CB Insights

Mega deals require mega funds. As the price of top AI deals skyrockets, is AI investing turning into a "rich get richer" game? Andreessen Horowitz is the current King of the Hill – with the most AI investments out of any investor and early investments into OpenAI, Databricks, xAI, Anduril, Safe Superintelligence, Shield AI, and Mistral AI. The firm's rumored fresh $20B fund positions the firm to continue to dominate the space. AI companies are attracting unprecedented investment levels, with deal sizes that dwarf those in other sectors. Q1'25 saw global venture funding rise to $121B, with AI mega-rounds ($100M+) accounting for 70% of all funding. Why? 1) High Costs Building cutting-edge AI requires enormous capital investment across infrastructure, talent, and energy costs. 2) High Multiples AI companies command significantly higher valuation multiples than other sectors: median revenue multiple for AI companies is approximately 29.7x with LLM vendors specifically commanding even higher multiples at 54.8x revenue. The AI race has created intense competition among investors – all seeking to establish strategic positions in the evolving AI ecosystem. Already, a16z has invested multiple rounds into 11 AI companies that have each raised over $1B+ in total funding. Which growth-stage companies are the next mega deal targets?

Where will value accrue in AI? Q1’25 funding data gave us the first real look at the split market for value creation in AI. Two truths that are becoming evident: 1. Big Tech will get bigger Mega deals for foundational models and AI infra companies made up 6 of the 7 $1B+ equity rounds in Q1’25. The foundational layers of AI are massively capital intensive. The established companies with the most data, compute, and distribution are best positioned to leverage AI to strengthen their positions – outspending on both OpEx and CapEx. Innovators like DeepSeek are challenging the resource equation, but as of now there is still a model edge to be gained with compute. Big Tech's built-in consumer (and business) data and distribution may also prove to be their most durable advantage. 2. The long tail of specialized AI applications will multiply big time AI accounted for 20% of all deals in Q1’25. High-impact, smaller companies are solving important niche problems across every sector. As foundational AI-capabilities become commoditized, we will see a continued explosion of companies across the application and agentic layers. CB Insights data shows the AI market isn't winner-take-all. Instead, it's bifurcating between a few massive horizontal players and thousands of vertical specialists.

How much can an administration change impact startup markets? Fueled by administrative changes, two markets took off in Q1'25 — and, perhaps unsurprisingly, they're both related to two things Americans *stereotypically* love: guns and money. 🚀 Defense Tech as a National Interest Funding to AI defense tech startups has already reached $1.5B this year — leading to a projected $6B by year-end, nearly double the annual average during the previous administration. As geopolitical tensions persist, defense tech investment will continue to grow, with particular focus on autonomous systems, AI-enhanced battlefield analytics, and advanced cybersecurity solutions for critical infrastructure. The new administration has accelerated defense tech innovation through streamlined procurement processes and the expansion of the Defense Innovation Unit (DIU). Policy changes have shortened contracting timelines for AI startups from 18+ months to under 6 months in some cases. The newly established "National Security Technology Accelerator" provides regulatory sandboxes for testing dual-use technologies. 💰 Crypto's Return After weathering a prolonged crypto winter, crypto and blockchain are back in focus. Funding reached $6.6B in Q1'25, on track to rival the record annual funding from 2021 and 2022. The administration's pro-crypto stance has dramatically shifted the regulatory landscape, creating clear jurisdictional boundaries between the SEC and CFTC, ending years of regulatory uncertainty. Meanwhile, "Safe Harbor" provisions for compliant stablecoin issuers have legitimized the sector for institutional adoption. Interest in "guns and money" isn't limited to startup markets — earnings call mentions and public company and government partnerships have climbed accordingly. Public interest in the space will only drive more activity in startup markets. Which other markets are likely to see increased under a new administration? P.S. Full CB Insights data on what happened in venture in Q1'25 in the comments 👇

A $40B round. Declining deal volume. Record $B+ acquisitions. Crypto's comeback. AI everything. And, so much more... What the hell happened in Venture in Q1'25? 📈 Mega-rounds drive funding and deal sizes up Led by OpenAI's $40B round, mega-rounds accounted for 70% of all funding, up from 60% in Q4'24. 145 mega-rounds closed – the highest quarterly total since Q3'22. More mega-rounds drove median deal size to a record $3.5M. 📉 Deal volume continues to slide Overall deal activity has plunged to its lowest level since 2016. Global deal count slid for a fourth straight quarter in Q1'25, to 5,846 deals, down 7% quarter-over-quarter and 28% year-over-year. 📈 AI now captures record share of deals The influence of AI on venture capital continues to grow, with AI companies now capturing 20% of all venture deals globally — up 2x since the launch of ChatGPT in 2022. 📉 Early-stage deals decline Q1'25 early-stage deal share fell to 63% from 71% in 2024. 📈 Early-stage deal size sets records While there were fewer early-stage deals, those that did happen attracted a premium. Median early-stage deal size is up 37% versus the previous record from last year. Want more insights on the sectors, markets, geos, investor categories you care about most? You know where to look 👇

Deals for real estate tech companies are climbing more than my rent. Real estate tech deals are on pace for a record high for a second year in a row. It's not just funding picking up, big exits are up too. Already in 2025 we've seen four $1B+ acquisitions of real estate tech companies across Rocket Companies' acquisitions of Mr. Cooper and Redfin, CoStar Group's acquisition of Matterport, and Maymont Homes's acquisition of Divvy Homes. Based on the data, five big trends emerge across the hotter market for investment, acquisitions, and partnerships in real estate tech: 1) Increased integration of AI across the real estate value chain 2) Growth in smart building technologies driven by sustainability concerns and operational efficiency 3) Real estate is getting more data-driven with platforms providing better access to market trends, property values, and investment insights 4) Focused development of immersive technologies for property marketing and visualization 5) Tech-enabled brokerages are revolutionizing traditional real estate transactions Now... which of these companies is working on turning Millennial avocado toast habits into home ownership?

Fidelity isn't the only company talking about stablecoins. Mentions of stablecoins and digital assets in earnings calls are almost back to peak levels from 2021-2022. As the government warms to crypto, companies are increasingly embracing digital assets, with several key trends emerging in 2025. CB Insights' Business Graph data shows that several major asset managers are embracing strategic expansion into digital assets, including: Fidelity Investments - Stablecoin pilot in advanced testing stages and plans for a tokenized money market fund on Ethereum (the Fidelity Treasury Digital Fund) - Fidelity's BUIDL product is on track to surpass $2 billion in assets by early April 2025 BlackRock - Launched its Institutional Digital Liquidity Fund (BUIDL) on Ethereum, which currently manages over $530 million primarily in short-term U.S. Treasury bills - BlackRock has formed strategic partnerships with crypto firms including Frax Finance to support its frxUSD stablecoin and Ethena Labs to launch the UStb stablecoin State Street Global Advisors - Partnered with Galaxy to introduce next-generation digital asset ETFs, expanding beyond cryptocurrency to companies in the broader digital asset space Fidelity's latest digital asset push continues their aggressive expansion into digital assets – putting Fidelity at the forefront of traditional finance's entry into crypto, potentially capturing significant market share in the growing tokenized asset space. With regulations set to become increasingly favorable to crypto, asset managers will follow Fidelity's strategy. As asset managers enter the space, value will accrue to blockchain platforms, specialized tokenization providers, and fintech companies and we are likely to see a wave of new companies and funding to build scalable digital asset technological infrastructure.

AI = Amazon Interests? Amazon has mentioned 'AI shopping' in 4 of its last 5 earnings calls. Today, they announced Interests AI, an AI shopping agent that will proactively help consumers find what they are looking for. Last month, we made three predictions (based on data from the CB Insights’ Business Graph) about the key shifts in how AI agents are transforming the customer journey. Today, Amazon's launch of Interests AI is the start of these predictions becoming a reality, sooner rather than later. 1. First-party transaction data will shape the future of AI-driven personalization. As personalization becomes more sophisticated at the awareness and consideration stages, companies with direct access to first-party data will have an edge. 2. Direct-to-agent (D2A) commerce will kill traditional loyalty. AI agents will upend loyalty programs as agents optimize shopping across groups of merchants and types of consumer needs. 3. A few AI agents will own the customer relationship. Companies like Amazon, Google, Microsoft, and Apple — with critical consumer distribution and financial services infrastructure — are well-positioned in AI-enhanced commerce. For more on how AI will impact the customer journey and data on the startups, public companies, and industry partnerships driving the future of agentic shopping, read our full report (linked in comments).

Deal-making is so back! With 6 days still left in the quarter (and a few rumored deals), Q1 2025 has already set new records for billion-dollar startup acquisitions. While Q1 2025 is currently tied with Q1 2000 (dot com) and Q4 2020 (ZIRP) for deal count, each with 11 startup acquisitions valued at over $1B, the current quarter blows the previous valuation records out of the water. Driven by Wiz's record-breaking in its own right $33B acquisition by Google, billion-dollar startup acquisitions have netted $54.5B in Q1 2025 – up a mind-boggling 44% versus the previous $37.7B record from Q1 2022. With big money M&A hotter than ever and long-awaited IPOs imminent, 2025 is on track to be the exit market we've all been waiting for. Will the momentum keep building? P.S. For more context and CB Insights data, read Katie Roof's piece for Bloomberg and Samantha Subin's piece for CNBC.

CoreWeave's IPO is already oversubscribed. Here's what you need to know 👇 I asked ChatCBI to provide context and an outlook on the IPO. Based on its analysis of the latest CB Insights data, CoreWeave's success post-IPO will likely depend on its ability to: 1. Diversify its client base 2. Maintain its technological edge in the competitive AI infrastructure market 3. Successfully integrate the acquisition of Weights & Biases 4. Navigate potential market corrections in the AI sector Link in comments for access to ChatCBI to ask your own follow up questions.