Week of March 31st, 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: Fleetio And Mercury Nab Massive Rounds (Crunchbase, 5 minute read)

1. Fleetio (Fleet Management): raised $450 million in a round co-led by Elephant and Goldman Sachs Alternatives’ growth equity branch. The funds will finance the acquisition of Auto Integrate, helping Fleetio manage 8 million+ vehicles and process 13 million+ repair orders annually

2. Mercury (Fintech): secured $300 million in a Series C led by Sequoia Capital, bringing its valuation to $3.5 billion, more than double its 2021 valuation of $1.6 billion. The company provides business banking solutions

3. Island (Cybersecurity): raised $250 million in a Series E round led by Coatue Management, valuing the company at $4.8 billion. This represents a 60% increase from last year’s valuation of $3 billion.

4. Aura (Cybersecurity): raised $140 million in a Series G round at a $1.6 billion valuation. The Boston-based company focuses on consumer cybersecurity, offering protection against scams, fraud, and identity theft

5. Supira Medical (Medical Device): the company specializes in percutaneous ventricular assist devices, secured $120 million in Series E funding led by Novo Holdings and Qatar Investment Authority

Healthcare And Security Led For New Unicorns In February (Crunchbase, 5 minute read)

In February, nine companies joined the Crunchbase Unicorn Board, with healthcare and cybersecurity emerging as the leading sectors. Artificial intelligence played a significant role in the success of many of these new unicorns, particularly in healthcare, cybersecurity, and sales & marketing. Collectively, these nine companies contributed $15.6 billion in value and raised $1.9 billion in funding

• Of the new additions, four were U.S.-based, while Saudi Arabia, China, Israel, Ireland, and Canada each added one new unicorn

• Growth equity firms led six of the funding rounds, while VC firms led three

• Collectively, these nine companies contributed $15.6 billion in value and raised $1.9 billion in funding

• Notable new unicorns included Abridge ($2.8 billion valuation), OpenEvidence ($1 billion valuation), and Tines ($1.1 billion valuation)

🏦 ECONOMIC SNAPSHOT

Wall Street braces for Trump’s April 2 tariff deadline—it foresees 18% EU import duties and a 43% chance of a U.S. recession (Fortune, 5 minute read)

Analysts are closely watching April 2 for potential new U.S. tariff announcements, with concerns growing over their economic impact. President Trump has already imposed and threatened tariffs on key trading partners, including the EU, Canada, Mexico, and China, with speculation that a universal tariff could be introduced. Markets expect Europe to face a sustained 18% U.S. tariff rate, with most analysts forecasting rates between 10% and 25%

• Deutsche Bank reports an average 43% probability of a U.S. recession, with 23% of respondents placing the risk above 60%

• Trump has taken a harder line on the EU, claiming it was formed to “screw” the U.S. He argues tariffs will correct trade imbalances,

• While JPMorgan CEO Jamie Dimon warns a 25% universal tariff would be “quite recessionary and inflationary”, Commerce Secretary Howard Lutnick dismissed recession fears, saying “no chance”, while Treasury Secretary Scott Bessent admitted “there are no guarantees” the U.S. can avoid an economic downturn 

President Trump Imposes 25% Tariffs on Imported Automobiles (AP, 3 minute read)

President Donald Trump has announced a 25% tariff on all imported automobiles and certain auto parts, effective April 3, 2025. The administration asserts that this measure aims to boost domestic manufacturing and address national security concerns. However, industry experts warn that the tariffs could lead to increased vehicle prices for consumers and potential retaliatory actions from trade partners

• The tariffs apply to all foreign-made cars and specific auto parts, including engines and transmissions

• The administration claims the tariffs will encourage domestic production and protect national security

• Critics argue that the tariffs may raise consumer prices and provoke trade disputes

President Trump Threatens Tariffs on Russian Oil Imports Amid Ukraine Peace Negotiations (Reuters, 4 minute read)

Amid stalled Ukraine peace negotiations, President Donald Trump has threatened to impose secondary tariffs ranging from 25% to 50% on countries purchasing Russian oil if Russia does not agree to a ceasefire within a month. The President expressed frustration with Russian President Vladimir Putin over the lack of progress in resolving the conflict. The Kremlin acknowledged ongoing discussions with the U.S. regarding potential peace initiatives and bilateral relations

• President Trump is considering significant tariffs on nations importing Russian oil to pressure Russia into a Ukraine ceasefire

• The President’s frustration stems from perceived delays by Russia in the peace negotiation process

• The Kremlin has confirmed ongoing talks with the U.S. on peace efforts and bilateral issues

U.S. economy grew 2.4% in the 4th quarter after upgrade in final growth estimate (AP, 3 minute read)

The U.S. economy expanded at a 2.4% annualized rate in Q4 2024, slightly revised up from previous estimates, but slower than the 3.1% growth in Q3. This was largely driven by strong consumer spending, which rose at a 4% pace. However, business investment declined, with an 8.7% drop in equipment spending, and reduced business inventories subtracted 0.84 percentage points from GDP growth

• 2024 GDP grew 2.8% (down from 2.9% in 2023); consumer spending rose 4%; business investment declined, with an 8.7% drop in equipment spending

• Trade tariffs, inflation, and financial uncertainty could slow growth, with declining consumer confidence impacting retailers

Core inflation in February hits 2.8%, higher than expected; spending increases 0.4% (CNBC, 3 minute read)

The Federal Reserve’s key inflation measure, the core PCE price index, rose 0.4% in February, exceeding expectations and marking the largest monthly gain since January 2024. This put the 12-month core inflation rate at 2.8%, above the forecasted 2.7%. Meanwhile, overall inflation rose 0.3% for the month and 2.5% year-over-year, in line with estimates

• The personal savings rate climbed to 4.6%, its highest level since June 2024, signaling increased household caution

• Stock futures and Treasury yields briefly dipped following the report, as investors recalibrated expectations for Federal Reserve policy

• The Fed remains cautious on rate cuts, with concerns over the inflationary impact of President Trump’s tariffs, which could further complicate monetary policy

🌱🌎 IMPACT & CLIMATE RESILIENCE

The Trump administration has a new way to pressure companies to ditch DEI (CNN, 5 minute read)

The Trump administration has threatened to block M&As of media companies that promote diversity, equity, and inclusion (DEI) policies, using the Federal Communications Commission (FCC) to enforce this stance. FCC Chairman Brendan Carr stated that companies promoting DEI practices could face blocked mergers, arguing that such policies conflict with the "public interest" standard required for merger approvals. This marks a new approach, as previous administrations only blocked mergers based on competition concerns, not HR policies

• Legal experts and advocacy groups criticized the move, highlighting that DEI is generally aimed at improving representation of underrepresented groups, and the Trump administration's attacks on DEI, labeling it as "illegal and immoral discrimination," lack legal grounding

• Carr's comments have left companies uncertain about which DEI practices may be deemed unlawful, leading to confusion and concerns about potential investigations and litigation

• Major corporations like Meta, Amazon, and Goldman Sachs have already rolled back DEI policies in response to the administration's pressure

Tech In Trump era, companies are rebranding DEI efforts, not giving up (CNBC, 7 minute read)

Companies across the U.S. are reevaluating their diversity, equity, and inclusion (DEI) initiatives in response to political and legal pressures. Many are scaling back or rebranding these programs, shifting to terms like “opportunity” and “belonging” to avoid controversy. The shift has accelerated following Trump’s executive order restricting DEI programs in federal agencies and the private sector, impacting nearly 50 companies

• Major corporations, including Google, Amazon, and JPMorgan, have restructured or renamed their DEI efforts

• Fortune 100 companies saw a 22% decrease in the use of terms like “DEI” and “diversity” and a 59% increase in terms like “belonging” between 2023 and 2024

• Legal and regulatory scrutiny has led to budget cuts, with some firms reducing DEI spending by up to 90%

• Despite these changes, 73% of companies still include DEI in their values, and 86% of workers have a neutral-to-favorable view of workplace diversity efforts

• Many businesses are shifting focus to metrics like promotion rates and retention rather than hiring quotas

🚀 IPO & EXITS

The Trump antitrust stance? M&A pros are still guessing (Pitchbook, 4 minute read)

The uncertainty surrounding the Trump administration's approach to antitrust regulations is causing M&A professionals to proceed cautiously, as they await clarity on how the Federal Trade Commission (FTC) and Department of Justice (DOJ) will define monopolies and unfair competitive practices. Despite high-profile deals being blocked, some analysts suggest that external factors, such as high interest rates and tariffs, are the primary reasons for the slowdown in M&A activity, rather than just antitrust concerns

• While over 1,500 U.S. M&A deals have been struck in 2025 Q1, this is a significant decrease compared to 8,387 transactions recorded in Q1 2024

• The FTC blocked the $627 million acquisition of healthcare startup Surmodics, and the DOJ moved to block Hewlett Packard’s $14 billion acquisition of Juniper Networks, signaling increased scrutiny on large transactions

• Experts predict a possible uptick in private equity growth and rollup deals later this year if market conditions and interest rates improve

US VC secondaries dry powder is growing — but deals are remaining concentrated (Pitchbook, 3 minute read)

Secondary deals in U.S. startups are aligning with overall VC priorities, particularly in trendy sectors like AI. The secondary market in the U.S. is estimated to be between $41.8 billion and $59.9 billion, with tender offers from seven unicorns totaling $16.7 billion in 2024. However, secondaries accounted for only 2% of the $2.9 trillion valuation of unicorns

• While secondaries have outpaced traditional VC dry powder, with $7.2 billion in 2024, they still represent only 2.3% of the dry powder in traditional VC funds

• Secondary transactions saw a median premium of 8.9% in Q4 2024, a significant shift from a 47.7% median discount in 2023

• This change reflects lower interest rates driving higher investor interest in secondaries, although buyers remain cautious with less secure bets

Is CoreWeave’s Debut an Ill Omen for I.P.O.s? (The New York Times, 4 minute read)

CoreWeave, an artificial intelligence company that rents computing power, launched its IPO with disappointing results, serving as a potential indicator of broader issues in the IPO market. The company priced its shares at $40 each, lower than the expected range of $47 to $55, and sold 37.5 million shares—about 23% less than originally planned

• This resulted in raising $1.5 billion at a $23 billion valuation, far below initial expectations of $4 billion at a $35 billion valuation

• Despite Nvidia's backing, the IPO's performance raises concerns about market conditions

• Analysts pointed to broader economic challenges such as rising inflation and concerns over tariffs from President Trump, which have contributed to a more cautious investment climate

🗞️ 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