Global venture funding has rebounded significantly in 2025, reaching a total of $97 billion in the third quarter, according to Crunchbase data. This marks only the fourth quarter since Q3 2022 to surpass the $90 billion threshold. However, a pronounced divide has emerged in the startup funding landscape, with notable disparities in which sectors and stages are receiving financial backing.
The recent surge in funding is characterized by an overwhelming concentration in the artificial intelligence (AI) sector. In Q3 2025, AI companies received 46% of all global startup funding, with a significant portion directed to a single firm, Anthropic, which raised an astonishing $13 billion during this period. Despite this surge, it is worth noting that Q3 2025 recorded only the third-highest quarter for AI funding, trailing behind Q4 2024 and Q1 2025, both of which saw even larger inflows.
Shift Towards Megarounds
The trend towards large funding rounds, defined as megarounds of $100 million or more, has intensified. This year, 60% of global funding and 70% of U.S. venture capital have been allocated to these substantial deals, setting a new record. If the current pace continues, the total dollars invested in megarounds may match or exceed the peak levels seen in 2021, a year noted for its broad distribution of funds across various sectors, including food tech, health tech, and robotics.
In contrast, the current scenario features a more pronounced focus on established AI companies, which dominate the allocation of venture capital. This concentration has contributed to a decline in seed funding, which has seen a steady decrease in the number of deals, despite the total amount invested remaining relatively stable. This suggests that while the size of seed deals is increasing, opportunities for early-stage funding are becoming scarcer.
Investment Trends and Sector Disparities
Investor enthusiasm for AI has overshadowed traditional sectors such as cybersecurity and biotechnology, which are witnessing reduced funding. Biotech’s share of overall funding recently fell to a 20-year low, while cybersecurity investment, although still steady, also saw a decline in Q3 2025. Notably, many cybersecurity firms are integrating AI into their services, indicating a shift in investor priorities.
Conversely, sectors benefiting from AI-driven automation, such as legal tech, have experienced a surge in investment. Legal tech reached an all-time high last month, propelled by significant funding rounds aimed at automating various aspects of legal work. Other sectors, including human resources software, are also witnessing increased interest from investors looking to leverage AI capabilities.
Additional insights from the Q3 reports reveal a vibrant unicorn creation scene, as 26 new billion-dollar startups joined the Unicorn Board in September alone. Prominent investors in the AI megarounds included Insight Partners, General Catalyst, Accel, Andreessen Horowitz, and Iconiq Capital.
Asia-based startups experienced a sequential rise in funding during the third quarter, buoyed by several hardtech-focused megarounds. Meanwhile, European startups raised $13.1 billion across more than 1,000 deals, maintaining a steady trajectory compared to the previous quarter, and up 22% year-over-year. This growth was particularly highlighted by the excitement surrounding Klarna’s long-awaited IPO. In Latin America, Brazil reclaimed its position as the region’s largest funding recipient, surpassing Mexico.
As we look ahead, the increasing concentration of capital among a select group of large AI companies raises critical questions about the sustainability of this trend. With nearly half of recent venture capital investments tied to AI, the potential implications for the broader startup ecosystem remain to be seen. Investors and entrepreneurs alike are left to ponder whether this current influx of funding signals a bubble and what the future may hold should the sector experience a downturn.