- December 2025 U.S. venture funding fell to $15.4B across 521 deals, down about 15% month-over-month and year-over-year, highlighted by Databricks’ $4B mega-round.
- AI dominated the month with $10.4B (67.6% of funding) across 262 deals, concentrating capital and exposure in one sector.
- Funding was bifurcated as late-stage rounds took 56% of dollars on roughly 8% of deals while early-stage drove most deal volume with a $1M median round.
- New York City outperformed with $2.1B across 75 deals, up ~39% MoM and ~190% YoY, reaching 13.5% of U.S. funding.
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The U.S. venture capital market closed December 2025 with signs of cooling after November’s peaks; total funding was $15.4B, down about 15.4% from $18.2B in November and 14.9% from December 2024’s $18.1B. Yet 521 deals occurred, indicating deal activity broadly held up even as dollars receded. This deceleration aligns with seasonal patterns of capital deployment and announcement timing at year-end but also shows normalization following highly elevated funding levels in 2024 and early 2025.
AI’s dominance in venture capital continues to intensify. In December, 262 AI-related deals gathered $10.4B, or roughly two-thirds of funding, and accounted for half of all transactions. This implies not just large rounds, but widespread investment in early, mid, and late stages of AI, pushing sector exposure for many investors toward high concentration. Strategic risk emerges: should sentiment or regulatory headwinds shift, portfolios heavily weighted to AI may face vulnerability.
Stage dynamics further demonstrate dual pressures. Late-stage rounds (Series C+) absorbed 56.2% of capital but made up only ~8% of deal volume, averaging $201.2M with a median of $77.0M. Early stage comprised 309 of 521 deals (≈59%) but just 10% of dollars, with median $1M rounds. Series A and B rounds had intermediate positions in volume and size. This bifurcation suggests strong investor preference for backing mature, high-growth companies rather than spreading wings at the seed/pre-seed level.
Geographically, the usual hubs prevail but there are interesting developments. San Francisco-Bay Area remains dominant, but deals in places like Columbus, Houston, and Colorado indicate a spreading of capital into deep-tech and infrastructure sectors beyond coastlines. New York City in particular saw a surge: $2.08B across 75 deals in December 2025, up ~39% from November and nearly 190% from December 2024. NYC’s share of national funding rose to 13.5%, largely due to major late-stage rounds including Eon’s $300M in cloud data services.
Databricks’ Series L round is a standout: >$4B raised at a $134B valuation, with the company surpassing a ~$4.8B revenue run-rate and ~$1B revenue from its AI products. It also maintained positive free cash flow over the trailing 12 months, reinforced by backers led by Insight Partners, Fidelity, and J.P. Morgan. This underscores the premium investors place on revenue growth, profitability metrics, and strategic positioning in AI-adjacent infrastructure.
Looking ahead into 2026, key strategic questions arise: will AI’s dominance continue, or will investors begin reallocating toward underrepresented sectors? Can the late-stage funding momentum persist despite macroeconomic or regulatory headwinds? Will median deal sizes in early stages rise to improve seed funding attractiveness? NYC provides a case study: its surge may pre-figure shifting geography of capital inflows. For institutional investors and VCs, diligence on concentration, valuation robustness, and stage exposure will be central.
Supporting Notes
- U.S. startup funding in December 2025: $15.4B across 521 deals; this was a ~15.4% decline from November’s $18.2B and ~14.9% from December 2024’s ~$18.1B.
- AI companies: 262 companies raising $10.4B, making up ~67.6% of all funding and ~50.3% of deal count.
- Breakdown by stage: Late-stage deals accounted for 56.2% of dollars with 43 deals; early-stage was 309 deals (≈59.3%) but only 10% of capital, median deal at that stage $1M.
- Top rounds: Databricks $4B (late-stage), Saviynt $700M Series B, Unconventional AI $470M early-stage, Fervo Energy $460M, and others across clean energy, aerospace, cloud services.
- Databricks metrics: >$4B Series L round at $134B valuation; achieved over $4.8B run-rate revenue (55% YoY growth); positive free cash flow; ~$1B AI product revenue run-rate.
- NYC metrics: December 2025 funding $2.08B across 75 deals; +38.7% MoM vs November and +189.7% YoY; Gotham’s share of national total ~13.5%.