Venture funding has rebounded since the 2022 correction, but there’s a clear divide between sectors receiving investment and those not. In the third quarter of 2025, global startup funding reached $97 billion, marking one of the few quarters to surpass $90 billion since late 2022. However, the funding landscape has shifted significantly compared to the market peak of 2021. Now, investments are heavily concentrated in large rounds for AI companies, driven by investor fear of missing out. Nearly half of global startup funding in Q3 was directed towards AI, with a single company, Anthropic, receiving $13 billion.
AI’s influence is evident in the prevalence of megarounds — funding deals of $100 million or more — which now account for 60% of global and 70% of U.S. venture capital. This trend contrasts with 2021, when funding was more evenly distributed across various sectors and stages.
As megarounds rise, seed deals have decreased in number, though their total investment value remains steady, indicating larger but fewer seed rounds. Early-stage funding has plateaued, despite notable rounds in robotics, biotech, and AI.
While AI captivates investors, traditional sectors like cybersecurity and biotech see diminished interest, with biotech investment hitting a 20-year low. Nonetheless, sectors benefiting from AI, such as legal tech and HR software, are experiencing growth.
The concentration of capital in AI raises questions about a potential bubble and the implications for the startup ecosystem if it bursts.
