Week of May 19th, 2025

Welcome to 8alpha.ai’s weekly newsletter, your ultimate source for curated insights and updates from the dynamic world of venture capital!

We’ve scoured the vast landscape of the web to bring you a comprehensive roundup of the industry’s top news articles, all in one convenient place. We keep you ahead of the game and in the know about all things related to the vibrant world of investments

STARTUPS

ROUNDS AND UNICORNS

The Week’s Biggest Funding Rounds: Pathos, Addepar Top Busy Week For Health And Fintech (Crunchbase, 5 minute read)

1. Pathos (AI Drug Discovery): Raised $365M in Series D at a $1.6B valuation, led by undisclosed investors. Specializes in AI-driven precision medicines, with a focus on oncology

2. Addepar (Financial Services): Raised $230M in Series G, led by Vitruvian Partners and WestCap. Offers an investment platform used to manage over $7T in assets, up from $5T the previous year

3. Stord (E-commerce Logistics): Raised $200M in Series E and debt financing, with equity led by Strike Capital and debt provided by Silicon Valley Bank and Orix USA. Provides software, warehousing, and transportation services for e-commerce fulfillment

4. Stash (Personal Finance): Raised $146M in Series H, led by Goodwater Capital. Offers an automated investment platform and is developing “Money Coach AI” for real-time, personalized financial guidance

5. Bestow (Life Insurance Tech): Raised $120M through $70M in Series D equity and $50M in debt, led by Goldman Sachs Alternatives and Smith Point Capital. Provides life insurance software solutions for insurance carriers

State of Private Markets: Q1 2025 (Carta, 3 minute read)

As the second half of the 2020s begins, VC investors are more selective than ever, backing fewer startups but at higher valuations. In Q1 2025, the median pre-money valuation for seed rounds rose to $16M —up 18% year-over-year—despite a 28% drop in deal volume. At Series A, valuations climbed to $48M, while deal activity fell by 10%. Across all stages (seed to Series C), valuations increased, but deal counts declined

• Meanwhile, median dilution is falling—Series A rounds diluted 17.9% on average, down from 20.9% a year ago—indicating founders are keeping more equity amid stronger demand from investors

• Only 401 seed rounds were closed in Q1, raising $1.2B, a 37% decline in dollars raised compared to Q1 2024

• Although $21B was raised in Q1, matching last year, the 1,122 rounds closed mark the lowest Q1 deal count since 2018, and a 33% drop from Q4 2024

ECONOMIC SNAPSHOT

US inflation falls to 2.3% in April (Financial Times, 3 minute read)

U.S. inflation eased to 2.3% in April — down from 2.4% in March — surprising analysts and coinciding with the rollout of President Donald Trump's global tariffs. While some tariffs have since been rolled back, economists warn the full inflationary impact has yet to hit. The Yale Budget Lab estimates tariffs will cost the average American consumer $2,800 more this year

• Despite inflation cooling, the Federal Reserve is maintaining interest rates at 4.25%–4.5% and is under pressure from Trump to cut rates

• The Fed’s preferred measure, the Personal Consumption Expenditures index, also fell to 2.3% in March but remains above its 2% target

Treasury yields move higher as investors weigh inflation and await news on spending (CNBC, 3 minute read)

U.S. Treasury yields ticked slightly higher on Wednesday as investors awaited new economic data on retail sales, inflation, and jobless claims. The 10-year yield rose 3.7 basis points to 4.536%, and the 2-year yield increased 4.2 basis points to 4.059%. Markets were calmed by April’s consumer price index (CPI), which showed a 2.3% annual rise—below the expected 2.4%—and matched core inflation at 2.8%

• Investor concerns over inflation and tariffs eased after the U.S. paused most reciprocal tariffs for 90 days

• Although the Fed warned of stagflation in May, analysts at Deutsche Bank noted that the impact of Trump’s “Liberation Day” tariffs had not yet appeared in the data and likely won’t be visible until June

Markets Rattled on Concerns About U.S. Debt (The New York Times, 5 minute read)

Financial markets were rattled Monday as investors pulled out of U.S. stocks, bonds, and the dollar, reflecting growing concerns over the American economy. The S&P 500 dipped 0.2%, 10-year Treasury yields surged to 4.5%, and the dollar fell 0.7% against major currencies. The turbulence was driven by a bill to make Trump’s 2017 tax cuts permanent—potentially adding trillions to the deficit—and the U.S. losing its last AAA credit rating after Moody’s downgrade on Friday

• The downgrade, paired with fears over long-term fiscal health, pushed the 30-year Treasury yield briefly above 5%, its highest in 18 months

• Analysts at Goldman Sachs and JPMorgan expect yields to rise further due to postponed tariff hikes

• Gold rose 1.5% as a safe haven, while Walmart’s stock dipped after saying it would raise prices to cover tariffs. Trump responded by urging the retailer to “EAT THE TARIFFS”

IPO & EXITS

Venture Capital’s Second(ary) Chance (Crunchbase, 4 minute read)

Venture capital’s long-held belief that illiquidity is a feature — with returns heavily reliant on IPOs or acquisitions — is being challenged by a prolonged lack of exits and swelling private capital. With over $200 billion deployed globally into startups annually, the sheer volume has stretched liquidity timelines and diluted returns, particularly as growth rounds pile on preference stacks that guarantee later investors their money back firs

• Data shows that 15%–25% of venture funds' paper value comes from companies that are unlikely to exit soon, making secondaries a practical way to lock in real returns

• With secondary deal volume now exceeding $100 billion globally across private equity and venture, the market is becoming more liquid and strategic

Tech IPO market is finally showing signs of life (CNBC, 3 minute read)

After a prolonged drought since early 2022, the IPO market is showing signs of revival. However, investor optimism was previously shaken in April after Trump’s sweeping tariff policy rollout and subsequent pause led major companies like Klarna and StubHub to delay their IPOs. The first quarter of 2025 saw the highest venture exit value since 2021, but nearly 40% of that came from CoreWeave alone

• Now, with Trump’s 90-day tariff pause easing market tensions, some companies are returning to IPO plans: Chime and Omada Health have recently filed to go public

• Despite renewed activity, experts say uncertainty remains high, advising companies to be IPO-ready but cautious

• Growth sectors like AI remain strong while digital health lags post-Covid boom

Databricks Is On An M&A Roll With $1B Neon Acquisition (Crunchbase, 5 minute read)

Databricks announced plans to acquire Neon, a database management platform, in a deal valued at approximately $1 billion. This marks one of the largest acquisitions in Databricks' history, second only to its $1.3 billion purchase of MosaicML. The San Francisco-based AI data giant, is currently valued at $62 billion after raising $10 billion in equity and $5.3 billion in

• Neon’s appeal lies in its automation: 80% of databases on its platform are created by AI agents rather than humans

• Founded in 2021, Neon has raised around $130 million from investors including Microsoft’s M12 and Menlo Ventures

Chime rings the IPO bell (Fortune, 6 minute read)

Fintechs are breathing new life into the IPO market. eToro began trading on Nasdaq at a $4.2B valuation after pricing above expectations, while Chime filed its S-1, reporting $1.67B in 2024 revenue and a sharply reduced net loss of $25M. Chime emphasized it’s a tech company, not a bank, aiming to align with the broader tech narrative. Though challenges remain—like Klarna delaying its IPO—these resilient, post-ZIRP fintechs may finally be seizing their moment

• Venture capital activity is also strong, with major raises from Bestow ($120M), Wonderskin ($50M), and Optimal Dynamics ($40M), among others

• In private equity, deals include acquisitions of Trimlight, VIVE, and Landsea Homes

WHAT A TIME TO BE ALIVE

The Immigrant Edge: How Foreign-Born Entrepreneurs Drive America’s Unicorn Boom (Crunchbase, 5 minute read)

Nearly half of America’s billion-dollar startups — or “unicorns” — were founded by immigrants, highlighting the critical role of global talent in U.S. innovation. A Stanford VC Initiative study found that 44% of U.S. unicorn founders were born outside the country, with India leading the way with 90 founders, followed by Israel (52), Canada (42), and others from 65 countries across all continents

• Not only do many unicorns have foreign-born founders, but 8% were initially launched abroad before relocating to the U.S. Popular landing spots include California, New York, Massachusetts, and Texas

• The impact of international founders goes beyond headquarters: only 38% of employees at California-based unicorns work in-state — the rest are spread across the U.S. and globally

• Israel ranks highest in unicorn founder productivity per capita, with 43.4 founders per 100,000 first-generation immigrants in the U.S., compared to India’s 2.5

AI8 VENTURES HIGHLIGHT

The Illusion of Recovery - Venture Capital 2025

We are living in a world defined by rapid and accelerating change, political, economic, social, and technological. This is not a typical business cycle. We are in an era shaped by powerful megatrends, with AI transforming industries, geopolitical shifts reshaping markets, and macroeconomic forces creating new uncertainties.

Just weeks before the 2024 election, The Economist described the U.S. economy as the “envy of the world.” After Donald Trump’s victory in November, markets initially anticipated controlled inflation, deregulation, and a less restrictive monetary policy. Fast-forward a few months to April 2025, and the optimism has faded. With capital markets reacting negatively to renewed trade war fears, over $5 trillion in market value were erased in a couple of days.

2025 opened with headlines proclaiming a venture capital comeback.

On paper, VC funding rebounded, driven by an unprecedented surge in AI investment. But beneath the surface, it’s a tale of two markets: one propelled by billion-dollar mega-deals in Artificial Intelligence, and another still struggling to regain traction amid macroeconomic uncertainty, investor hesitation, and a lingering liquidity crunch.

With Trump reigniting trade wars, tariffs reshaping global supply chains, and AI advancing at breakneck speed, it’s becoming harder than ever to place clear bets.

The real question is: what are you going to bet on?

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Happy reading,

8alpha.ai’s Research & Investment Team