mosaic score: 822) leads in trial recruitment optimization with its AI-driven platform for patient recruitment and trial management. Its deployment across 400 research sites and 1,000 healthcare provider locations in 3 countries helped it secure a $203M Series A in January 2023. In November 2024, Japan’s National Cancer Center selected Paradigm for its nationwide clinical trial network to advance precision medicine initiatives, expanding the company’s footprint in the Asian oncology research market.

These market signals suggest AI’s most immediate and transformative impact on drug development will come not from scientific breakthroughs alone, but from technologies that systematically eliminate the operational inefficiencies that have historically extended development timelines and inflated costs.

Dive into all drug R&D tech markets

Methodology

To identify players for this market map, we reviewed AI companies in drug R&D markets and included startups with a Mosaic score of 400+ that have raised funds within the last 5 years. For markets where these criteria identified more than 20 companies (AI-derived small molecule drugs, AI-derived biological drugs, and molecular design platforms), we selected those that had raised at least $20M in funding. If further reduction was needed, only companies in the top 20 Mosaic scores are shown. 

Categories on the market map align with our recent 3-part series on AI in drug R&D:

• Discovery encompasses workflows from project inception through lead selection, where discovery platforms are companies whose products are AI software systems, while discovery engines are companies whose products are therapeutics discovered using proprietary AI systems. 
• Pre-clinical development covers lead development to the first regulatory filing (an Investigational New Drug (IND) application in the United States)
• Clinical development spans from the start of clinical trials through commercialization. 

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Now, our Book of Scouting Reports offers in-depth analysis on every single one of the AI 100 winners, from infrastructure to horizontal to vertical applications.

Combining CB Insights’ proprietary data and AI, scouting reports provide insight into each company’s:

• Funding history
• Headcount
• Key takeaways (including opportunities and threats)
• Commercial Maturity score
• Mosaic score

Plus, the analysts behind this year’s AI 100 provide their perspective on every one of the winners.

Download the book to see all 100 scouting reports.

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After generative AI transformed content creation with large language models and AI agents enabled autonomous decision-making with predictive systems across enterprises and industrial applications, humanoid robots represent the next frontier as the embodiment of physical AI.

The humanoid market secured a record $1.2B in funding in 2024 and is projected to reach $2.3B in 2025, according to CB Insights data.

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We highlight three pivotal trends from the event — backed by examples and CB Insights data — that capture the sector’s shifting dynamics in 2025.

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