Why benchmarking matters: As more investors move into private markets, understanding the ins and outs of proper benchmarking has never been more critical. Learn more about the factors you need to know. Read our research.
Where top VCs invest: Our Emerging Tech Indicator tracks early-stage trends of the world's best-performing VCs. No surprise which sector dominates. See the data.
Emerging tech: We've just published the last of our 2024 tech reports. Find out where deals are happening and innovation is sprouting in these verticals: Digital Health, Pharmatech, Supply Chain Tech, E-Commerce. |
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Why 2025 is shaping to be a better year for VC
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2024 gave us pockets of venture highlights.
Databricks raised a $10 billion round, and there were several other multibillion-dollar deals, all providing a window into the capital available for high-growth, well-known companies, particularly in AI.
Andreessen Horowitz raised more than $7 billion across several funds, a showcase of the leverage that certain firms have with LPs.
But overall, the market continued to slog through the mess. For companies outside of AI, capital continued to be a challenge to raise. Emerging managers had an incredibly troublesome time raising capital, and large exits remained few and far between.
The feeling around the market, though, is that the fog may begin to lift.
Rate cuts have started, changes at the FTC could bolster M&A activity, and there is a brighter sense that, should current trends continue, the IPO market will start to come back. Though it's a low bar to overcome.
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| We expect a rebound in relative velocity of value creation. |
Our outlook for venture in 2025 is positive, albeit tempered. Capital availability will likely remain lower for the later stages, a mechanic of the overinvestment a few years ago, and valuation growth should start to increase mildly.
The need for liquidity should finally push some companies to the table for acquisitions, and we can't forget there are 750 unicorns, not all of which will be able to raise more capital to provide liquidity for early investors and employees the way that Databricks and SpaceX could.
Distributions should also start to come back with the larger exits occurring, and that should also enhance the fundraising market, marginally.
The optimism inherent to venture allows for optimistic views no matter the true state of the market. However, it's inarguable that VC has gone through a dramatic change in the past three years, from anomalous years of highs to a swift contraction and now a relative normalization.
2025 will be a pivotal year, and there will likely be more shakeout in the market, but the sun seems to be rising.
To read our 7 predictions for next year, download our free 2025 US Venture Capital Outlook.
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The future ahead for enterprise technology
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Tech catalysts are assembling like Marvel's Avengers heading into the new year.
In fintech, corporate M&A and buyouts showed early signs of revival in the second half of the year.
In crypto, token prices are up, which historically correlates with VC funding.
In enterprise software, vendors have weathered slowing growth, looking forward to reaccelerating customer spending in 2025 and the maturation of the AI theme.
Our Emerging Tech Research team's outlooks for 2025 connect these themes to their impacts on private markets and startups we expect to thrive.
We also review our 2024 predictions to calibrate our crystal balls.
The note is available to read here: 2025 Enterprise Technology Outlook
We wish you a flourishing holiday season and happy new year.
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2025 US Private Equity Outlook
4 predictions from our US PE analysts cover these topics and more:
• The share of cumulative capital raised for private debt funds will hit a decade high for the top 10 managers.
• The maturity wall facing PE funds will grow as GPs struggle to wind down older vintages.
• Why PE will see a decline in annual fundraising following multiple years of robust activity.
Download the free outlook
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2025 EMEA Private Capital Outlook
6 predictions from our Europe-based analysts cover these topics and more:
• GP-led secondaries, venture debt, and AI investment will remain important themes.
• Why VC-backed IPOs will have a concentrated recovery.
• MENA private market fundraising will develop as capital flows into the region remain strong.
Download the free outlook
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2025 Healthcare & Life Sciences Outlook
6 predictions from our industry and tech analysts cover these topics and more:
• Healthcare & life sciences private dealmaking and fundraising trends.
• Why the number of healthtech unicorns will decline.
• Expecting at least two brain-computer interface startups to raise $100 million-plus VC rounds.
Download the free outlook
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