Global venture capital deals declined in Q1 2025 compared to the same quarter a year ago, according to a report by the National Venture Capital Association (NVCA) and Pitchbook.
In North America, there were 3,155 deals in Q1 2025, compared to 4,282 deals in Q1 2024. In Europe, there were 1,852 deals in Q1 2025, compared to 2,917 deals a year earlier; in Asia, the deal count was 2,063 in Q1 2025, compared to 3,111 a year earlier; in Latin America, the deal count was 156, compared to 225 a year earlier. And in the rest of the world, there were 325 deals in Q1 2025, compared to 561 deals a year earlier.
In Q1 2025, M&A exits for VC-backed companies also declined, with deal value amounting to $78.2 billion across 636 deals, compared to an average of $80 billion across 726 per quarter across all of the quarters of 2024.
Asia results
Melanie Tng, Asia Pacific private capital analyst, said in the report that VC deal activity in APAC remained subdued in Q1 2025, continuing a multi-year trend of caution amid macroeconomic uncertainty.
“The number of deals declined, but total capital invested rose sharply, driven by larger rounds in the B2B space. Binance raised $2 billion, which was the largest deal in Asia,” Tng said.
VC-backed exit activity continued to lag in Asia, falling to just 95 exits in Q1 2025, the lowest since Q2 2019, Tng said. Historically, markets in the region have struggled with consistent exit channels, especially as many remain relatively in developing robust financial ecosystems. The exit drought has also impacted fundraising, which remained muted as LPs await clearer signs of liquidity.
Tng said information technology remained the top sector by deal count, underpinned by ongoing momentum in AI and digital infrastructure. This trend was also supported by government-led strategic initiatives, especially as geopolitical tensions continue to spur the push toward tech sovereignty in developed Asia.
South Korea, for instance, launched a KRW 34 trillion fund in February to back cutting-edge industries such as semiconductors, batteries, and biotech. In March, China also announced a state-guided VC fund to support advanced manufacturing and strategic technologies.
U.S. results
Kyle Stanford, director of U.S. venture research at Pitchbook, said the U.S. market has become very bifurcated between a handful of companies able to raise an endless amount of money, and the rest of the market that continues to struggle through a capital shortage.
About 71% of total deal value in the US went to AI investments. That amount is highly biased with OpenAI’s $40 billion round. Though excluding that deal, AI still captured 48.5% of the total invested during the quarter on 1/3rd of completed deals.
“Exit activity showed signs of excitement in Q1 with the high-profile IPO of CoreWeave, the announcement of a $32 billion acquisition of Wiz (yet to be completed), and several other well-known brand IPO filings,” Stanford said. “However, outside of those few transactions, the liquidity market remained subdued. Just 12 companies completed public listings, and liquidity worries abound within the market.”
Lack of distributions continues to pressure the fundraising market. Just $10 billion in new commitments were closed in Q1, setting the year on pace for the lowest fundraising environment since 2016.
Europe results
Navina Rajan, Europe/Middle East/North Africa senior private capital analyst said that European VC deal value in Q1 paced below last year, as the first quarter of 2025 showcased signs of a more cautious environment and uncertainty felt by wider macroeconomics.
By vertical, AI moved into the top-ranked vertical by deal value as life sciences and fintech also showed resilience. It is likely that activity and rankings will evolve as we move through the year.
Exit value also saw a soft start to the year. Despite recent market volatility, we are still expecting IPO activity to pick up in Europe as valuations and volatility remain within favorable thresholds for an IPO window.
“Capital raised by Europe-based VC funds had a soft start to the year where most closes sat in smaller brackets. The largest closed vehicles so far this year have been outside of the UK. Emerging managers also gained a share of the fund count with a few first-time funds,” Rajan said.
Latin America results
And Stanford said that VC investment in Latin America reached $1.4 billion in Q1, the strongest quarter for deal value since Q3 2022. Several large deals drove value, including a $376 million investment into the digital banking app Ualá. Deal counts slid roughly 20% quarter-over-quarter, coming in at the lowest since 2020.
Just two VC funds were closed with new commitments in Latin America during Q1. Just 22 funds have closed since the beginning of 2024, with less than $600 million in total commitments. This will have impacts on near-term dealmaking without foreign investment increases. The lack of exits continues to weigh on the Latin American VC market.
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