According to the latest report from the Data Provider Pitchbook, Startups has won $91.5 billion in venture capital funding. This figure not only represents the second highest quarter investment in the last decade, but also represents the second-highest quarterly investment in the last decade.
Despite this seemingly positive news, Pitchbook's lead US venture capital analyst Kyle Stanford appears to be the most bearish about VC trading since he began covering the market 11 years ago.
Stanford's source of negativity? The shattering of 2025 as a key exit will create a cycle in which IPOs and massive acquisitions generate large amounts of cash for investors and founders, then leading a lot of cash to startup funding. So, after all, it's Silicon Valley Way.
But fear of the recession caused by stock market volatility and President Trump's tariff policies has derailed these hopes. Startups don't want to debut in the open market while stock prices are falling due to global economic issues.
“The liquidity that everyone wanted doesn't seem to happen with everything they've done over the past two weeks,” Stanford told TechCrunch.
Several companies, including Fintech Klarna and physical therapy company Hinge, are reportedly considering delaying IPO delays amid the turbulence of the market.
Regarding the total of strong first quarter trading, Stanford said the metric doesn't paint a full picture of the excitement of start-up investors.
Of the $91.5 billion raised by US startups in the last quarter, an astounding 44% were invested in one company. It's Openai's $40 billion round. Pitchbook also found nine other companies raising more than $500 million, including the $3.5 billion for humanity and the $600 million round of Isomorphic Labs, accounting for an additional 27% of the total transaction value.
“These transactions really hide the challenges that many founders are experiencing,” Stanford said. “I think there are a lot of companies that need to be acquired for downrounds and for a massive discount.”
Investors and analysts have predicted a widespread startup collapse since the ZIRP era ended in 2022. Many failed, but other startups were able to cut costs and continue to grow even when growth rates fell below investors' expectations. But as we reported earlier, they are hanging in threads and 2025 is projected to be another difficult year for startup shutdowns.
“If there's a recession, they'll lose a lot of their income and growth, which could force them to sell for cents in dollars or go out of business,” Stanford said.
Startups and investors have been looking for 2025 for market turnarounds, but instead, potentially rough economies could speed up the end with many startups.