Updated: 2026-07-12

First-quarter 2025 data from Crunchbase and CB Insights is clear: global startup funding has rebounded after two-plus years of correction. The problem is that the rebound is not evenly distributed. Almost all new money goes to companies presenting themselves as AI, while the rest of the ecosystem is flat or declining. It is worth separating signal from noise before drawing conclusions about whether the bull cycle is back.

Key takeaways

  • Global Q1 2025 funding has grown vs the same quarter in 2024, but AI concentration is historic.

  • Excluding AI-company rounds, aggregate growth is modest or negative in some segments.

  • Consumer fintech, quick commerce and crypto remain in adjustment, with round counts falling sharply even as individual checks grow.

  • A non-trivial fraction of AI labeling is opportunistic: products whose advantage depends on the underlying model, not proprietary technology.

  • Buying critical software from startups today warrants reasonable financial diligence on the vendor.

What aggregate numbers say

Per Crunchbase, global startup funding in Q1 2025 reached $113 billion, with OpenAI’s $40 billion round alone accounting for more than a third of the quarter’s total. CB Insights, using a somewhat different methodology, puts the quarterly figure at $121 billion, the highest in nearly three years.

The important detail is concentration. Crunchbase estimates AI absorbed about 53% of all global investment for the quarter; CB Insights puts AI companies at 20% of all deals worldwide, double the share at the time ChatGPT launched in 2022, and finds mega-rounds ($100 million or more) accounted for 70% of total funding, with 145 mega-rounds closing, the highest quarterly count since Q3 2022. A handful of very large bets on foundation model labs and compute-infrastructure companies, including Anthropic ($3.5 billion Series E) and Safe Superintelligence ($2 billion Series B), account for most of that volume. The median round for other AI startups, those building on top of existing models, is more restrained but has also risen versus 2024.

What is happening in non-AI segments

Segments that concentrated capital in 2021 and 2022 (consumer fintech, quick commerce, crypto) remain in full adjustment. Crunchbase puts global Q1 2025 fintech funding at $11.4 billion across 1,097 rounds; the full-year trend confirms the underlying pattern, bigger checks while round count falls sharply (down 23% year over year), a sign of concentration inside fintech too. Several previous-wave unicorns have closed internal rounds at valuations that, without saying so openly, are significant markdowns.

More traditional verticals like B2B SaaS, climatetech or digital health sit in an in-between position: they haven’t fallen as hard, but neither enjoy the AI rebound. In Europe the picture is more moderate: Crunchbase puts the continent’s Q1 2025 funding at $12.6 billion, flat versus both the prior quarter and 2024. Spain, though, had a notable quarter: $1 billion raised, the first quarter in more than two years Spanish startups have cleared that mark, with no mega-rounds but reasonable seed and pre-seed activity.

The AI-labeling distortion

A now more visible phenomenon is opportunistic labeling. Companies that in 2022 presented as vertical SaaS are repositioning as AI startups, sometimes with real technical basis and sometimes with a thin wrapper over a third-party model. Investors know this and filter accordingly, but inflated labeling affects aggregate data.

The practical consequence is that AI funding figures are less solid than they appear. A non-trivial fraction corresponds to products whose competitive advantage depends on the underlying model. If OpenAI, Anthropic or Google change pricing or restrict the API, those startups lose the business. This provider-dependency risk connects directly with the lessons of FinOps applied to AI, where token-cost exposure also depends on the third-party model.

Implications for founders

The read for founders raising now is clear:

  • With a defensible AI angle: the best market in years. Seed and Series A valuations are comparable to 2021, and closing times have shortened. The risk is closing at high multiples that later force unsustainable growth rates.

  • Without an AI angle: raising is slower, investors demand much more substantive traction, valuations remain compressed. Extending runway with bridge financing or chasing profitability over growth are reasonable paths.

For technical teams, pressure to add some AI story to the product is strong. The advice is not to force it. If there is a real application that improves the product, go ahead; if it is purely decorative to please an investor, it usually derails the roadmap and creates product debt. The same trends are visible in Y Combinator’s 2025 cohorts, where vertical agents with measurable value clearly dominate.

Implications for software buyers

A less-discussed point is that of enterprise customers buying software from startups. In an environment of extreme concentration, vendor financial health is very uneven:

  • Well-capitalised AI startups have two to three years of runway.

  • Those in other categories often do not, and discontinuity risk is real.

Anyone buying critical software should demand reasonable financial visibility before signing multi-year contracts: months of runway, whether they are at breakeven, who the investors are, and whether they are committed for the next round.

My read

Q1 2025 does not mark the return of a generalised bull cycle. Rather it marks a divergence. New money is betting near-monotonically on AI, with historic concentration on a handful of very large bets. The rest of the ecosystem remains in the correction cycle running since 2023.

Two scenarios are plausible: the AI wave keeps generating returns sufficient to justify valuations and eventually drags other categories up; or a few large bets miss expectations, multipliers compress, and capital retreats sharply. Not a 2022-style correction, because underlying productivity is more solid and measurable. Rather an adjustment in the speculative portion, with clear survivors justifying valuations and clear casualties.

For today’s founders: build with financial discipline even when the market offers generosity. For investors: differentiating real competitive advantage from AI wrapper is the work of the coming quarters.

This article is also available in Spanish: Financiación de startups 2025: todo lo que llama IA sube.

Sources

  1. Crunchbase News: Global Q1 Startup Funding Posts Strongest Quarter Since Q2 2022 With A Third Going To Massive OpenAI Deal
  2. CB Insights: State of Venture Q1’25 Report
  3. Crowdfund Insider: Venture Capital In Q1 2025 Driven Predominantly By AI
  4. Crunchbase News: Europe’s VC Funding Stayed Flat In Q1, Even As Healthcare Added A Third