Global venture capital investments rise despite trade conflicts

• Investments rise to 126.3 billion US dollars in the first quarter of 2025
• Major deals in the field of artificial intelligence shape the global market
• Germany climbs to second place in Europe and records investments of 2.2 billion US dollars

Global venture capital investments developed robustly in the first quarter of 2025. This is shown by the new Venture Pulse from KPMG, for which the global venture capital market is regularly evaluated. Global investments reached a new high in the first three months of the year: at 126.3 billion US dollars, more funds were made available than at any time in the last eleven quarters - despite ongoing geopolitical uncertainties, tense trade relations and a persistently weak IPO market.

The increase is primarily due to several major investments in the field of artificial intelligence (AI), including the record USD 40 billion financing round in the American AI company OpenAI. Other US start-ups were also able to secure significant financial injections.

While the global financing volume increased significantly, the number of transactions fell for the fourth time in a row: 7,551 completed deals mark a historic low and illustrate the increasing reluctance of many investors outside the booming AI sector. The trend is clearly moving towards selective, large-volume investments in more established start-ups.

Despite economic uncertainties - triggered by US customs measures, among other things - the European venture capital market is proving resilient. 18 billion US dollars were invested in a total of 1,883 financing rounds - a stable figure compared to the previous quarter. Germany was also able to consolidate its central role within Europe with 2.2 billion US dollars in 189 deals. This puts Germany directly behind the United Kingdom (USD 5.5 billion) and well ahead of France (USD 1.7 billion). One downside remains, however: the number of deals in Germany once again fell significantly, with early-stage start-ups in particular finding it difficult to find investors who were reluctant to invest due to the uncertain outcome of the German general election. Despite the uncertainties, fintechs and start-ups in the fields of AI and deep tech as well as defense remained quite attractive for VC investors in Germany. New funding initiatives from the EU and national governments could further increase confidence in the European AI ecosystem and give the market a further boost.

Outside of the AI segment relating to automation, defense technologies and cyber security, however, experts expect investment activity to be rather subdued in the second quarter of 2025. Concerns about an ongoing trade conflict and general geopolitical uncertainty are deterring many investors. They are holding back on major investments until there is more clarity about the global economic environment.

Clemens Reisbeck
KPMG AG Wirtschaftsprüfungsgesellschaft

T +49 89 9282 1722
creisbeck@kpmg.com