Private Sector Tech Funding

$200 billion poured into AI in 2024. Everyone thinks it went to chatbots and image generators. They're wrong. Six sectors. Wildly different funding levels. Sector 1: Infrastructure & Compute - $78B (39%) GPUs, cloud infrastructure, data centers, model training platforms. Nvidia isn't the only winner here. CoreWeave raised $7.5B. Lambda Labs raised $800M. Crusoe Energy raised $500M. VCs are betting that whoever owns the picks and shovels wins. Sector 2: Enterprise AI Applications - $52B (26%) Sales automation, customer service, operations, finance. Harvey (legal AI) raised $100M. Glean (enterprise search) raised $200M. Writer (content platform) raised $100M. These aren't consumer plays. They're B2B revenue machines. Sector 3: Generative AI (Consumer & Creative) - $31B (15.5%) ChatGPT, Midjourney, [character.ai](http://character.ai/). This is what everyone talks about. But it's only 15% of total funding. The hype is loud. The capital allocation is moderate. Sector 4: Healthcare & Life Sciences AI - $24B (12%) Drug discovery, diagnostics, clinical trials, patient monitoring. Insitro raised $400M. Tempus AI went public at $6B valuation. Recursion Pharmaceuticals raised $300M. This sector moves slow. The outcomes are massive. Sector 5: AI Safety, Security & Governance - $10B (5%) Model security, red teaming, compliance, adversarial testing. Anthropic alone raised $4B (with safety as core positioning). Scale AI (data labeling + testing) raised $1B. Lakera (prompt injection defense) raised $20M. Regulation is coming. Smart money is positioning early. Sector 6: Robotics & Embodied AI - $5B (2.5%) Figure AI raised $675M. 1X Technologies raised $100M. Physical Intelligence raised $70M. VCs are waiting for proof of commercial viability. The hardware risk remains high. What this reveals. Consumer AI gets the headlines. Enterprise AI gets the checks. Infrastructure gets the biggest checks. Because without compute, nothing else works. If you're building in AI, follow the capital. VCs are signaling where the defensible businesses are. Which sector surprised you most? Found this helpful? Follow Arturo Ferreira and repost ♻️

The best defense is a good (funding) offense. Investors, governments, and builders are all in on defense tech. In recent weeks, we saw major deals and announcements including Anduril's oversubscribed $2.5B Series G, Anthropic's release of defense-specific models, and Impulse Space's $300M Series C. 🚀 Defense tech is having a breakout year – on track for a record-breaking year with projected investor participation up 31% YoY to nearly 1,000 unique investors. This surge represents the highest level of investor interest ever recorded in the sector. The momentum is particularly striking given broader venture market headwinds, signaling that defense tech has become a must-have allocation for institutional portfolios. 💸 The investor base is diversifying beyond traditional defense-focused funds, with generalist VCs like a16z and 8VC developing specific theses in the sector. These investors bring Silicon Valley playbooks — rapid iteration, software scalability, and platform thinking — to an industry historically dominated by slow-moving defense primes. This cross-pollination is accelerating innovation cycles from years to months in critical areas like autonomous systems manufacturing. 🌏 Geopolitical tensions and the Ukraine conflict have validated the strategic importance of defense tech, driving both government and private capital allocation. Earnings call mentions of "defense" reached an all-time high in Q1 2025, while major tech companies and the hottest AI startups are forming consortiums to compete for DoD contracts. This mainstreaming of defense tech reduces reputational risk for investors and opens institutional capital pools previously unavailable to the sector. In chatting with Justin Fanelli (CTO, Department of Navy), it is clear that the increased investor and builder is fueled by the government's increasingly innovation-forward appetite. "Investors and founders who have backed this sector and mission have moved the needle for national security, even while we've been slow, reluctant buyers. We are now overhauling the way we buy at scale. We have shifted many buyer orgs from program offices to more flexible portfolios. This is one of several ways we're putting far more emphasis on impact and value. Innovation adoption and commercial-first pushes have already made us more adaptive and resilient. We want a wider base of high performers. What's better than competition to serve those who serve all Americans better? Recent AI and raise news shows there's more room to make bigger impacts. If we nail this, I think it's fair to expect impact and investment will continue to grow." Curious about the defense tech markets and companies seeing the most interest? Explore the data and insights for *free* in the comments.

One of my favourite kinds of news: Indian conglomerates putting real money behind Indian founders in frontier tech. A few hours ago, Sanjiv Bajaj announced "Finserv Intelligence", a group-wide initiative where Bajaj Finserv will deploy ₹1,500 to ₹2,000 crore over five years into early-stage founders working on AI, cybersecurity, quantum technologies, fintech, and consumer tech. Cheques from seed to Series B. They have also signed a Master Collaboration Agreement with IIT Bombay to set up a joint research centre. The number itself is not what excites me. The model is. .. Because here is the part most people miss when they say "Indian R&D is weak." India spends roughly 0.65% of GDP on R&D. China spends 2.43%. The US spends 3.46%. South Korea is closer to 5%. But the deeper gap is not how much. It is who. - In India, the private sector contributes about 37% of total R&D. - In Germany, France and the UK, it sits between 66% and 69%. - In China, that number is 76%. - In Japan and South Korea, it is around 80%. In every serious tech economy on the planet, corporates do most of the R&D. In India, it is still ISRO, DRDO, government labs, and a few public universities carrying the load. That is the structural hole. .. The state can fund moonshots. It cannot fund a thousand small bets across a thousand founders in AI, quantum, semis, biotech, and defence tech. That is the work of patient corporate capital with a 10 to 20-year horizon. And - VC funds cannot do it either. Most need exits inside 7 to 10 years. Deep tech does not respect that calendar. That leaves exactly one player: large Indian conglomerates with a permanent balance sheet and a long view: Tata. Reliance. Adani. Birla. Mahindra. Bajaj. JSW. Vedanta. Murugappa. If even half of them committed ₹2,000 crore each to deep-tech founders over five years, India would have a private R&D pool the country has simply never had. .. Bajaj's commitment is modest in rupee terms but powerful as a template. A conglomerate is saying: we will partner with an IIT, we will write cheques at seed, we will sit on the cap table for a decade. That is precisely the muscle India has never built. I hope every other group is watching. PS: I share several biz/economy deepdives daily, with 48k+ people on WhatsApp. Do check out here: https://t.ly/h2jq1 Best, Jayant

⭐ FT Partners is pleased to announce the publication of our 2024 FinTech Almanac report, providing the most comprehensive review of global #FinTech deal activity with analysis across private company financings, IPOs, and M&A transactions.    📊 Read or download the full report below or here: https://lnkd.in/efBjK6cN   💰 2024 FinTech transaction activity highlights: • When excluding $1 billion+ capital raises from both 2023 and 2024, private company financing volume rose a modest 13% year-over-year. • By way of number of capital raises, 2024 far outpaced the lull experienced in 2023, increasing nearly 30%. • Seed and Series A funding volume was nearly 2x higher than 2020, largely driven by a surge of investments in Crypto & Blockchain. • While late-stage funding activity did not return as prominently, there were eleven more $100 million+ capital raises in 2024 compared to 2023 and several significant valuation increases announced throughout the year like for Stripe ($70 billion), Revolut ($45 billion), Rippling ($14 billion), Ramp ($8 billion), and Monzo Bank ($5 billion). • #ConsumerFinTech mounted a comeback during the year as four out of the top five largest venture rounds were for consumer brands (Abound, Monzo Bank, Ualá and Zepz). • While other regions plateaued or experienced slight declines in 2024, #LatAm FinTech funding volume grew 70% year-over-year, with large raises for companies like Ualá, ASAAS, Celcoin, Contabilizei, Stori, and Clip. • The most active investors during the year included many crypto-focused VCs and strategic investors - Robot Ventures, OKX Ventures, Big Brain Holdings, Polychain Capital, and Animoca Brands. When excluding crypto investments, QED Investors, Citi Ventures, General Catalyst, Andreessen Horowitz and Anthemis Group join the top ranking. • With a total of eleven global IPOs in 2024, IPO activity during the year made small gains over 2023, which had just six international IPOs and no US IPOs. • M&A activity strengthened in 2024 with deal count growing 25% and announced dollar volume rising 80% year-over-year. • Volume was prominently boosted by the pending $35 billion Capital One / Discover Financial Services merger as well as 28 $1 billion+ private equity buyouts, ten of which were take-privates. • Acquisitions made by scaled FinTech companies – like Stripe’s $1.1 billion acquisition of stablecoin infrastructure player Bridge – actually outpaced the level in each of the prior three years, while the number made by large strategics has not yet caught up to where it was in 2021.

Private Thoughts From My Desk……. #45 Health Tech Is Eating Private Markets’ Lunch   When people think of private equity, they still picture buyout kings gobbling up logistics, B2B services and software. But if you are not watching what is happening in healthcare, and especially health tech, you are missing the next power move.   According to the Barclays Private Markets Annual Report 2025, healthcare focused private equity funds raised nearly three quarters of their entire 2024 total in the first half of 2025. That isn’t just momentum. That’s a category making its presence felt.   Look at the first chart below. Capital is sprinting into healthcare like it is chasing weight loss drugs on IPO day. This is what happens when demographic inevitability meets system dysfunction meets tech enablement. Populations are aging, budgets are strained, and politicians cannot cut their way to sustainability. Someone has to fund the upgrade. This trend has been driving healthcare deals for some time, and it is continuing.   Now look at the second chart. Health tech deal value has not just crept higher, it has surged. The action is coming from buyouts more than from early-stage bets. Private equity smells margin where legacy systems still smell of fax machines and clipboards. Hospitals and insurers are realizing that workforce management, compliance and even diagnostics cannot run on spreadsheets forever.   The interesting part is that these are not wild science projects. The money is flowing into businesses that fix ugly everyday problems. Scheduling nurses. Getting claims coded correctly. Making sure the right drug goes to the right patient. Boring is beautiful when it throws off cash.   The exit side is starting to cooperate as well. Median exit values in health tech have moved up, helped by larger strategics who would rather buy a working platform than build one from scratch. That gives sponsors a clearer path from thesis to realization, not just a nice story in an investment committee deck.   Put it together and this does not look like a short-term trade. It looks like a multi-decade rewiring of a ten trillion dollar global industry that has only just begun to digitize. In that world the question for private investors is simple. If your private markets portfolio still behaves as if it is allergic to stethoscopes, how long can you afford to wait? #privateequity #privatemarkets #privatethoughtsfrommydesk

Private equity (PE) funds are acquiring major stakes in tech firms operating in areas like digital engineering and healthcare, Beena Parmar reports for The Economic Times. Technology was the top sector for PE/VC investments in Q1 2025, with $3.1 billion invested across 41 deals — a 265% year-on-year value increase, according to IVCA-EY data. While Kedaara Capital in January invested $350 million in data, analytics, and AI solutions firm Impetus Technologies, H.I.G Capital acquired Converge Technology Solutions for C$1.3 billion earlier this year. Agiltas PE also purchased Tietoevry Tech Services for €300 million. Around 70-80 new buyers have entered the market, says Shobhit Jain, Head of Enterprise, Technology, and Services at Avendus Capital. He adds that there is an increasing interest in large deals, because sub-segments like cloud and analytics have seen a 20-40% growth, even in large-scale businesses. What's driving this surge in mergers and acquisitions (M&As)? The fact that in today's tech landscape, a purely organic growth model doesn't result in significant, double-digit growth, adds the Economic Times report, citing analysts. Gaurav Vasu, founder and CEO of UnearthInsight, adds that there has been a 200% growth in M&A investments by PE-backed IT services firms. In 2024, PE-VC investments rebounded 9% year-on-year to touch almost $43 billion, according to Bain & Company and IVCA's India Private Equity Report 2025. While consumer tech funding saw a nearly 2X increase during the period, healthcare deal volumes also jumped by almost 80%, driven in part by large medtech transactions, according to the report. What trends will shape India's tech M&As in 2025? Share your take in the comments. Source: The Economic Times: https://lnkd.in/gh2gkB79 Bain & Company- Indian Venture and Alternate Capital Association (IVCA): https://lnkd.in/dXAhvwaq IVCA EY: https://lnkd.in/g7M5UwkZ ✍ : Isha Chitnis 📸 : Getty Images #PrivateEquity #VentureCapital #TechInvestments

--AI buildout: JPM projects $5–7T needed over the next 5 yrs to fund global AI data center construction, adding 122–144 GW of capacity. --Capital funding: Roughly $300B/year from “tech giants” cash flows, plus $1.5T from IG, $150B from leveraged finance, & $30–40B/yr from securitization. --Funding gap: Even after public markets, a $1.4T shortfall remains; expected to be filled by private credit & government capital. --Bottlenecks: Power infrastructure is the main constraint; 3–4 yrs for turbines, 10+ yrs for nuclear, slowing rollout but sustaining long-term funding needs. --Private credit innovation: With ~$466B in dry powder, private lenders are key players, illustrated by Meta’s $27.3B off–balance sheet financing structure. --Return hurdle: Achieving a 10% hurdle rate on investments over the next 5 yrs could require on the order of $650B/yr revenue (or 58bps of global #GDP). -Source: JPM: AI Capex - Financing The Investment Cycle #datacenters #investing #capitalmarkets #capitalexpenditures #artificialintelligence #AI #debt #privatecredit #privatedebt

Top venture capital firms are borrowing a strategy from the private equity playbook, pumping money into tech start-ups so they can “roll up” rivals to build a sector-dominating conglomerate. Among those deploying the approach is Thrive Capital, a backer of OpenAI and Stripe, which is involved in a new $72mn funding round for wealth management start-up Savvy Wealth. The investment values the New York-based group at $225mn. The funding will go towards buying up smaller advisory firms and hiring individual advisers, as well as embedding artificial intelligence into the group’s operations. General Catalyst, one of Silicon Valley’s largest VCs, has earmarked roughly $750mn to pursue roll-ups in areas from call centres to legal services and property lettings. Other venture capital groups, including Khosla Ventures, Bessemer Venture Partners and 8VC are also exploring roll-ups. The roll-up strategy creates an avenue for VCs to generate liquidity from their portfolios at a time when initial public offerings and dealmaking have slowed. https://lnkd.in/ewSnZb8T

Why Are Startups Staying Private Longer? Late-stage startups - including health tech- are raising massive private funding rounds and holding off on IPOs. Why is this happening? Here’s What’s Driving the Shift: Tons of Private Capital: There’s so much money available in private markets right now that startups don’t feel pressured to go public. Public Market Headaches: For health tech, public markets can be brutal—regulations, policy shifts, and market sentiment make staying private a safer bet. Focus on the Bigger Picture: Without the stress of earnings reports, companies can focus on the big picture —things like R&D, clinical trials, and scaling strategically. For Health Tech & Investors: Longer Runways: Big funding rounds mean health tech startups can innovate faster. Growth Moves: Flush with cash, companies are expanding quickly and dominating market share. Oura raised $200M recently, doubling its valuation to $5.2B. Getting in Early Is Key: The best opportunities are happening before companies go public. For investors, this means having the relationships and networks to access these private deals. #VentureCapital #Innovation #Startups #DigitalHealth #Investing #VCTrends #PhyCap

🚀 State of the Private Markets: The Pre-IPO Intel You Need 🚀 🏆 The Most Valuable Private Tech Companies Between SpaceX, xAI, and X, Elon Musk is tied to nearly $450B in private company value—and that doesn’t even include his role in seeding OpenAI. If you add Tesla’s current Enterprise Value, you’re looking at $1.5T. 🔥 CoreWeave (cloud AI infra) is rumored to file for an IPO next week, aiming to raise $4B at a valuation above $35B. This is an increase from their latest valuation of $23B 🔥 Anduril Industries (defense tech) just signed a term sheet to double its valuation to $28B. 🔥 Anthropic (AI) raised in February at a $60B valuation, placing it just outside the top five most valuable private tech co's. 📍 Geographic Breakdown: 17 of the top 20 most valuable private companies are U.S.-based. 📈 Hiring Trends Tech is a people business—over 70% of SaaS expenses go toward headcount. We tracked hiring across 5,000+ private companies to reveal: 💡 Fastest Hiring Companies (+70% y/y growth) 🔥AI: xAI, OpenAI, Anthropic, CoreWeave, Glean 🔥Cybersecurity: Wiz, Huntress 🔥Back Office: Ramp, HiBob 🔍 Sector Deep Dives 🛠 HR Tech: Back-office consolidation is accelerating. HiBob acquisition of Mosaic.tech signals an HR + Finance convergence. Expect more M&A in this space. 🔐 Cybersecurity: Wiz is pulling away from the Cyber Security crowd. $500M in 2024 revenue, growing 100% YoY, and on track for $1B ARR in 2025. A Google acquisition fell through, but an IPO is likely in the next 12 months. ⚖️ LegalTech: AI is eating LegalTech. Harvey is scaling at 4x ARR growth, reaching $50M in record time. 💰 Notable Rounds & Executive Moves Anduril Industries→ Raised $2.5B to scale defense AI. Mercury→ Rumored to be raising at a $3B valuation on $500M revenue. Saronic Technologies→ Raised $600M to build autonomous submarines This wraps up State of the Private Markets for this month. A huge thank you to MUFG for making this possible. (Disclaimer: None of this is investment advice. Do your own homework.) 🔔 Follow and subscribe so you don’t miss the next deep dive! Full story: mostlymetrics.com