VC Update: May 2nd

Hello Reader,

Here is a summary of key Venture Capital developments from April 28th to May 2nd, 2025, focusing on North America and Europe, drawing on the provided sources:

Major Macro Developments with Impact on Investment Environment

• The inflation-adjusted U.S. GDP fell -0.3% year-over-year, indicating an economic contraction which precedes heightened trade tensions and suggests structural issues rather than transient problems [Wall Street Rollup, Thu, 01 May 2025].
• Rising concerns persist over Trump’s renewed tariffs and their potential long-term impact on tech giants [Martin Peers, Fri, 02 May 2025]. Tariff-induced distortions are specifically anticipated in sectors like autos, retail (toys), and pharma [StrictlyVC, Thu, 1 May 2025].
• European startups may face higher cloud computing costs due to potential U.S. tariffs under Donald Trump’s trade policy, as major cloud providers might pass on rising supply chain costs [Sifted Newsletter, Tue, 29 Apr 2025].
• A U.S. federal judge accused Apple of “willfully” violating a 2021 antitrust injunction, highlighting potential increasing regulatory pressure on large tech companies [StrictlyVC, Thu, 1 May 2025].

Venture Capital Trends & Deals

• Major Trends Shaping the VC Landscape:
  • Caution is mounting in M&A activity despite a strong Q1 where global deal value exceeded $1 trillion from over 12,000 deals, while optimism around IPOs has faded [PitchBook News, Wed, 30 Apr 2025].
  • Private equity firms are increasingly targeting defense assets, which were historically viewed as “toxic,” reflecting a shift driven by changing geopolitical perspectives [Exec Sum - Litquidity, Mon, 28 Apr 2025; Exec Sum - Litquidity, Mon, 28 Apr 2025].
  • Early-stage deal activity remains high despite the broader market caution [FinSMEs, Wed, 30 Apr 2025; Exec Sum - Litquidity, Mon, 28 Apr 2025].
  • The VC market in France hit a five-year low in Q1 2025, with only €1.4 billion invested, attributed partly to political instability and proposed budget shifts [PitchBook News, Fri, 02 May 2025].
• Biggest Deals (by value) & Early-Stage Rounds:
  • Lightrun (NYC) raised a $70M Series B for its developer observability platform [FinSMEs, Mon, 28 Apr 2025].
  • Veza raised a $110M Series D for identity management [PitchBook News, Tue, 29 Apr 2025].
  • True Anomaly raised a $260M Series C for multimodal aerospace technology, signaling rising dual-use VC interest in national security and communications [Wall Street Rollup, Thu, 01 May 2025].
  • Babel Street secured $50M for its AI-powered analytics platform focused on national security [FinSMEs, Tue, 29 Apr 2025].
  • Pliant raised an €18M Series A for financial infrastructure tools [PitchBook News, Tue, 29 Apr 2025].
• Prioritized Fintech/Insurtech Deals under $20M:
  • The sources for this week noted a healthy momentum in early-stage fintech investments across Europe, although specific deals under $20M were not extensively detailed [Sifted Newsletter, Tue, 29 Apr 2025; FinSMEs, Mon, 28 Apr 2025; Exec Sum - Litquidity, Mon, 28 Apr 2025].
  • Momentum in early-stage FinTech and infrastructure solutions is noted particularly across Europe and the UAE [FinSMEs, Mon, 28 Apr 2025].
  • Stripe completed its largest-ever acquisition, buying Bridge, a stablecoin payments platform, indicating growing mainstream adoption of stablecoins in payments [a16z Fintech Team, Mon, 28 Apr 2025].
  • Pliant raised an €18M Series A for financial infrastructure tools [PitchBook News, Tue, 29 Apr 2025]. (Note: This is just under the $20M threshold).
  • Cognito raised a $13M Series A for its platform providing AI agents for businesses, which has relevance to enhancing operational efficiency in various sectors, potentially including financial services [FinSMEs, Wed, 30 Apr 2025].
• Notable Exits (IPOs, M&A) and Company Shutdowns:
  • Allianz’s planned acquisition of Specialty Group collapsed because conditions were not met, marking a notable Insurtech-related M&A stumble [FinSMEs, Tue, 29 Apr 2025].
  • Stripe acquired Bridge, a stablecoin payments platform, in its largest acquisition to date [a16z Fintech Team, Mon, 28 Apr 2025].
  • Google’s $32B acquisition of cybersecurity firm Wiz is currently awaiting regulatory approval, highlighting continued M&A activity in specific sectors [PitchBook News, Tue, 29 Apr 2025].

VC Ecosystem Updates

• New VC Fund Launches and Capital Raises:
  • CIV Fund One closed over $210M for its inaugural fund, which is focused on reshaping critical industries [FinSMEs, Wed, 30 Apr 2025].
  • Cocoon Capital, a VC firm focusing on Southeast Asia, held a first close of its third fund at $30M [FinSMEs, Wed, 30 Apr 2025].
  • Blackstone raised a substantial $10B PE fund specifically targeting high-net-worth individuals [Exec Sum - Litquidity, Thu, 01 May 2025].
  • Arbor Investments finished raising $1.2B for its sixth private equity fund, which focuses on the food and beverage sector [Exec Sum - Litquidity, Thu, 01 May 2025].

Sector-Specific Insights

• Artificial Intelligence (AI):
  • AI continues to dominate VC investment, but concerns about overcapacity and a lack of differentiation among foundational models are noted [Benedict Evans, Tue, 29 Apr 2025].
  • Specific AI-related deals include Reducto’s $24.5M Series A for an AI data ingestion platform [FinSMEs, Mon, 28 Apr 2025], Babel Street’s $50M for AI-powered analytics [FinSMEs, Tue, 29 Apr 2025], and Cognito’s $13M Series A for AI agents for businesses [FinSMEs, Wed, 30 Apr 2025].
  • Defense tech crossover talent is actively creating “dual-use” startups that leverage AI for both government and large-scale infrastructure markets [Drake Dukes, Mon, 28 Apr 2025].

​Unsubscribe · Preferences​