It looks like voice AI may have found its sweet spot: ordering fries with that.

Yum! Brands — which owns Taco Bell, KFC, and Pizza Hut and has a larger restaurant footprint than any other company globally — recently announced a partnership with Nvidia to deploy AI (including AI voice ordering) throughout hundreds of restaurants starting in April. 

Similarly, Jersey Mike’s Subs has partnered with SoundHound on a 50-store pilot of AI voice ordering, while Wendy’s now uses Google Cloud LLMs to process orders in English and Spanish.

Voice AI stands to reduce labor costs in high-turnover positions while also increasing order throughput and accuracy. It also means staff can be redeployed to food preparation or customer service roles that drive higher satisfaction.

But fast food is just the tip of the iceberg for voice AI.

Below, we get into:

• Why voice AI matters 
• Market maturity
• Challenges to adoption

Why does voice AI matter?

For customer interactions, voice conversations offer a far more expressive mode of communication than text-based channels. 

Yet the industry remains stuck in a purgatory of robo-call decision trees and endless holds. 62% of customer calls to SMBs go unanswered, while upwards of 70% of business calls that connect still end up putting customers on hold, with most hanging up within minutes. 

Advances in AI speech models could break this cycle. Voice AI models are shifting toward processing audio directly — rather than needing to translate it to text, process it using an LLM, then convert it back into speech — and are getting closer to the cadence of human conversation (<300ms latency).

The progress has fueled a surge in equity funding to voice AI solutions, which grabbed $2.1B in 2024, per CB Insights’ funding data. Momentum has continued in 2025 so far, with companies raising nearly $500M in Q1’25.

ElevenLabs‘ $180M round from investors including a16z, Salesforce Ventures, and Sequoia Capital was a big part of this year’s strong start. ElevenLabs has already hit $100M in ARR — just 3 years after its founding.

On the whole, though, the voice AI market remains in its early stages — and faces growing pains.

The market is still nascent

Most of the voice AI market remains in the earlier stages of commercial maturity, with 85% in levels 1, 2, or 3 on CB Insights’ Commercial Maturity scale. More than half are still developing or validating their products, while 39% are beginning commercial distribution and starting to gain customers.

Most startups here were founded in just the last 3 years, as the chart below demonstrates. 2023 was a breakout year, seeing the number of companies founded grow 2x year-over-year, from 35 to 70.

This growth has been driven by advancements in voice AI models — including OpenAI‘s Realtime API for speech-to-speech applications, launched in late 2024 — which jumpstarted applications across use cases.

One additional signal that voice is hot: companies building voice AI applications are making up larger chunks of Y Combinator’s recent cohorts.

CBI customers can dive into the data on 270 companies developing voice AI capabilities — with a focus on voice generation — here.

Growing pains

Despite the excitement, challenges remain around reliability and trust. 

Voice AI agents still struggle with complex conversations and unpredictable inputs, leading most enterprises to start out by deploying them in low-stakes scenarios.

In theory, fast-food ordering should be a natural fit — interactions are brief and highly predictable. The AI only needs to understand a limited vocabulary of items and modifiers.

But the reputational risk of even the occasional mishap can be high. McDonald’s, for instance, started a voice AI pilot with IBM back in 2021, but pulled it in 2024 after videos of inaccurate orders went viral on TikTok. 

Customer acceptance of voice AI interaction also varies dramatically by region. As one Cognigy customer told us:

Meanwhile, a strategic divide is emerging in the voice AI market: cloud vs. edge processing.

Cloud-based solutions from tech giants offer advanced capabilities but raise privacy concerns, while edge-based platforms process data locally with better privacy but more limited features.

A medtech executive highlighted this tradeoff, telling us they chose Sensory over Microsoft or Amazon despite losing out on more robust capabilities:

This divide will shape which players win in different sectors, with edge solutions likely dominating in sensitive industries like healthcare and financial services, while cloud platforms prevail in consumer and retail applications.

For more on how AI will shape every aspect of the customer experience, get the free report here.

RELATED RESOURCES:

• Data on 270 voice AI companies
• Market report on voice AI development platforms
• State of Venture Q1’25 Report

For information on reprint rights or other inquiries, please contact reprints@cbinsights.com.

The post Voice AI’s sweet spot: ordering fries with that appeared first on CB Insights Research.

Opportunities across stages and geographies have fueled growth in deal sizes globally. So far in 2025, the median deal size sits at a record $3.5M.

While AI continues to dominate headlines and venture activity, sectors like fintech, digital health, and retail tech all recorded quarterly funding increases as investors diversify beyond core AI infrastructure plays.

Download the full report to access comprehensive data and charts on the evolving state of venture across sectors, geographies, and more.

Below, we break down the top stories from this quarter’s report, including:

• Quarterly funding jumps to $121B, even as deal count keeps falling
• AI now drives 1 in 5 global venture deals
• Eight early-stage AI companies raise $100M+ mega-rounds
• Early-stage deal sizes pace at an all-time high
• Billion-dollar M&A exits hit a new quarterly record

We also outline the key trends shaping venture dealmaking for the rest of 2025 — from AI agent specialization and the voice AI boom to crypto’s rebound.

Let’s dive in.

Top stories in Q1’25

1. Quarterly funding jumps to $121B, even as deal count keeps falling

Q1’25 saw global venture funding rise to $121B — the highest quarterly total since Q2’22 — driven by OpenAI’s $40B raise, which values the company at $300B. This ties OpenAI with ByteDance as the second-highest-valued private company globally (behind SpaceX at $350B).

The OpenAI funding round — led by SoftBank and backed by Microsoft, Thrive Capital, and others — marks the largest private funding round in history. Even excluding this deal, total funding in Q1’25 would have reached $81B, still the second-highest quarterly figure since Q3’22.

However, global deal count slid for a fourth straight quarter, to 5,846 deals, down 7% QoQ and 28% YoY.

The stark contrast between soaring funding and declining deal count highlights growing capital concentration. 

Mega-rounds (deals worth $100M+) accounted for 70% of all funding this quarter, up from 60% in Q4’24. A total of 145 mega-rounds closed in Q1’25 — the highest quarterly total since Q3’22, which saw 157.

While AI startups remain the primary beneficiaries of this capital concentration — grabbing more than half of the quarter’s funding — other sectors are showing resilience. Fintech funding increased 18% quarter-over-quarter to $10.3B, retail tech rose 18% to $6.5B, and digital health grew 47% to $5.3B.

2. AI now drives 1 in 5 venture deals

The influence of AI on venture capital continues to grow, with AI companies now capturing 20% of all venture deals globally — a new high, and up 2x since OpenAI’s launch of ChatGPT in 2022. 

In absolute numbers, AI companies secured 1,134 deals in Q1’25 — a 7% decline from the previous quarter but still the fourth straight quarter with over 1,100 AI deals.

The composition of AI dealmaking is evolving. Early-stage deals (seed and Series A) made up 70% of all AI deals in Q1’25, down from 75% in full-year 2024. Correspondingly, late-stage deal share has increased from 6% to 9%, indicating market maturation as more AI companies progress to advanced funding stages.

The focus of AI dealmaking has also evolved. While infrastructure investments dominated the early AI boom, we’re now seeing greater emphasis on vertical solutions and application-layer platforms that address specific industry challenges. Notable exceptions exist in emerging categories like voice AI, where infrastructure still attracts significant investment.

Geographically, US-based AI companies secured 52% of global AI deals in Q1’25, while Asia and Europe grabbed 21% a piece.

Explore 15,000+ AI companies in the Expert Collection

3. Eight early-stage AI companies raise $100M+ mega-rounds

Q1’25 set a new record with 8 early-stage AI companies raising rounds of $100M or more. These 8 companies raised a combined $1.8B — with an average round size of $222M — highlighting investors’ willingness to place substantial bets on AI startups earlier than ever.

The companies represent a diverse range of AI applications:

• Isomorphic Laboratories: $600M for AI drug discovery, spun out of DeepMind
• Apptronik: $403M for humanoid robots
• Lila Sciences: $200M for scientific research automation
• The Bot Company: $150M for household robots
• Endless: $110M for AI-led Web3 developer tools
• Nexthop: $110M for cloud-native AI infrastructure
• Reflection AI: $105M for coding AI agents
• MainFunc: $100M for an agentic search engine

What unites these companies is their focus on specific industry or technical challenges — not general-purpose AI models. This same trend appears among late-stage players that raised deals in Q1’25, with companies emphasizing enterprise applications, vertical use cases, and infrastructure optimization. 

The shift from infrastructure to applications also plays out at the tech market level. Among the 1,400+ tech markets that CB Insights tracks, those in the below chart saw the greatest number of AI deals in Q1’25. 

While LLM developers remain the top target for deals, they saw no growth in Q1’25 vs. Q1’24. On the other hand, vertical applications in industrials and healthcare — where AI is measurably improving automation — led in terms of YoY growth.

The top three vertical markets for AI deal growth in Q1’25 were automated guided vehicles (AGVs) and autonomous mobile robots (AMRs), radiology diagnostics — particularly those focused on multiple imaging modalities — and clinical documentation solutions.

See how markets stack up in the CBI Market Index

4. Early-stage deal sizes pace at an all-time high

The median early-stage deal size reached $2.7M in Q1’25, up from $2M in full-year 2024 — a 35% increase. This jump reflects both investors’ willingness to place larger bets on promising teams and the increased capital requirements for competitive AI development.

The increase is particularly notable against a backdrop of declining deal volume — investors are concentrating resources on fewer, more promising opportunities rather than spreading capital across a wide range of startups.

This environment creates both opportunities and challenges for founders. Well-positioned early-stage companies can secure larger initial rounds, but expectations for progress and growth are similarly elevated. The bar for follow-on funding will be higher for mid-stage rounds.

5. Billion-dollar M&A exits hit a new quarterly record

Q1’25 set a new record for billion-dollar M&A activity, with 12 VC-backed exits exceeding $1B in value, surpassing the previous high of 11 seen in both Q1’00 (dot-com bubble) and Q4’20 (peak ZIRP era). These 12 transactions had a combined value of $56B, driven primarily by Google‘s landmark acquisition of cloud security company Wiz.

The Wiz deal now stands as the most valuable M&A deal ever for a VC-backed private company, exceeding Meta‘s WhatsApp acquisition by more than $10B. It also marks Google’s largest acquisition to date — more than double the size of its Motorola Mobility purchase in 2012 — and sets a new record for cybersecurity exits, eclipsing Salesforce’s $28B acquisition of Splunk.

The Wiz deal highlights the growing focus among big tech companies on AI-driven cloud security as enterprises prioritize securing their expanding digital footprints. 

It’s also part of a broader trend of high-profile unicorn exits that includes both IPOs (CoreWeave) and M&A transactions (Moveworks, Weights & Biases). 

In fact, looking back to 2024, billion-dollar IPOs delivered strong returns — averaging a 97% increase in market cap post-listing. This bodes well for other IPO hopefuls looking to brave the public markets in the coming months.

Predictions for venture dealmaking in 2025

Below, we use signals from public-company earnings calls, startup financing trends, and business relationships to predict which trends will dominate venture activity through the rest of 2025.

AI agents “niche down” and gain enterprise buy-in

AI agents are transitioning from concept to commercial application. They’ve become a frequent topic on corporate earnings calls, and according to a December 2024 CB Insights survey, 63% of organizations said they are placing significant importance on AI agents over the next 12 months. All respondents reported at least experimenting with agents.

These LLM-based systems represent an evolution beyond copilots. They can autonomously handle complex tasks — from sales prospecting to compliance decision-making — with limited human input. The market is expanding rapidly, with CB Insights data showing that over half of companies in the space were founded since 2023.

Investor interest is surging in parallel. AI agent startups saw more than 200 equity deals in 2024 — and activity is pacing toward similar levels this year.

Key investment themes emerging in the space include:

• Specialized agents for specific business functions (sales, legal, finance)
• Agent orchestration platforms that manage multiple agentic systems
• Safety and alignment tools for ensuring agent behaviors match human intentions
• Enterprise-grade agents with robust permissions and security frameworks

As agents become more capable and trustworthy, adoption will accelerate across industries.

Read more from our AI agent coverage:

• What’s next for AI agents? 4 trends to watch in 2025
• The AI agent market map

CBI customers: Track 250+ AI agent companies

Voice AI takes off amid technical advances

Voice AI is undergoing a technical transformation as models shift toward processing audio directly — bypassing the text intermediation stage — and approaching human-like conversation latency of under 300ms.

This technical progress has fueled substantial investment, with voice AI solutions raising $2.1B in 2024 and nearly $500M in Q1’25. 

One standout is ElevenLabs, which reached $100M in ARR just 3 years after its founding and raised a $180M round in January from investors including a16z, Salesforce Ventures, and Sequoia Capital.

Despite these promising signals, the voice AI market remains in early development. CB Insights data shows approximately 85% of companies in the space are at levels 1-3 on the Commercial Maturity scale. Nearly half are developing or validating their products, while 39% have just begun commercial distribution.

As voice interfaces become more natural and capable, we expect to see investment opportunities emerge in several areas:

• Domain-specific voice applications for industries like healthcare and legal
• Voice AI trained on local languages not typically covered by general-purpose AI systems
• Voice-first UI/UX for both consumer and enterprise applications

Crypto & blockchain rebound

After weathering a prolonged crypto winter, blockchain technologies are experiencing renewed institutional interest. Funding to crypto/blockchain companies reached $6.6B in Q1’25, putting the space on track to surpass $20B in annual funding. Earnings call mentions have climbed accordingly. 

Several crypto companies now rank among the most likely IPO candidates, with platforms like Blockchain.com and Kraken showing IPO probabilities 64x higher than the average company tracked by CB Insights — a notable shift in public-market viability for the sector. 

Another trend to watch is the growing institutional and government focus on stablecoins, as regulators develop frameworks to incorporate these digital assets into the traditional financial system. 

Defense tech comes into focus

Military technology is entering a new era as investment shifts toward autonomous systems and AI-driven capabilities.

According to former Joint Chiefs of Staff Chairman General Mark Milley, smart machines and robotics could account for one-third of the US military presence within the next 15 years.

Funding to AI defense tech startups has already reached $1.5B this year — leading to a projected $6B by year-end. Last quarter saw earnings call discussion of defense reach an all-time high.

Much of this activity centers on multidomain operations (MDO) technologies — integrating systems across land, sea, air, space, and cyber — where AI is accelerating mission planning, threat detection, and battlefield connectivity. Major defense contractors are forming partnerships with AI startups to enhance battlefield management systems, mission planning capabilities, and integrated defense connectivity platforms.

As geopolitical tensions persist, defense tech investment is likely to continue growing, with particular focus on autonomous systems, AI-enhanced battlefield analytics, and advanced cybersecurity solutions for critical infrastructure.

See 240+ AI defense companies in this market map

Conclusion

The venture capital landscape in Q1’25 reflects key contrasts: record funding alongside declining deal count, significant early-stage deals vs. heightened expectations for follow-on capital, and a resurgence in billion-dollar exits despite broader market caution.

AI continues to influence capital allocation decisions across the venture ecosystem, but we’re seeing a shift from general infrastructure investments to specialized vertical applications and industry-specific solutions. Meanwhile, sectors beyond AI are showing resilience, with fintech, digital health, and retail tech all posting quarterly funding increases.

For investors, the data suggests maintaining a disciplined approach to AI investments while remaining alert to opportunities in adjacent sectors. The companies that successfully blend AI capabilities with sustainable business models will emerge as the defining ventures of this era.

For more insights on venture trends and emerging technologies, explore our related resources:

• The AI agent market map
• 7 tech M&A predictions for 2025
• State of AI Report: 6 trends shaping the landscape in 2025
• 15 tech trends to watch closely in 2025

For information on reprint rights or other inquiries, please contact reprints@cbinsights.com.

The post State of Venture Q1’25 Report appeared first on CB Insights Research.

After divesting its logistics business in 2023, the company refocused on its core strength: powering commerce infrastructure. Since then, Shopify has accelerated its growth through targeted partnerships, acquisitions, and product development — growing its share of the US e-commerce market from 10% to 12% and boosting revenue by 26% in FY2024. 

Now, Shopify is primed to take on new challenges. From enabling immersive shopping experiences to onboarding enterprise clients and monetizing its data through advertising, the company is laying the foundation for a more ambitious role in global commerce.

Drawing on CB Insights data across investments, acquisitions, integrations, and earnings transcripts, we identify 3 key areas that reveal where Shopify is heading next:

• Powering immersive and unified shopping experiences: Shopify’s relationships with gaming, payments, and agentic commerce players will enable always-on, cross-platform shopping — with Shopify infrastructure at the ecosystem’s core.   
• Becoming the go-to enterprise commerce platform: Through system integrator partnerships, composable solutions like Commerce Components, and unbundled tools like Shop Pay, Shopify is positioning itself as a modular alternative to Salesforce and Adobe.
• Turning customer data into new ad revenue streams: With proprietary tools like Shopify Audiences and new integrations with CDPs and campaign platforms, Shopify is laying the groundwork for a retail media network — creating new ways to monetize merchant and shopper data at scale.

In the graphic below, we show where Shopify has already built momentum across its three strategic pillars — and where we think it’s heading next, including our predictions on future partners and acquisitions.

These priorities signal how the e-commerce giant could reshape buying experiences and challenge established players across advertising, enterprise software, and commerce infrastructure.

We dive into each prediction below. 

1. Powering immersive and unified shopping experiences.

Shopify’s growing US e-commerce share reflects a deliberate strategy to embed commerce capabilities into more contexts. Its integrations with platforms like Roblox and Perplexity AI suggest a vision of always-on, channel-agnostic shopping where Shopify is the core infrastructure across both traditional and emerging environments.

Enabling shopping at any time, on any platform

In late 2024, Shopify took a step into the world of agentic commerce by integrating with Perplexity’s new AI shopper, Buy with Pro. This has enabled consumers to browse and transact directly via Shop Pay within Perplexity’s interface. 

Around the same time, it became Roblox’s first commerce integration partner, giving Shopify merchants access to 80M+ daily users through in-game storefronts powered by Shopify Checkout.

Source: CB Insights — Shopify Q3’24 earnings call

To that end, Shopify is expanding the functionality of its own products. For example, in 2024, it introduced “tap to pay” for its Point of Sale (POS) app and introduced offline payment capabilities, reinforcing its commitment to connecting online and physical experiences. Its integration with loyalty platform Gatsby enables merchants to engage customers across both environments.

Meanwhile, its partnership with India-based Cashfree Payments — enabling local on-site card processing — is part of a broader effort to tap into local economies through regional POS providers.

Using CB Insights’ Mosaic score, which measures business momentum, we sorted early- and mid-stage POS companies in a few key markets (EU and APAC) where Shopify could expand. Focusing on companies that serve retailers, we surfaced these 3 potential partners:

• Flatpay (Mosaic: 783) is a Danish company offering simplified payment processing solutions for small and medium-sized businesses. 
• Teya (Mosaic: 758), based in London, provides payment processing and financial services for small and medium-sized businesses across Europe. 
• Dtcpay (Mosaic: 735) is a Singapore-based digital payment platform. Its solution includes multi-currency swaps to convert fiat and stablecoins. 

Get the full list of potential partners in the EU and APAC

2. Becoming the go-to enterprise commerce platform.

Shopify has built the foundation to move beyond its traditional small-business customer base and compete directly with enterprise commerce platforms like Salesforce Commerce Cloud and Adobe Commerce. The company is positioning itself as a modular, flexible infrastructure layer — designed to meet the needs of large, complex merchants.

Partnerships with migration solutions clear a big hurdle

One of the biggest barriers for enterprise merchants is the complexity of migrating from legacy platforms. To address this, Shopify has steadily expanded its network of system integrators (SIs) since 2022, forming partnerships with Deloitte, EY, and KPMG to streamline onboarding and implementation.

Source: CB Insights — Shopify Q3’23 earnings call

In April 2024, Shopify deepened this strategy with a joint partnership alongside Google Cloud and Cognizant to offer end-to-end digital commerce solutions. These alliances signal Shopify’s increasing traction among enterprise IT buyers — and the company’s evolving go-to-market motion.

Shopify has also added specialized migration and enablement partners to its app store. In August 2024, it onboarded Pivotree, a digital commerce design firm, and in January 2025, expanded its relationship with Anatta to support enterprise migration needs.

Streamlining checkout and payments for large merchants

Simplifying payment workflows remains a core part of Shopify’s enterprise pitch. Its a la carte checkout solution, Shop Pay, is now offered independently and has been adopted by large brands like Coach. Shopify has layered on key partnerships to support broader payment functionality:

• In June 2023, it partnered with Adyen to enable more efficient processing for global enterprise merchants.
  
• In September 2024, it expanded its integration with PayPal, making it a card processor for Shopify and streamlining order management, reporting, and chargebacks.

Shopify has also supported crypto payments via its app store. In 2024, Solana Pay — powered by Helio (now owned by MoonPay) — added support for more tokens, loyalty programs, and stablecoin conversion, expanding Shopify’s optionality for cutting-edge payment rails.

The company is also offering other point solutions to serve enterprise merchants’ needs. In October 2024, it partnered with AI search company Coveo to offer tools for AI-driven product discovery, personalized recommendations, and more, focusing on more prominent retailers.

Learn more about companies using generative AI in e-commerce

Its integrations with tax technology leaders Vertex and Avalara further support its enterprise expansion, enabling complex compliance for cross-border transactions.

Source: CB Insights — Shopify business relationship insights

The tax compliance software market offers Shopify more potential tax compliance partners as it expands its reach with enterprise customers. Using the market’s ESP, which identifies and ranks leading private companies in a given technology landscape, we can highlight challenger companies on the rise that could be valuable relationships for Shopify:

• Sovos provides global tax compliance and regulatory reporting software solutions. 
• Exactera offers AI-powered tax compliance solutions for transfer pricing, income tax provision, and R&D tax credits.
• Neo.Tax also builds AI-powered tax automation software for startups and small businesses.

These moves underscore Shopify’s shift toward a composable, enterprise-grade stack — built to compete with legacy vendors by offering faster implementation, flexible tooling, and global readiness.

3. Shopify will use its reach and first-party data to power advertising for its merchants.

Shopify has long equipped its merchants with tools for personalization and customer acquisition. But its recent product upgrades and tech partnerships point to a broader ambition: turning its vast merchant network and rich first-party data into a full-fledged advertising business.

The activity hints at Shopify building its own version of a retail media network—one that could allow the company to sell ad space to merchants and outside brands, putting it in competition with advertising leaders like Amazon, Google, and Walmart.

To start, Shopify has expanded access to 2 of its own ad-focused products:

• The newest iteration (v2.4) of its customer acquisition tool, Shopify Audiences, launched in June 2024, helps merchants target narrower customer groups and maximize ad performance across networks and platforms. Some merchants have seen CAC reductions of up to 50%. 
• In December 2024, the company made its advertising tool, Shop Campaigns, available to all merchants in the US and Canada. Previously, only higher-tier Shopify Plus merchants could use the product. 

But Shopify’s leadership sees potential in advertising for Shopify beyond its proprietary products:

Source: CB Insights — Shopify Q1’24 earnings call

To unify and activate customer data, Shopify has partnered with third-party platforms that aggregate behavioral and transactional insights:

• In October 2024, Blueshift made its solution available on the Shopify app store. Its tools include a customer data platform, automated decision-making for recommendations, and a cross-channel marketing platform.
• Also in October 2024, Trellis announced an integration with Shopify. The relationship integrates shopper data into Amazon Marketing Cloud, connecting shopper insights across platforms to more effectively target messaging. 

Looking ahead, Shopify may deepen its capabilities in data orchestration by offering its own customer data platform (CDP) or data clean room solution. We ranked the companies in the CDP market by their M&A probability and Mosaic score (600+) to isolate potential M&A targets for Shopify:

• Optimove leverages AI to orchestrate personalized multichannel campaigns for B2C companies.
• Simon specializes in personalization and customer journey orchestration for retail, travel, and subscription businesses. 
• Hightouch is a composable customer data platform specializing in data activation and reverse ETL services.

Shopify is also building new demand channels for merchants. In 2024, it partnered with Mirakl to enable third-party marketplace creation and with Target to feature Shopify merchant products on the retailer’s digital shelves.

These moves suggest Shopify is building more than merchant tools — it’s assembling a vertically integrated commerce and media stack that could challenge the dominance of legacy ad platforms and redefine how brands connect with shoppers.

Research: How generative AI could supercharge retailers’ ad networks

RELATED RESEARCH FROM CB INSIGHTS:

• The future of the customer journey: AI agents take control of the buying process
• How generative AI could supercharge retailers’ ad networks
• 7 tech M&A predictions for 2025
• Interviews with Shopify customers

The post Shopify’s next move: How the e-commerce giant is evolving into a full-stack platform for commerce and media appeared first on CB Insights Research.

While AI copilots have already made inroads across industries, the next evolution — autonomous agents with greater decision-making scope — is arriving quickly. AI agent startups raised $3.8B in 2024 (nearly tripling 2023’s total), and every big tech player is already developing AI agents or offering the tooling for them.

Implications for enterprises will be far-reaching, from altering workforce composition (with new hybrid teams of humans and AI agents) to maximizing operational efficiency through full automation of routine tasks. 

Below we identify 170+ promising startups developing AI agent infrastructure and applications. 

CBI customers: Track 250+ AI agent companies

We selected companies for inclusion based on Mosaic health scores (500+) and/or funding recency (since 2022). We included private companies only and organized them according to their primary focus. This market map is not exhaustive of the space.

Want to be considered for future AI agent research? Brief our analysts to ensure we have the most up-to-date data on your company. 

Outlook on AI agents

Fully autonomous agents remain limited due to issues pertaining to reliability, reasoning, and access. Most agent applications today operate with “guardrails” — within a constrained architecture where, for example, the LLM-based system follows a decision tree to complete tasks. 

Agents featured on this map include some combination of the following components: 

• Reasoning: Foundation models that enable complex reasoning, language understanding, and decision-making. These models evaluate information and form the cognitive core of the agent.
• Memory: Systems that store, organize, and retrieve both short-term contextual information and long-term knowledge.
• Tool use: Integration capabilities that allow agents to interact with external applications, APIs, databases, the internet, and other software. 
• Planning: The agent’s architecture for breaking down complex tasks into more manageable steps, reflecting on performance, and adapting as necessary.  

We expect more startups to move up the scale of autonomy as AI capabilities advance. Improvements in reasoning and memory will enable more sophisticated decision-making, adaptability, and task execution.

For example, in September 2024, legal AI startup Harvey announced that OpenAI’s o1 reasoning model, supplemented with domain-specific knowledge and data, was enabling it to build legal agents. The company, which raised $300M at a $3B valuation in February 2025, has doubled its sales force in the last 6 months, indicating rising market demand.

While the above market map highlights the private landscape (with a focus on enterprise applications), tech giants and incumbents are also launching agents. We predict big tech and leading LLM developers will own general-purpose AI agents, but there are many opportunities for smaller, specialized players. 

Looking ahead, watch for new form factors outside of the copilot/chatbot interface that will push the boundaries of what an “agent” is. Early indications of this include “AI-native” workspaces — tools and platforms built from the ground up around AI capabilities, rather than layering AI features on top of a traditional product. For instance:

• Eve’s legal platform aims to automate aspects of the whole case lifecycle (from case intake to drafting). 
• Hebbia’s Matrix product builds spreadsheets that mine information from files (in rows) and deliver answers to questions (in columns), proactively discovering, organizing, and surfacing data.
• With its Dia product, The Browser Company is exploring web browsing interfaces that can summarize content, automate repetitive web tasks, and even anticipate next actions.

Category overview

AI agent infrastructure

This segment covers companies building agent-specific infrastructure. (We excluded general genAI infrastructure markets like foundation models and vector databases from the map.)

Development tools

A diverse ecosystem of tools has emerged to support agents’ development. These range from memory frameworks like Letta that enable persistent, retrievable memory across interactions; to tools that allow agents to take action via integration (e.g., Composio), authentication (e.g., Anon), and browser automation (e.g., Browserbase).

Another set of companies is giving agents more utility across payments (which includes companies developing crypto wallets for agents as well as virtual cards) and voice (development platforms and tools for testing AI voice applications as well as speech models).

Meanwhile, demand for simplified, comprehensive deployment options is driving the rise of AI agent development platforms — the most crowded infrastructure market on our map. 

LLM developers including Cohere (with its North AI workspace) and Mistral have launched their own agent development frameworks, while Amazon, Microsoft, Google, and Nvidia all offer AI agent development tooling. With many enterprises favoring established vendors due to lower risk, big tech companies have significant advantages here.

Trust & performance

Concerns around reliability and security have helped establish a market for agent evaluation & observability tools. Early-stage companies are targeting applications such as automated testing (e.g., Haize Labs) and performance tracking (e.g., Langfuse). 

Multi-agent systems, where specialized sub-agents work together to complete tasks, also show promise in improving accuracy. Insight Partners-backed CrewAI’s multi-agent orchestration platform is reportedly already used by 40% of the Fortune 500. 

Vendors are also tackling reliability concerns directly. Based on our briefings with 20+ AI agent startups in Q1’25, companies are using 5 primary methods to build user trust: 

1. Transparency
2. Human oversight
3. Technical safeguards
4. Security & compliance
5. Continuous improvement 

Horizontal applications & job functions

Horizontal AI agent startups make up nearly half of the map and overall landscape. 

This segment primarily features startups targeting enterprises, with industry-agnostic applications across job functions like HR/recruiting, marketing, and security operations. Companies in the productivity & personal assistants market, including OpenAI with its Operator agent, are targeting consumers and employees directly.  

The AI agent markets with the most traction — based on companies’ median Mosaic health scores — are customer service and software development (which includes coding and code review & testing agents). These markets are also among the most crowded due to the value agents bring to well-defined workflows and testable environments. 

We see this reflected in adoption, particularly at the customer service layer: Among 64 organizations surveyed by CB Insights in December 2024, two-thirds indicated they are using or will be using AI agents in customer support in the next 12 months. 

Overall, horizontal AI agent applications are more commercially mature compared to the infrastructure and vertical segments, with over two-thirds of the market deploying or scaling their solutions based on CBI Commercial Maturity scores. 

Vertical (industry-specific) applications

We expect increasing verticalization as startups carve out niches by solving industry-specific customer problems, especially in areas with strict regulatory scrutiny and data sensitivity.

This category features companies catering to industries including: 

• Financial services & insurance: The most crowded vertical category on the map with 11 companies, startups here are targeting a variety of finserv workflows such as financial research (Boosted.ai and Wokelo), insurance sales & support (Alltius and Indemn), and wealth advisory prospecting & operations (Finny AI and Powder). 
• Healthcare: Solutions in this market aim to reduce the volume of manual tasks for healthcare professionals across use cases like clinical documentation, revenue cycle operations, call centers, and virtual triage. Solutions from companies like Thoughtful AI (revenue cycle operations) and Hippocratic AI (staffing marketplace) are targeting end-to-end healthcare workflows. 
• Industrials: These companies look to optimize processes and equipment — including control systems, robots, and other industrial machines — without relying on consistent human intervention. For example, Composabl launched an agent platform in May 2024 that uses LLMs to create skills and goals for agents that can control industrial equipment. Public companies like Palantir are also active in this space. Learn more in our industrial AI agents & copilots market map. 

RELATED RESEARCH

• What’s next for AI agents? 4 trends to watch in 2025
• The enterprise AI agents & copilots market map
• The Multi-Agent AI Outlook
• Future of the workforce: How AI agents will transform enterprise workflows

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AI chatbots saw a record 427M app downloads last quarter — up 42% vs. Q3.

Now Meta wants in on the action. 

The tech giant reportedly plans to spin Meta AI into a standalone app to compete with ChatGPT, Google’s Gemini, Perplexity, and other chatbot apps.

ChatGPT is still king with nearly a quarter of AI chatbot app downloads in 2024 and 400M weekly active users across platforms (not just mobile).

But Meta has a massive in-built user base, including ~700M people who already interact with Meta AI features each month across apps like Facebook and Instagram.

The battle for attention is on.

Source: X

One of the differentiators for social AI applications will be emotional intelligence — an area where OpenAI’s latest model, GPT-4.5, shows promise. 

While many headlines have focused on the model’s eye-watering costs, one notable advance is its reported ability to interact with greater empathy (an area where Anthropic’s Claude has so far been superior).

This matters because the more natural AI sounds, the easier it will be for consumers to see it fitting into their lives.

It also makes AI even more formidable in both personal and business settings if the AI can be both higher IQ and EQ than most of us pesky ol’ humans.

Businesses are catching on: More public cos are citing AI as a “friend” or “companion” on earnings calls in an effort to make B2C services more personal.

Mercedes-Benz, for instance, envisions drivers chatting with its MBUX voice assistant (which is built on ChatGPT) like a friend.

Source: CB Insights — Mercedes-Benz Q4’24 earnings call

Beyond emotional connection, AI developers are also making their chatbots more useful through agentic capabilities. This dual focus on both feeling and function will shape the competitive landscape moving forward.

While still constrained by reliability and access issues, web-browsing agents like OpenAI’s Operator signal a future where humans interact regularly with AI agents that take actions on their behalf.

Already nearly every tech giant, plus leading LLM developers like OpenAI and Anthropic, have developed AI agents or are building out tools for others to develop them.

In a head-to-head matchup, OpenAI and Meta would bring distinct sets of advantages.

OpenAI has already built user habits with ChatGPT and is now layering agent capabilities on top. Meta must convince users its AI offering brings something meaningfully different.

But Meta’s experience in the social realm, combined with its existing algorithms, could give it an edge in creating AI that feels like it belongs in human conversations.

Watch for both companies to rapidly iterate on their consumer agent offerings in the coming months.

Related AI research from CB Insights:

• What’s next for AI agents? 4 trends to watch in 2025
• The future of the customer journey: AI agents take control of the buying process
• The foundation model divide: Mapping the future of open vs. closed AI development
• State of AI Report: 6 trends shaping the landscape in 2025

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Imagine: your personal AI agent notifies you that a hair dryer you’ve been eyeing is now on sale. The product page highlights benefits tailored to your curly hair, while the agent confirms it will arrive before your upcoming trip.

With your approval, the agent handles the purchase through your secure wallet. Later, it proactively suggests complementary hair care products for the summer season.

This world of autonomous commerce isn’t as far off as it seems. Tech and e-commerce leaders — including OpenAI, Nvidia, Amazon, Walmart, Google, and Apple — are already building AI systems that are steps away from conducting transactions. 

AI agents will impact each stage of the customer journey, streamlining the path to purchase and fundamentally transforming how businesses build relationships with consumers and drive loyalty.

We use CB Insights data on early-stage fundraising, public companies, and industry partnerships to analyze how generative AI — especially AI agents — is transforming the customer journey.

In the 11-page report, we cover 3 predictions that emerged from our analysis: 

1. First-party transaction data will shape the future of AI-driven personalization. As personalization becomes more sophisticated at the awareness and consideration stages, companies with direct access to first-party data will have an edge.
2. Direct-to-agent (D2A) commerce will kill traditional loyalty. With AI agents handling browsing and shopping, traditional loyalty programs will lose effectiveness as agents optimize shopping across a select group of merchants.
3. A few AI agents will own the customer relationship. Companies like Amazon, Google, and Apple — with critical distribution and financial services infrastructure — are well-positioned in commerce.

RELATED RESEARCH FROM CB INSIGHTS

• How generative AI could supercharge retailers’ ad networks
• AI is revitalizing the “virtual try-on” space — this is what’s coming next, including interactive Google ads
• The enterprise AI agents & copilots market map
• 15 tech trends to watch closely in 2025
• Generative AI — e-commerce search
• AI-optimized e-commerce UX
• Generative AI — customer support operations

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Rather than full automation, the industry is embracing a more nuanced approach where technology augments human capabilities, creating hybrid workplaces where workers are upskilled to work alongside and manage robotic systems. 

Today’s modular and scalable automation solutions enable incremental modernization, allowing logistics providers to start small, prove ROI, and gradually expand their automated operations while maintaining market adaptability. 

Want to see more research? Join a demo of the CB Insights platform.

If you’re already a customer, log in here.

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However, global CVC deal count dropped to its lowest level since 2018 as CVCs become more selective.

Download the full report to access comprehensive data and charts on the evolving state of CVC across sectors, geographies, and more.

Key takeaways from the report include:

• CVC-backed funding grows, deal activity slows. Global CVC-backed funding increased 20% YoY to $65.9B, but deal count fell to 3,434, the lowest level since 2018. All major regions saw deal volume declines, with Europe dropping the most at 10% YoY.
• CVCs are all in on AI. AI startups captured 37% of CVC-backed funding and 21% of deals in 2024 — both record highs. Counter to the broader decline in deals, CVCs ratcheted up AI dealmaking by 13% YoY as they race to secure footholds in the space before competitors gain an insurmountable edge.
• The flight to quality continues. Among deals with CVC participation, the annual average deal size hit $27.3M in 2024, tied for the second highest ever. Amid fewer deals, CVCs are increasingly aggressive when they do decide to invest.
• Early-stage deals dominate. Early-stage rounds comprised 65% of 2024 CVC-backed deals, tied for the highest share in over a decade. Biotech startups made up half of the top 20 early-stage deals.
• CVC-backed funding plummets in Asia. In 2024, Asia’s CVC-backed funding dropped 34% YoY to $7B — the lowest level since 2016. China is leading the decline, with no quarter in 2024 exceeding $0.5B in funding. CVCs remain wary of investing in the country’s private sector.

We dive into the trends below.

CVC-backed funding grows, deal activity slows

Global CVC-backed funding reached $65.9B, a 20% YoY increase. The US was the main driver, increasing 39% YoY to $42.8B. Europe also saw CVC-backed funding grow 18% to $12.3B, while Asia declined 34% to $7B.

$100M+ mega-rounds also contributed to the rise, ticking up 21% YoY to 141 deals worth over $32B in funding.

Meanwhile, deal count continued its decline, as both annual (3,434 in 2024) and quarterly (806 in Q4’24) totals reached their lowest levels in 6 years.

Annual deal volume fell by at least 6% YoY across each major region — the US, Asia, and Europe — with Europe experiencing the largest decline at 10%.

However, Japan-based CVC deal volume remains near peak levels, suggesting a more resilient CVC culture compared to other nations. Two of the three most active CVCs in Q4’24 are based in Japan: Mitsubishi UFJ Capital (21 company investments) and SMBC Venture Capital (15).

Track recent activity from 1,000+ CVCs

CVCs are all in on AI

AI is driving CVC investment activity, much like the broader venture landscape. In 2024, AI startups captured 37% of CVC-backed funding and 21% of deals, both record highs.

In Q4’24, the biggest CVC-backed rounds went primarily to AI companies. These include:

• AI search startup Perplexity’s $500M Series C, backed by Nvidia’s NVentures 
• Coding AI copilot Poolside’s $500M Series B, backed by the venture arms for Citigroup, HSBC, Capital One, LG, eBay, and Nvidia
• AI computing processor developer Lightmatter’s $400M Series D, backed by GV

CVCs are also investing in the energy companies powering the AI boom, such as Intersect Power, which raised the largest round at $800M (backed by GV).

Expect the trend to continue into 2025, as emerging AI markets mature further, such as AI agents & copilots for enterprise and industrial use cases; AI solutions for e-commerce, finance, and defense; and the computing hardware necessary to power these technologies.

The flight to quality continues

In 2024, the annual average deal size with CVC participation reached $27.3M, a 34% YoY increase and tied for the second highest level on record, exceeded only by the low-interest-rate environment of 2021.​

Median deal size also increased, though only by 8% to $8.6M.

Even though the number of CVC-backed deals declined in 2024, the increase in average annual deal size reflects a focus on companies with strong growth prospects. CVCs are prioritizing quality and committing more funds to a select group of high-potential investments.

Early-stage deals dominate

Early-stage rounds (seed/angel and Series A) made up 65% of CVC-backed deals in 2024, tied for the highest recorded level in more than a decade.​

In Q4’24, biotech companies were the early-stage fundraising leaders, accounting for 10 of the 20 largest early-stage deals. Biotech players City Therapeutics, Axonis, and Trace Neuroscience all raised $100M+ Series A rounds, with City Therapeutics and Axonis notably receiving investment from the venture arms of Regeneron and Merck, respectively.

Among all early-stage CVC-backed companies, the largest round went to Physical Intelligence, a startup focused on using AI to improve robots and other devices. Physical Intelligence raised a $400M Series A with investment from OpenAI Startup Fund.

Explore CVCs’ top early-stage company targets in Q4

CVC-backed funding plummets in Asia

Asia’s CVC-backed funding continued its downward trend in 2024, decreasing 34% YoY to $7B.

China was the main driver, with CVC-backed funding coming in at $0.5B or less every quarter in 2024.​ CVCs remain wary of investing in startups in the nation, which faces a variety of economic challenges, including a prolonged real estate slump, cautious consumer spending, strained government finances, and weakened private sector activity amid policy crackdowns.

In Japan, on the other hand, CVC activity remains robust. In 2024, funding with CVC participation ($1.7B) remained on par with the year prior, while deals (502) actually increased by 11%.

MORE VENTURE RESEARCH FROM CB INSIGHTS

• State of Venture 2024 Report
• State of Fintech 2024 Report
• State of Digital Health 2024 Report

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Venture funding surged past the $100B mark for the first time as AI infrastructure players pulled in billion-dollar investments. A wave of M&A deals and rapidly scaling AI unicorns further underscored the tech’s momentum.

Download the full report to access comprehensive data and charts on the evolving state of AI across exits, top investors, geographies, and more.

Key takeaways include: 

• Massive deals drive AI funding boom. AI funding hit a record $100.4B in 2024, with mega-rounds accounting for the largest share of funding we’ve tracked to date (69%) — reflecting the high costs of AI development. Quarterly funding surged to $43.8B in Q4’24, driven by billion-dollar investments in model and infrastructure players. At the same time, nearly 3 in 4 AI deals (74%) remain early-stage as investors look to get in on the ground floor of the AI opportunity. 
• Industry tech sectors lose ground in AI deals. Vertical tech areas like fintech, digital health, and retail tech are securing a smaller percentage of overall AI deals (declining from a collective 38% in 2019 to 24% in 2024). The data suggests that companies focused on infrastructure and horizontal AI applications are drawing greater investor interest amid generative AI’s rise.
• Outside of the US, Europe fields high-potential AI startup regions. While the US dominated AI funding (76%) and deals (49%) in 2024, countries in Europe show strong potential in AI development based on CB Insights Mosaic startup health scores. Israel leads with the highest median Mosaic score (700) among AI companies raising funding. 
• AI M&A activity maintains momentum. The AI acquisition wave remained strong in 2024, with 384 exits nearly matching 2023’s record of 397. Europe-based startups represented over a third of M&A activity, cementing a 4-year streak of rising acquisitions among the region’s startups. 
• AI startups race to $1B+ valuations despite early market maturity. The 32 new AI unicorns in 2024 represented nearly half of all new unicorns. However, AI unicorns haven’t built as robust of a commercial network as non-AI unicorns, per CB Insights Commercial Maturity scores, indicating their valuations are based more on potential than proven business models at this stage.
• Tech leaders embed themselves deeper in the AI ecosystem. Major tech companies and chipmakers led corporate VC activity in AI during Q4’24, with Google (GV), Nvidia (NVentures), Qualcomm (Qualcomm Ventures), and Microsoft (M12) being the most active investors. This reflects the strategic importance of securing access to promising startups while providing them with essential technical infrastructure.

We dive into the trends below.

For more on key shifts in the AI landscape in 2025, check out this report on the implications of DeepSeek’s rise.

Massive deals drive AI funding boom

Globally, private AI companies raised a record $100.4B in 2024. At the quarterly level, funding soared to a record $43.8B in Q4’24, or over 2.5x the prior quarter’s total. 

The funding increase is largely explained by a wave of massive deals: mega-rounds ($100M+ deals) accounted for 80% of Q4’24 dollars and 69% of AI funding in 2024 overall.

The year featured 13 $1B+ deals, the majority of which went to AI model and infrastructure players. OpenAI, xAI, and Anthropic raised 4 out of the 5 largest rounds in 2024 as they burned through cash to fund the development of frontier models. 

Overall, the concentration of funding in mega-rounds reflects the high costs of AI development across hardware, staffing, and energy needs — and widespread investor enthusiasm around the AI opportunity. 

But that opportunity isn’t limited to the largest players: nearly 3 in 4 AI deals (74%) were early-stage in 2024. The share of early-stage AI deals has trended upward since 2021 (67%) as investors look to ride the next major wave of value creation in tech.

CBI Customers: Track 15,000+ AI companies

Industry tech sectors lose ground in AI deals

Major tech sectors — fintech, digital health, and retail tech — are making up a smaller percentage of AI deals.

While the overall annual AI deal count has stayed steady above 4,000 since 2021, dealmaking in sectors like digital health and fintech has declined to multi-year lows. So, even as AI companies make up a greater share of the deals that do happen in these industries, the gains haven’t been enough to register in the broader AI landscape.

The data suggests that, amid generative AI’s ascendancy, AI companies targeting infrastructure and horizontal applications are drawing a greater share of deals. 

With billions of dollars flowing to the model/infra layer as well, investors appear to be betting that the economic benefits of the latest AI boom will accrue to the builders.  

Outside of the US, Europe fields high-potential AI startup regions

Although US-based companies captured 76% of AI funding in 2024, deal activity was more distributed across the globe. US AI startups accounted for 49% of deals, followed by Asia (23.2%) and Europe (22.9%). 

Comparing median CB Insights Mosaic scores (a measure of private tech company health and growth potential on a 0–1,000 scale) for AI companies that raised equity funding in 2024 highlights promising regional hubs. 

Explore 500+ high-potential AI startups

European countries dominate the top 10 countries by Mosaic score (outside of the US). Israel, which has a strong technical talent pool and established startup culture, leads the pack with a median Mosaic score of 700.

Overall activity on the continent is dominated by early-stage deals, which accounted for 81% of deals to Europe-based startups in 2024, a 7-year high.

The European Union indicated in November that scaling startups is a top priority, pointing to the importance of increased late-stage private investment in remaining competitive on the global stage.

AI M&A activity maintains momentum

The AI M&A wave is in full force, with 2024’s 384 exits nearly reaching the previous year’s record-high 397.

Acquisitions of Europe-based startups accounted for over a third of AI M&A activity in 2024. Among the global regions we track, Europe is the only one that has seen annual AI acquisitions climb for 4 consecutive years. Although the US did see a bigger uptick YoY (16%) in 2024, posting 188 deals. 

In Europe, UK-based AI startups led activity in 2024, with 32 M&A deals, followed by Germany (18), France (16), and Israel (12). 

Major US tech companies, including Nvidia, Advanced Micro Devices, and Salesforce, participated in some of the largest M&A deals of the year as they embedded AI across their offerings.

Search for recently funded AI companies with high M&A probabilities

AI startups race to $1B+ valuations despite early market maturity 

AI now dominates new unicorn creation. The 32 new AI unicorns in 2024 accounted for nearly half of all companies passing the $1B+ valuation threshold during the year. 

These AI startups are hitting unicorn status with much smaller teams and at much faster rates than non-AI startups: 203 vs. 414 employees at the median, and 2 years vs. 9 years at the median. 

CBI Customers: Dive into data on every unicorn

These trends reflect the current AI hype — investors are placing big early bets on AI potential. Many of these unicorns are still proving out sustainable revenue models. We can see this clearly in CB Insights Commercial Maturity scores. More than half of the AI unicorns born in 2024 are at the validating/deploying stages of development, while non-AI new unicorns mostly had to get to at least the scaling stage before earning their unicorn status.

Tech leaders embed themselves deeper in the AI ecosystem

In Q4’24, the top corporate VCs in AI (by number of companies backed) were led by a string of notable names: Google (GV), Nvidia (NVentures), Qualcomm (Qualcomm Ventures), and Microsoft (M12). 

As enterprises rush to harness AI’s potential, big tech, chipmakers, and other enterprise tech players are building their exposure to promising companies along the AI value chain.

Meanwhile, startups are linking up with these players to not only secure funding for capital-intensive AI development but also access critical cloud infrastructure and chips.

MORE AI RESEARCH FROM CB INSIGHTS

• What DeepSeek’s model releases mean for the future of AI
• Here’s how leading strategy teams are successfully driving generative AI adoption in their organizations
• The foundation model divide: Mapping the future of open vs. closed AI development
• 15 tech trends to watch closely in 2025
• Inside the AI drug discovery arms race: Record M&A activity, a biologics funding spree, and more
• The industrial AI agents & copilots market map

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But beyond the momentum building in AI, global deal activity plunged 19% YoY to its lowest level since 2016, creating both challenges and opportunities for investors and corporate strategists.

Download the full report to access comprehensive data and charts on the evolving state of venture across sectors, geographies, and more.

Key takeaways from the report include:

AI is eating VC. In 2024, AI represented 37% of venture funding and 17% of deals — both all-time highs. AI infrastructure players raised all of the top 5 venture deals of the year, with 4 closing in Q4’24 alone — driving a 2-year high in quarterly funding. With nearly 3 in 4 (74%) AI deals being early-stage in 2024, investors are staking out early claims to reap the rewards of the tech’s potential.

Aside from AI, venture dealmaking is in a drought. Globally, deal activity fell 19% YoY to 27K in 2024 — its lowest annual level since 2016. The drop was most pronounced in countries like China (-33% YoY), Canada (-27%), and Germany (-23%). However, several countries in Asia — Japan, India, and South Korea — have bucked the downward trend. Their resilience suggests attractive investment conditions.

AI and industrial automation are common themes among the fastest-growing tech markets. Out of 1,400+ tech markets that CB Insights tracks, those with the highest rate of YoY deal growth include enterprise AI agents, genAI for customer support, industrial humanoid robots, and autonomous driving systems. Expect these technologies to continue maturing in 2025, increasing their disruptive potential.

Despite market uncertainty, early-stage valuations hit a record-high median of $25M in 2024. Investors are packing into early-stage rounds to ride the next major wave of value creation in tech, likely drawn by startups’ ability to now build products with less capital and fewer people thanks to AI tools and infrastructure. However, early-stage startups could face a reality check when they try to raise later-stage rounds if they have yet to prove they can sustain growth. Although mid- and late-stage deal valuations rebounded slightly vs. 2023, they remain muted compared to 2021 and 2022.

IPO timelines get delayed. From first funding to IPO, VC-backed companies that went public in 2024 waited a median of 7.5 years — 2 years longer than in 2022. Amid unfavorable market conditions, some late-stage players like Stripe and Databricks have resorted to raising additional equity funding or selling private shares in lieu of going public. This allows them to create liquidity for early investors and employees when the path to a public debut is rocky.

We dive into each trend below.

AI is eating VC

The 5 largest deals of the year all went to AI model and infrastructure players (led by Databricks’ $10B Series J, followed by a $6.6B round for OpenAI, two $6B rounds for xAI, and a $4B round for Anthropic). But the activity isn’t limited to the largest, most well-resourced AI players. 

Across the board, AI companies are capturing a higher share of deal volume — nearly one in 5 deals (17%) now go to AI companies, almost triple the share from 2015 (6%). AI deal volume remained above 4,000 for the fourth year in a row. 

CBI customers: Track 15,000+ AI companies

The boom is providing tailwinds for every stage of the startup lifecycle, from early-stage companies — which take 3 out of 4 deals in AI — to startup exits. The AI M&A wave is in full force, with 2024’s 384 exits nearly rivaling the previous year’s record-high 397.

This trend will continue in 2025 as incumbents look to grab AI tech and talent and build end-to-end AI offerings. Get the full breakdown of what AI M&A means for corporate strategy in our Tech Trends 2025 report.

In Q4’24, the AI boom helped fuel a substantial rebound in global funding. The quarter’s funding tally reached $86.2B — a 2-year high, and an increase of 53% quarter-over-quarter (QoQ).

60% of that quarterly total, or $52B, came from mega-rounds (deals worth $100M+) — nearly tying Q1’21 (61%) for the highest share ever across venture. 

At the same time, quarterly deal volume steadily declined throughout 2024, including slipping below 6,000 in Q4’24 for the first time since 2016.

Aside from AI, venture dealmaking is in a drought

Despite AI’s surge, most venture sectors face their worst dealmaking drought in nearly a decade, forcing investors to adjust their strategies. Many investors are taking a more selective and risk-off approach right now as they wait out macroeconomic volatility and geopolitical tensions.

Among major dealmaking countries and regions (those seeing 500+ deals per year), the slump was most pronounced in China (-33% YoY drop in deals), Canada (-27%), and Germany (-23%). 

However, several countries in Asia bucked the trend and notched slim YoY gains: Japan (+2%), India (+1%), and South Korea (+1%). These countries have invested heavily in developing their startup ecosystems and may be benefiting indirectly from investors diverting funds away from China.

AI and industrial automation are common themes among the fastest-growing tech markets

AI and industrial automation are at the center of some of the fastest-growing markets in tech.

We filtered CB Insights’ 1,400+ tech markets for those with at least 20 equity deals over the last 2 years, then singled out those with the strongest deal growth YoY in 2024.

The enterprise tech and industrials sectors dominate, comprising 9 of the top 10 tech markets. Advancements in generative AI are fueling much of the activity in areas like humanoid robots and autonomous driving systems. Investors are also backing tech companies improving industrial processes like water treatment and purification, with deals to the market more than doubling YoY.

The enterprise tech and industrials sectors are also seeing a wave of hiring, as they lead in YoY headcount growth among all sectors. Industrials markets saw an average of 11% headcount growth last year, followed by enterprise tech markets with 10%. 

Financial services and the consumer & retail industries are noticeably absent from the top 10 fastest-growing markets. Given the tough venture landscape, emerging technologies in these areas face an uphill battle.

CBI Market Index: Compare 1,400+ markets

Early-stage deals are showing strength

Globally, early-stage dealmaking represents one of the most vibrant areas of venture right now, with median deal size and valuation reaching all-time highs in 2024.

The seed/angel and Series A stages remain resilient despite the broader downturn, in part because investors view them as a safe haven to ride out late-stage challenges like constricted exit opportunities and capital constraints. Deal sizes and valuations for the mid- and late stages rebounded slightly vs. 2023 but were muted when compared to the boom times of 2021 and 2022.

Corporate strategy and development teams seeking out early-stage opportunities can see 900+ high-potential startups here. To identify these players, we looked at the nearly 11,000 VC-backed startups that raised seed or Series A rounds in 2024, then filtered for those with the healthiest businesses (600+ Mosaic score) and strongest management teams (600+ Management Mosaic score).

Explore 900+ high-potential early-stage startups

IPO timelines get delayed

Most tech firms continue to shirk the IPO market. Some are still waiting for macroeconomic conditions to stabilize, while others prefer to focus on topline growth without having to deal with the financial scrutiny that comes with being a public company.

This is pushing back the timelines for IPO-ready companies even further. 

From first funding to IPO, VC-backed companies that went public in 2024 waited a median of 7.5 years — 2 years longer than in 2022.

While Q4’24 saw an uptick in global IPOs, activity remains down vs. historical levels. In the current climate, many late-stage startups will likely opt instead to raise more private funding to sustain operations and pay out employees or early investors.

Search for recently funded companies with high IPO probabilities

Related resources from CB Insights:

• Live briefing on venture trends for 2025
• All AI research from CBI
• 15 tech trends to watch closely in 2025
• Game Changers 2025: 9 technologies that will change the world
• $1B+ Market Map: The world’s 1,249 unicorn companies in one infographic

The post State of Venture 2024 Report appeared first on CB Insights Research.

But the overall slowdown only tells part of the story. Within this smaller pool of new billion-dollar companies, AI startups have come to dominate, comprising 44% of new unicorns this year — a 7x increase in share over the last decade.

Here’s what today’s unicorn landscape signals about the future of tech:

• AI dominates new unicorn creation — 2024 has seen 72 companies become unicorns, and 32 of these (44%) are AI startups. These AI players are reaching unicorn status far faster (median of 2 years) than non-AI companies (median of 9 years). As AI capabilities advance at a rapid pace — across domains from intelligent robotics to coding AI agents — corporations that delay AI adoption risk falling behind their competitors.
• Valuations are under pressure — Over one-third of the 1,200+ current unicorns haven’t raised funding since 2021, and over 100 of these companies were last valued at exactly $1B — meaning a down round would take their unicorn status away altogether. These represent potentially distressed assets that cash-rich incumbents and corporate development teams would want to snap up.
• Next in line for an exit — Among today’s unicorns, 110 stand out with IPO probabilities above 20% (anywhere from 31x to 64x that of the average company we track). Another 25 have equally high M&A probability scores, making them prime acquisition targets for incumbents looking to expand their tech and market reach.

Market map of billion-dollar startups

On paper, today’s unicorns are collectively worth over $4T. 

However, it’s unlikely that many of these 1,200+ companies are worth as much as their latest valuation, given how dramatically the venture landscape has changed since the heady days of 2021/22. Since then, tighter capital markets have applied downward pressure on public and private tech company valuations alike.

Over one-third of current unicorns haven’t raised a funding round since 2021. If they were to raise in today’s climate, they’d likely face a valuation cut. That includes over 100 unicorns that were last valued at exactly $1B — meaning any valuation reduction would strip them of their unicorn status.

CBI customers: Dive into data on every unicorn

With venture funding at its lowest level since 2016/17, unicorns in need of cash are likely considering an exit. Some have been waiting years for the IPO market to open up so they can access capital and compensate employees without further diluting their business. Others will need to accept sales at discounted prices.

Unicorns most likely to exit via IPO or M&A

Per CB Insights’ Exit Probability scores — which measure a company’s likelihood to exit in the next 2 years, based on 70+ data points — a select cohort of unicorns emerges as the most likely candidates for IPO and M&A. 

110 unicorns have a 20% or higher chance of IPO’ing in the next 2 years — anywhere from 31x to 64x the likelihood of the average company we track. Recent tech IPOs have performed well relative to the cold snap of 2022/23, particularly for companies benefiting from the AI boom. This will likely open the doors to other IPO hopefuls like Klarna, which is reportedly considering debuting as soon as H1’25.

A smaller segment of unicorns has an M&A exit probability of 20%+ (from 2x to 5x the average). This includes unicorns like AI data company Tresata (38% M&A probability) and fleet management & telematics provider Radius (33%), both of which have faced headcount reductions over the last year.

These acquisition targets could offer incumbents a way to quickly add new tech and talent as well as expand their customer base and market reach.

See the IPO and M&A probabilities for every unicorn

AI has become a unicorn factory

The current AI boom is a driving force behind new unicorn creation. 

In 2024 so far, 44% of new unicorns have been AI companies. This is by far the highest share that AI has seen over the past decade, representing over 7x growth during that time (from 6% in 2015).

What’s more, these AI startups are hitting unicorn status with 1) much smaller teams and 2) at much faster rates.

Among new unicorns in 2024, the median AI unicorn has just 203 employees and reached unicorn status in 2 years from its founding date. For comparison, the median non-AI company to become a unicorn did so with double the team size (414 employees) and a much longer life-span (9 years).

The size of these AI teams — and the speed with which they attain unicorn status — points to several underlying factors. For one, today’s AI startups may be able to do more with less — they can use their AI expertise to automate certain functions and scale faster with less staffing than a non-AI company. 

But there’s a likely bigger factor at play: With the current pace of AI advances, alongside the sheer amount of AI hype, AI startups are able to earn investors’ attention earlier and with less to show for their business than non-AI companies. The AI opportunity means many of these startups can bank on fast revenue growth, though it’s unclear how sustainable that is — or when, if ever, that revenue will translate into profit. 

Nevertheless, the breadth of the AI opportunity — across industries, business models, and audiences — means that there is still plenty of white space for these startups to carve out niches.

Among this year’s new unicorns, some of the smallest AI teams include:

• World Labs: 18 employees (founded 2024, valued at $1B)
• Skild AI: 19 employees (founded 2023, valued at $1.5B)
• Sakana AI: 34 employees (founded 2023, valued at $1.5B)
• Cognition AI: 49 employees (founded 2023, valued at $2B)
• Poolside: 75 employees (founded 2023, valued at $3B)

Notably, these startups point to several emerging areas of opportunity in AI:

Intelligent robotics and embodied AI — Both World Labs and Skild AI are working toward making AI systems that can better understand and interact with the physical world. This is also an area where OpenAI is getting involved, via investments in other unicorns like Figure and Physical Intelligence.

Coding AI agents & copilots — Cognition AI and Poolside both focus on automating software engineering. Equity funding to coding AI agents & copilots has exploded this year, nearly tripling to reach $1.8B.

RELATED RESEARCH FROM CB INSIGHTS:

• 15 tech trends to watch closely in 2025
• State of Venture Q3’24 Report
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Our 2025 Tech Trends report provides a concrete roadmap for corporate leaders to navigate some of the most important technology shifts in the year ahead.

We include specific recommendations for action so that business leaders can get ahead of the next wave of value creation.

Here is a selection of key findings from the report:

• AI agents are given money to spend: AI agents’ utility is limited until they can make transactions seamlessly. A small group of tech players is building new infrastructure to make that happen.
• The future data center arrives: With data center power usage expected to more than double by 2026, big tech companies are morphing into energy innovators to support AI workloads. There’s a huge opportunity in improving data centers’ energy efficiency.
• Investment floodgates open for RNA therapeutics: RNA therapeutics developers are pioneering new ways to treat traditionally “undruggable” diseases, with a growing focus on neurodegenerative disorders like Alzheimer’s and Huntington’s diseases.
• AI M&A fuels the next wave of corporate strategy: AI’s share of corporate tech M&A has doubled since 2020. Tech incumbents like Nvidia, Salesforce, and Snowflake, as well as consultancies like Accenture, are rapidly acquiring AI startups to tap into enterprise demand. 
• Disease management enters a new phase with AI: AI is improving care delivery across 3 key areas of disease management: precise symptom evaluation; testing/screening for earlier disease detection (including before symptoms even appear); and finding at-risk individuals in datasets of entire patient populations. 
• Retail’s personalization imperative: Generative AI is unlocking 1:1 experiences across commerce touchpoints, with leaders like Target seeing a corresponding 3x boost in conversation rates. Personalization will become omnipresent in retailers’ offerings.
• And much more

Methodology

Our analysis relies on a wide range of CB Insights datasets, including financing and acquisition data, valuations, founding team and key people data, earnings transcripts, and more. We also leverage CB Insights’ proprietary scoring algorithms to measure business health (Mosaic) and maturity (Commercial Maturity), as well as the likelihood of acquisition (M&A Probability score). Throughout the report, we provide CB Insights customers with jumping-off points to dig deeper into the data behind the report.

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This spending is creating opportunities for growth across the AI data center value chain.

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Discussions of retail media networks (RMNs) and AI are picking up momentum among execs from retailers, agencies, and digital media companies: 

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Despite these declines, $100M+ mega-rounds comprised 51% of total CVC-backed funding in Q3’24, a notable increase from a quarterly average of 37% in 2023. Meanwhile, two-thirds of CVC deals this year have gone to early-stage companies, highlighting a strategic shift toward more emerging opportunities, especially in AI.

Based on our deep dive in the full report, here is the TL;DR on the state of CVC:

• ​​Global CVC-backed funding drops 5% to $15.7B in Q3’24. Nevertheless, that figure is still the second-highest quarterly level since the beginning of 2023. Meanwhile, a 10% QoQ decline to 773 deals — the lowest total since 2018 — suggests that CVCs are increasingly selective, similar to the wider venture market.

• The average CVC-backed deal size has increased 31% so far this year to $27.1M, highlighting investors’ willingness to take risks when they find the right opportunity. However, the median deal size remains the same as last year at $8M, signaling that investors are only more aggressive regarding the largest deals.

• Funding to CVC-backed mega-rounds (deals worth $100M+) represents 51% of total funding in Q3’24. This percentage — roughly in line with the first 2 quarters of 2024 — is up significantly from an average of 37% in 2023, further suggesting that investors are currently willing to make large bets when they decide to invest.
• Early-stage rounds represent 66% of total CVC deal share this year, the highest level in over a decade. CVCs are increasingly focused on early-stage startups, likely driven by the record levels of AI funding and the fact that, across investor types, 72% of deals to AI companies this year are early-stage.

• CVC-backed funding in the US ticks up to $10.5B. Among major global regions, the US continued to lead in CVC-backed funding in Q3’24, followed by Europe at $2.6B and Asia at $1.3B. Within the US, defense tech provider Anduril raised the largest CVC-backed deal with its $1.5B Series F round (CVC investors include Franklin Venture Partners), followed by AI chip developer Groq with its $640M Series D round (backed by Samsung Catalyst).

MORE VENTURE RESEARCH FROM CB INSIGHTS

• State of CVC Q2’24 Report
• State of Venture Q3’24 Report
• State of Fintech Q3’24 Report
• State of Digital Health Q3’24 Report

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