The global venture capital market demonstrated resilience and selective growth in the third quarter of 2025, with artificial intelligence (AI) and financial technology (Fintech) startups driving significant valuation increases. Recent reports from industry analysts PitchBook and Carta detail a maturing investment environment characterized by rising early-stage valuations and a decline in down rounds.
In Europe, PitchBook's Q3 2025 European Venture Valuations Update found that valuations remained elevated, though signs of moderation emerged. AI continued to dominate deal flow, particularly at Series A-B stages, while Fintech saw the strongest valuation gains at the seed stage. The report noted that median valuations in the UK and Ireland increased across most stages, with Series C-D median valuation soaring to €279.2 million, double the previous year's level. In France & Benelux, valuations rose broadly, with Series C-D reaching €204.2 million.
In the United States, Carta's Q3 2025 State of Private Markets report revealed that startups on its platform raised $27.3 billion in new funding, the highest quarterly sum in three years, representing a 5% year-over-year increase. The median pre-money valuation for seed rounds hit a new high of $16 million, up 14% from last year, while Series A valuations climbed to a record $49.3 million. Down rounds fell to just 17% of new venture rounds, the lowest rate in nearly three years.
Sector analysis showed AI's outsized influence, with mega-rounds propelling totals. In the U.S., software (SaaS) and hardware sectors accounted for nearly half of all venture funding, with software startups raising $8.98 billion. The San Francisco Bay Area reigned supreme, attracting $8.1 billion in funding—more than New York, Boston, and Los Angeles combined—bolstered by its central role in the AI boom.
Both reports conclude that the market is entering a more rational phase, with liquidity constrained by scarce IPOs and widening valuation gaps between private and public companies, yet buoyed by strong acquisition activity and sector-specific strength in AI and Fintech.
