Startup and VC News - Wednesday, June 18, 2025: AI Megadeals and Defense Technologies Drive Venture Market Growth

Our new review covers the key events of the venture market in the second half of June. 2025 brings further acceleration of the venture boom: funding rounds worth hundreds of millions of dollars, sectoral diversity of investments, and a revival of the exit market confirm the strengthening of the positive trend. Investors are still actively investing not only in artificial intelligence, but also in other promising areas - from defense technologies to climate innovations. At the same time, the geography of venture investments is expanding, and the emergence of new funds and strategic partnerships injects additional optimism into the market. Below is a detailed digest of the latest news and trends shaping the venture market today:

The AI investment race is picking up speed: Elon Musk's xAI is in talks to raise $4 billion in new capital (on top of its planned $5 billion in debt), and its valuation has soared to $80 billion. Meanwhile, rival OpenAI is reportedly targeting a round of up to $40 billion, as the scale of AI funding reaches unprecedented heights.

Defense tech boom: Defense-tech startup Mach Industries has secured a $100 million Series B, demonstrating VC funds' growing interest in military and aerospace developments amid the geopolitical situation.

Big deals outside of AI: Geothermal energy startup Fervo Energy has raised $100 million from Breakthrough Energy, proving that AI companies aren't the only ones capable of raising big rounds.

Crypto startups are seeing renewed interest, with new products appearing in traditional markets (Canada is seeing the launch of the first XRP spot crypto ETF) and blockchain projects receiving funding again (Pi Network, for example, has launched a $100 million venture fund). This is a sign that investors are gradually returning to the digital asset space.

New funds are expanding opportunities: corporations and investors are launching new venture initiatives. For example, Analog Devices has created a corporate fund to invest in promising technologies (robotics, climate and medical technology), and Orbit Capital has announced the launch of a €100 million venture debt fund for startups in Central and Eastern Europe. The additional capital increases the availability of funding for startups around the world. M&A activity picks up: Pharma giant Eli Lilly is buying biotech startup Verve Therapeutics for up to $1.3 billion. Coupled with recent multi-billion dollar deals in the tech sector, this signals that major corporations are once again willing to spend heavily on acquiring promising startups.

AI: Mega-Deals and Record Valuations

The artificial intelligence sector continues to attract record investment, with deal sizes growing every month. According to insiders, Elon Musk-founded startup xAI is planning another mega-round – over $4 billion in equity, in addition to a previously announced $5 billion in debt financing. Such a colossal sum reflects how expensive it has become to develop and implement modern AI systems (requiring powerful computing resources, equipment, and the best people).

xAI is already valued at around $80 billion, while its rival OpenAI is reportedly targeting up to $40 billion at a potential valuation of around $300 billion. This means the AI arms race is reaching an unprecedented level, with only the biggest players able to attract such resources to develop their models and platforms.

Defense and Deep Tech in Focus of Investors

Amid rising geopolitical tensions, funds are shifting their attention to defense and related deeptech projects. A recent example is the American startup Mach Industries, which develops unmanned weapons systems, which raised $100 million in Series B (valuation around $470 million). The company has only been around for two years, and its rapid progress highlights the high demand for defense technologies in the venture market. Similar trends are noticeable in the aerospace sector: startups offering innovations for space and national security are increasingly finding support from both venture funds and corporate investors.

Biotech and climate startups are coming to the fore

In addition to the hype around AI, investors are actively funding projects in biotechnology, medicine, and “green” innovations. In the clean energy sector, a notable event was a $100 million round for the American startup Fervo Energy, which develops geothermal power plants (among the investors is the Breakthrough Energy Ventures fund).

In the biomedical sector, interest in companies developing advanced healthcare solutions is also growing. For example, the French project Nabla attracted $70 million to develop an AI assistant for doctors, and the Swiss-American company Mosanna Therapeutics received $80 million to create an innovative spray against sleep apnea. In general, the health and eco-technologies sectors are gradually catching up with IT in terms of venture financing.

Cryptocurrencies: signs of renewed interest

After a protracted decline, the digital asset market is starting to revive, which is reflected in venture investments. Regulators are gradually legalizing new instruments: on June 18, trading in the first exchange-traded crypto ETF (for the XRP token) will start on the Toronto Stock Exchange. At the same time, investors are cautiously optimistic: a number of blockchain projects are receiving funding again. For example, the creators of Pi Network have established a $100 million venture fund to support their blockchain ecosystem. Of course, investing in crypto startups remains risky, but the emergence of new funds and products signals a return of confidence in the sector.

Large corporations resume the hunt for innovations

One of the signs of the market revival has been the increase in the number of large acquisitions of startups by industry leaders. After a pause in 2022-2023, tech giants are actively acquiring innovative companies again. In the first half of June, several multi-billion dollar deals attracted the attention of the industry: Google is buying the cloud cybersecurity startup Wiz for about $32 billion; Meta acquired about 49% of the shares of the AI platform Scale AI for ~$14 billion. Now representatives of other sectors are joining this wave. Pharmaceutical giant Eli Lilly has announced the acquisition of biotech startup Verve Therapeutics in a deal worth up to $1.3 billion, seeking to strengthen its position in the field of genetic therapy. The M&A activity is providing venture funds with much-needed exit opportunities and confirming that major players are willing to pay for promising developments that have been maturing in the depths of the startup environment.

New funds and financing instruments for startups

Following the growth of startup valuations, the number of new sources of capital is also growing. Large corporations are launching corporate venture divisions, and investment firms are mastering unconventional financing instruments. For example, Analog Devices (a major microchip manufacturer) has established its own fund to invest in breakthrough projects in robotics, climate and medical technologies - industrial players are directly investing in deeptech startups.

In Europe, a group of funds launched Orbit Capital, a €100 million venture debt fund focused on supporting high-growth companies in Central and Eastern Europe through hybrid financing. New specialist funds are also emerging in many regions. From corporate accelerators in the Middle East to AI-focused funds in Asia, the global venture community is actively raising capital for the next generation of tech entrepreneurs. These initiatives expand access to funding for startups and demonstrate investors’ belief in the long-term growth of the market.

Russia and the CIS: Local Trends Against the Background of a Global Rise

Against the backdrop of a global venture boom, Russia and neighboring countries are developing their own startup ecosystem dynamics. Limited access to Western capital and sanctions barriers are holding back the inflow of investment, but government agencies and local businesses are looking for new ways to support innovation. At the St. Petersburg International Economic Forum (SPIEF-2025), a special "Innovation Territory" was organized for the first time, where startups in which the Roscongress Foundation invested together with private co-investors are being showcased. This step demonstrates the authorities' desire to stimulate cooperation between science, corporations, and entrepreneurs to develop technologies.

Despite the difficult environment, individual deals are still happening in the region. For example, the fintech startup Investbanq from Kazakhstan recently attracted about $3 million, and the Russian company ARS Smart Robotics received about 249 million rubles at the pre-IPO stage to expand its business. Although the scale of these rounds is incomparable with the multi-million dollar deals of Silicon Valley, the local venture market is gradually adapting to the new conditions. Regional investors are focusing on niche projects and technologies aimed at import substitution, and startups from the CIS are increasingly targeting the Middle East and Asia to attract capital and ensure business growth.

Trends and forecasts: cautious optimism

By mid-2025, the global venture market is demonstrating a confident recovery after the decline of previous years. The return of large funding rounds, the emergence of new unicorns and the revival of IPO activity create conditions for further growth. At the same time, risk factors remain: possible overheating of certain segments (primarily AI) and the uncertainty of the global economy require a balanced approach. Diversification of investments by industry and expansion of the range of capital sources help to reduce these risks. As a result, cautious optimism prevails in the market: industry participants expect the rise to continue, but are closely monitoring the balance between hype and real business performance.