| | | | | The Research Pitch | | June 28, 2025 | | | | | | We need your input: To capture as many viewpoints as possible, we're asking allocators, asset managers, and other participants in the private funds ecosystem to take our short 2025 Sustainable Investment Survey. (We have prizes!)
Regional outlooks: Our analyst teams are looking back on the 2025 predictions we published in December. Read more about how our expectations for VC, PE, M&A, and IPOs have played out across markets in EMEA and APAC.
The state of climate tech: VC activity in the climate tech vertical declined for a third straight year in 2024—with this year on a flat pace YoY. Our research dives deeper into the data and explores the potential impact of new AI applications, supply chain disruptions, and policy changes. Read more. | | | | | | | | | All eyes on AI and liquidity: VC's 2025 outlook | | With tariffs and heightened geopolitical unrest (to say the least), the first half of 2025 has contained a number of market-roiling surprises. On April 8, the S&P 500 closed down 12% from just a week prior due to tariffs and market uncertainty. This week, it hit all-time highs, about 23% higher than April 8. Going into the year, the venture market was hopeful for liquidity. With the Trump Administration ushering in a more business-friendly environment, the public market was seemingly ready to support an increase in IPOs. Those hopes have largely fallen flat. Though several companies have completed new listings and received strong support, there are few companies in the pipeline at the moment. Secondaries have become the VC world's new favorite vehicle for exits. Because of the market stagnation, only about $23 billion has been raised for new funds. The lack of liquidity continues to pressure LPs, which continue to allocate to other strategies rather than VC.  | | Value creation has been a story of AI vs. everyone else. | The overall picture of the market might be dim, but that discounts the brightness of AI. The speed with which AI companies have scaled has driven dollars and VC interest across all stages. In Q1, 71% of deal value was placed into the sector, and 41% of investors who were active during the quarter made a deal with an AI company. This is to say that the 2025 market has not shaped up exactly as most expected. Our December outlooks were moderately optimistic, though realistic, with the understanding that the market was still being hampered by trends from 2021. To read our full assessment of those predictions, download our 2025 US Venture Capital Outlook: Midyear Update. | | | | | | | Our H2 2025 outlook: What's next for PE? | | The private equity ecosystem entered 2025 with strong momentum that was halted amid broad market uncertainty at the start of Q2. PE is now tasked with balancing these new market headwinds with the desire to maintain said momentum. At this time last year, the key debate centered on inflation and when base rates would be lowered. Today, a different controversy takes center stage: global trade. Hopes for a resurgence in growth driven by pro-business policies have dimmed, overshadowed by the unpredictability of US tariffs. Business investment, particularly in the second half of 2025, will be critical. For now, companies are delaying decisions—on inventory, on capital expenditures, and on supply chain commitments. Amid the noise, our conviction in PE remains. In our view, the asset class is uniquely equipped to navigate choppy macroeconomic waters. What sets PE apart? Ample dry powder, a long-term horizon, and a demonstrated capacity to adapt. With dry powder of over $1 trillion in equity strategies and roughly $500 billion in private debt strategies, the war chest is full. Despite the hiccups, IPO activity for PE has gotten off to a healthy start, capturing 56% of the capital raised on major US exchanges this year. However, the challenge going forward is whether the IPO window will remain open with an appetite for PE-backed companies. Similarly, the recent market slowdown will likely stall exit activity, seeing sponsors hold onto portfolio companies for longer, once again increasing the number of companies being held in funds that are six to nine years old that need to be exited to help restart the PE flywheel. This relapse in exit activity will once again limit distributions to LPs and likely hamper fundraising activity for the remainder of the year. The second half of 2025 will be pivotal in determining whether PE can regain the momentum seen in 2024 or if uncertainty will continue to hinder activity. For the full update on our outlooks and what's ahead, download our 2025 US Private Equity Outlook: Midyear Update. | | | | | | | | | |
Emerging Tech Indicator
With leading foundation models maturing, seed and early-stage investments by the top VC firms in Q1 consolidated around AI agents and related infrastructure.
With these high-profile backers, emerging AI startups are poised to usher in a new era of enterprise operations.
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Our ETI dataset focuses exclusively on early-stage deals made by a segment of the highest-performing venture investors.
Learn more about which technologies these firms are funding and what it foretells about where venture is headed:
Read the free research
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July 8-23: Join our midyear outlooks webinar series to hear about shifts in private market expectations amid increased uncertainty across the VC, PE, and credit segments. We'll also have regional sessions for EMEA and APAC. More information here.
July 14: Another upcoming webinar will focus on the Australian VC landscape, highlighting the market's unique challenges and opportunities, as well as expectations for growth in the coming years. Register here.
July 24: We invite you to visit the PitchBook booth at ACG Seattle's Northwest Middle Market Growth Conference. Our global head of quantitative research & market intelligence, Dan Cook, will speak in the M&A Financing and Market Update morning session.
Sept. 24-26: PitchBook is partnering with IPEM to offer a €500 discount for IPEM Paris 2025, an event for private market investors and fund managers from around the world. Get your pass. | | | | | | | | | |
Our insights and data featured in the press:
• In the AI frenzy, "companies are acquiring other companies not necessarily for their products or their services or their revenues but just for their talent." [NYT]
• What's next for digital health IPOs? [Business Insider]
• A key factor is still needed to gauge the success of developments in the solid-state battery market. [WSJ]
• Agtech venture funding dropped to $1.6 billion across 137 deals in Q1, a 25% quarterly decline in deal count. [Reuters]
If you're a journalist interested in interviewing our analysts or requesting data, contact our PR team.
| | | | | | | | | | | | | | | | | | | | Since yesterday, the PitchBook Platform added: | | 523 Deals | 2137 People | 686 Companies | 26 Funds | | | | | | | | | | | | | | |
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