Summary:
15.9% of venture-backed deals in 2025 are down rounds, marking a decade high
Major IPOs like MNTN, Circle, Hinge, and Chime hit markets below peak valuations
AI startups still command premium valuations, with Series B step-ups at 2.1x
Q2 saw $67 billion in exit value, the highest since late 2021, but only 1% of unicorns went public
Notable funding rounds include Reprieve Cardiovascular ($61M) and Protege ($25M)
The early 2020s' skyrocketing startup valuations are finally descending back to reality. PitchBook data highlights a startling trend: 15.9% of venture-backed deals in 2025 have been down rounds, the highest in ten years. This shift underscores a significant cooling in the startup investment frenzy.
The IPO Market's Harsh Reality
Nearly all major IPO listings in Q2 entered the public markets below their peak valuations. Notable examples include:
- MNTN: Dropped from $2 billion to $1.1 billion
- Circle: Fell from $7.7 billion to $5.8 billion
- Hinge: Valued at $6.2 billion at IPO, down from $23 billion
- Chime: Went public at $9.1 billion, a stark drop from its $25 billion peak
AI: A Silver Lining with Shadows
While AI remains a bright spot, it's not immune to the downturn. 29.3% of down rounds occurred in AI and machine learning sectors. Yet, giants like OpenAI and Anthropic continue to defy trends, with valuations soaring to $500 billion and $170 billion, respectively. AI startups still command a premium, with Series B step-ups at 2.1x, significantly higher than the 1.4x median for other sectors.
The IPO Comeback with a Catch
The U.S. IPO market showed signs of revival in Q2, generating $67 billion in exit value—the highest since late 2021. However, the abundance of unicorns means limited distributions to VC firms and their LPs. A sobering statistic: Only 1% of U.S. unicorns have gone public this year.
Venture Deals Spotlight
- Reprieve Cardiovascular: Raised $61 million in Series B for heart failure treatment tech.
- Protege: Secured $25 million in Series A for AI training data sets.
- Evertune: Landed $15 million in Series A for its AI marketing platform.
- Isaac Health: Garnered $10.5 million in Series A for dementia care technology.
Private Equity Moves
- WideOpenWest: Taken private for $1.5 billion by Crestview Partners and DigitalBridge Investments.
- Infinity Retail Services: Acquired by Agility Retail Group, backed by San Francisco Equity Partners.
Exits and Acquisitions
- Solaris Health: Acquired by Cardinal Health for $1.9 billion.
People on the Move
- Harrison B. Davis: Joins H.I.G. Capital as Managing Director, previously with TZP Group.
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