Week of April 28th, 2025

Welcome to AI8’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: Chainguard And Supabase Top Big Week (Crunchbase, 5 minute read)

1. Chainguard (Cybersecurity): Raised $356M at a $3.5B valuation, co-led by Kleiner Perkins and IVP. Founded in 2021, the company focuses on securing software development and eliminating supply chain threats

2. Supabase (Database): Raised $200M in Series D at a $2B valuation, led by Accel. The open-source relational database competes with Google Firebase for AI app development

3. Electra (Industrial): Secured $186M in Series B led by Capricorn Investment Group and Temasek Holdings. The company focuses on producing pure iron using renewable energy

4. Altruist (Fintech): Raised $152M in a round led by GIC, valuing the wealth management startup at $1.9B. The company offers a self-clearing brokerage platform for investment advisers

5. Manychat (Messaging): Raised $140M in growth capital led by Summit Partners. Provides AI-driven conversational tools for businesses on platforms like Instagram and TikTok

State Of Startup Investing At The Beginning Of 2025 (Crunchbase, 7 minute read)

Global venture funding hit $113 billion in Q1 2025 — the highest since Q2 2022 — but the headline number is largely inflated by OpenAI’s historic $40B round, which alone represented over one-third of the global total and pushed the company’s valuation to $300 billion, second only to SpaceX among private startups. Late-stage deals dominated, with $81B raised, a 30% QoQ and 147% YoY increase. In contrast, early-stage funding dropped to $24B, its lowest level in five quarters

• AI funding reached an all-time high of nearly $60 billion; in fact, it comprised 53% of global venture capital in Q1

• North America led globally with $82B, driven by big-ticket U.S. deals. Despite more dollars, deal volume declined, reflecting a shift toward fewer but larger checks

• Asia saw a steep fall to $13B, its weakest quarter since 2014. China’s VC market halved YoY amid economic slowdown and U.S. trade tensions

• M&A activity rebounded, with $71B in exit value across 550 deals. Google’s planned $32B acquisition of cybersecurity firm Wiz would set a record for the largest private tech acquisition

Why all US crossover funds are averaging just 170 VC deals a quarter (Pitchbook, 3 minute read)

Crossover fund managers have significantly reduced their involvement in venture capital deals. In 2022, their cumulative U.S. deal value dropped to $89.6 billion, less than half of the record $172.4 billion seen in 2021. These investors, who manage both public and private assets, are now dealing with public market volatility and uncertain exit opportunities

• As a result, they are focusing on a smaller number of stronger, growth-stage, and mature startups, often avoiding early-stage investments like Series A

• Despite participating in just 4.9% of U.S. venture deals in 2024, crossover funds made up 42% of the total deal value

• This shift toward larger, more mature investments could make it harder for startups at earlier stages to secure funding, leading to down rounds or failed fundraising efforts

Q1’25 Global trends (KPMG, 10 minute read)

In Q1 2025, the US dominated global venture capital (VC) investments, securing more than two-thirds of the total funding, largely driven by a series of high-profile raises in AI and augmented reality. In contrast, Europe and Asia saw more muted growth, with Europe securing the second-largest share, led by Binance’s $2 billion raise and Reneo’s $624 million. Asia's VC market remained soft, experiencing a decline in funding with only three deals exceeding $500 million, including DayOne’s $1.2 billion raise from Singapore

• The AI sector continued to attract significant attention from investors globally, with the largest deals in the US, including OpenAI, Anthropic, and Infinite Reality

• Geopolitical uncertainties were reflected in growing investments in defense tech and spacetech. As tensions rose, defense tech investments surged, particularly in the US

• Governments worldwide made substantial moves to promote AI development in response to growing competition: The US announced The Stargate Project, a $500 billion initiative to develop next-gen AI infrastructure and the European Commission unveiled InvestAI, committing $206 billion to AI innovation

• Looking to Q2 2025, AI is expected to remain a key driver of VC investments, with a focus on industry-specific AI solutions, advanced robotics, and enabling technologies

🏦 ECONOMIC SNAPSHOT

Trump Promised a Markets Boom. 100 Days In, Stocks Have Only Seen Damage (Bloomberg, 5 minute read)

Donald Trump promised Americans an economic “boom like no other” if elected, but his first 100 days in office have instead been marked by sharp market turmoil. The S&P 500 Index has fallen about 8% since his inauguration on January 20, setting it on track for the worst first-100-days stock market performance since Gerald Ford in 1974. Despite an initial rally post-election, markets swung wildly as Trump imposed steep tariffs—most notably on April 2, causing the S&P 500 to lose over 10% in two sessions—before reversing many within days

• Consumer discretionary and tech sectors led declines, with companies like Deckers Outdoor Corp., Teradyne Inc., and Albemarle Corp. among the biggest losers

• Tesla Inc., United Airlines Holdings Inc., and Delta Air Lines Inc. widened their net-short positions on S&P 500 futures to the highest since December

• Corporate America has responded by cutting guidance and delaying investments, and Deutsche Bank strategists have abandoned predictions of a large S&P 500 advance in 2025

Global growth forecast slashed by IMF over tariff impact (BBC, 5 minute read)

The International Monetary Fund (IMF) has downgraded the US economic growth forecast for 2025 to 1.8%, down from the previous estimate of 2.7%, due to heightened uncertainty from trade tariffs. The global economy is expected to grow by 2.8% this year, a decrease from 3.3%. The IMF predicts a 40% chance of a US recession in 2025, up from 25% in October 2024, due to policy uncertainty, trade tensions, and slower consumer spending

• The IMF also revised down China’s growth forecast to 4%, and Mexico’s is expected to contract by 0.3%

• The IMF highlighted the negative impact of tariffs on global trade, with many firms reducing investments and purchases due to the uncertainty

• The IMF's forecasts reflect the impact of the trade policy and tariff uncertainties, with many countries facing slower-than-expected growth

China insists no tariff talks underway with Trump and Xi or top aides, despite U.S. claims (CNBC, 5 minute read)

On Monday, China again denied that it is negotiating with the U.S. to resolve the ongoing tariff war, pushing back against claims from President Trump and his aides. Chinese Foreign Ministry spokesman Guo Jiakun stated, "China and the U.S. are not engaged in any consultation or negotiation on tariffs," and rejected Trump’s assertion of a recent call with President Xi Jinping

• The denial comes in response to Trump’s imposition of 145% tariffs on Chinese imports, targeting a major supplier of U.S. goods. Trump's claim that new trade deals could be completed within 3–4 weeks

• Despite assurances from U.S. Treasury Secretary Scott Bessent that the U.S. economy is better positioned to endure the trade war, American business leaders warn of rising prices, product shortages, and even store closures if tensions persist

S&P 500 ekes out fifth winning day as Big Tech earnings loom (CNBC, 7 minute read)

The S&P 500 edged higher on Monday, gaining 0.06% to close at 5,528.75, marking its fifth consecutive day of gains. The Nasdaq Composite, however, dropped 0.1%, while the Dow Jones Industrial Average rose 114.09 points, or 0.28%, closing at 40,227.59. Despite some pressure on major tech stocks like Amazon, Apple, Meta Platforms, and Microsoft ahead of their earnings reports, the overall market showed a positive trend

• As of now, 73% of companies have reported earnings above analyst estimates, though Wall Street has tempered expectations for the second quarter and full-year outlooks due to the uncertainty caused by tariffs

• Treasury Secretary Scott Bessent suggested that the U.S. was making progress on trade proposals, particularly with India, but offered little clarity regarding a trade agreement with China

• Analysts are divided on the impact of President Trump's tariff policies, with some suggesting they may lead to a recession and economic slowdown, while others predict trade deals could emerge within the 90-day pause

🚀 IPO & EXITS

Tariff turmoil may have killed the tech M&A market’s comeback (TechCrunch, 6 minute read)

M&A activity in the tech market showed early promise in 2025, with several notable acquisitions in Q1, such as CoreWeave’s $1.7 billion purchase of Weights & Biases, ServiceNow’s $2.9 billion acquisition of Moveworks, and Google’s $32 billion purchase of Wiz. Despite these deals, optimism was disrupted by the announcement of sweeping tariffs by Donald Trump on April 2, 2025. This led to significant stock price drops, with tech companies seeing their stock values plummet, and market uncertainty rising

• Public tech companies, some of the largest acquirers, are now hesitant to make acquisitions due to depressed valuations and tariff impacts on their supply chains

• Despite this slowdown, some deals will still happen, particularly among well-capitalized private AI firms OpenAI, is rumored to be acquiring the AI coding startup Windsurf for $3 billion

• If tariffs resume in July or new trade deals are struck, stability may not come until the summer, historically a slow period for M&A

IPO Activity Halts Amid Tariff-Driven Market Chao (PYMNTS, 4 minute read)

Amid market volatility triggered by the U.S. tariffs announced on April 2, companies have largely paused their initial public offering (IPO) plans, halting preparations for listings worth over $120 billion in combined valuation. The uncertainty has also slowed mergers and acquisitions (M&A) activity, as dealmakers adopt a wait-and-see approach regarding regulatory changes under the Trump Administration

• IPOs have been hit especially hard because they require months of advance work, such as filings and investor roadshows, which are difficult to execute in unstable markets

• High-profile companies like Klarna, StubHub, Chime, Hinge Health, and Circle Internet Financial have all postponed or reconsidered their IPO plans. Klarna, for example, withdrew its IPO three weeks after filing paperwork with the SEC

• Meanwhile, M&A activity year-to-date has fallen 19%, according to LSEG, reflecting broader hesitation across capital markets

Venture Capital Secondary Market Booms as IPOs Stagnate (PYMNTS, 3 minute read)

With IPOs on pause amid market turmoil — worsened by President Trump's tariff announcements — venture capitalists are increasingly shifting toward the secondary market to buy and sell private company shares. Once considered a last-resort option, this market has matured and is projected to handle $122 billion in assets by 2025, up from just $25 billion in 2012

• The move to secondary sales is partly driven by a collapse in the IPO market

• IPOs raised $164 billion in 2024, down dramatically from a record $641 billion in 2021

🌍 WHAT A TIME TO BE ALIVE

Getting U.S. Citizenship For Investor Immigrants: Gold Card Vs. EB-5 (Forbes, 5 minute read)

Trump’s proposed Gold Card has sparked major debate among global elites and the U.S. investor immigration community. Designed as a fast track to U.S. citizenship for wealthy “world-class global citizens,” the Gold Card would allow investors to bypass traditional requirements like job creation and foreign income taxation in exchange for a one-time, non-refundable $5 million payment to the federal government

• This program directly challenges the long-standing EB-5 visa, which demands a lower investment tied to job creation and offers the chance to recoup funds

• While the EB-5 was recently revitalized through the 2022 Reform and Integrity Act, its slow processing times remain a concern

• In contrast, the Gold Card promises faster residency and significant tax breaks but raises serious legal and constitutional issues, particularly regarding the equal treatment of immigrants under U.S. law

🗞️ AI8 VENTURES HIGHLIGHT

Wall Street's Wild Ride into 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 artificial intelligence transforming industries, geopolitical shifts reshaping markets, and macroeconomic forces creating new uncertainties.

Despite the challenges, the U.S. economy outperformed its developed market peers in 2024, with real GDP growth reaching 2.8%. Consumer spending remained resilient, and unemployment stayed relatively low. Just weeks before the election, The Economist described the U.S. economy as the “envy of the world.”

After Donald Trump’s victory in November 2024, markets initially anticipated controlled inflation and a less restrictive monetary policy.

Fast-forward a few months to March 2025, and the optimism has faded. With capital markets reacting negatively to renewed trade war fears, over $4 trillion in market value has been erased since the S&P 500’s peak last month—a dramatic reversal from the bullish sentiment surrounding Trump’s agenda.

What happened at year-end, and what comes next?

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Happy reading,

AI8 Ventures’ Research & Investment Team