North America Startup Investment Spiked In Q1 Due To OpenAI, But Seed And Early Stage Fell

North America鈥檚 startup investment hit $82 billion in the first quarter, driven by continued enthusiasm around generative AI.

The Q1 tally represented the highest quarterly funding level in three years. However, nearly half of the total came from a single, record-breaking deal: the -led $40 billion financing for announced on March 31.

Beyond that giant late-stage round, funding was down in other categories. Both early- and seed-stage investment declined. Reported round counts also fell across stages.

For perspective, we charted out investment totals, color-coded by stage, for the past nine quarters below.

We also looked at reported rounds over the same period.

Of course, venture capital isn鈥檛 just about putting money into startups. Startup investors also expect returns when companies exit by going public or getting acquired. And by this metric, Q1 was not too shabby, with both the largest startup acquisition ever (鈥檚 planned $32 billion purchase of ) and 鈥檚 market debut in an IPO that raised $1.5 billion.

Below, we鈥檒l take a look in more detail at investment by stage, as well as drill down into M&A and IPO activity for the quarter.

Late stage and technology growth
Early stage
Seed
AI
Exits
M&A
IPOs
An unusual quarter
Methodology
Glossary of funding terms

Late stage and technology growth

We鈥檒l start with late stage, since that鈥檚 where most of the money goes.

For Q1, investors put $66.4 billion into late- and growth-stage deals for U.S. and Canadian companies, per 禁漫天堂 data. That鈥檚 roughly quadruple year-ago levels, and up more than 50% from the prior quarter, as charted below.

As we noted previously, most of the late-stage total came from OpenAI鈥檚 record-setting $40 billion financing. However, there were some other big rounds in the mix that helped boost totals.

The second-largest fundraiser in Q1 was OpenAI rival , which picked up $3.5 billion in a March Series E as well as $1 billion in a -backed January financing.

Somewhat further behind was augmented reality startup , which locked up a $3 billion financing in January at a $12.25 billion valuation.

Early stage

While late-stage dollars flowed, early-stage investment weakened in the first quarter, as investors put an estimated $12.4 billion to work at Series A and Series B.

As charted below, Q1 marks the lowest point in five quarters for both total investment and round counts.

Even though overall funding was down, however, we did see some exceptionally large rounds in the mix.

, a developer of general purpose humanoid robots, picked up the quarter鈥檚 largest early-stage round, a $403 million February Series A.

Next was , a provider of infrastructure for developing AI models that raised a $305 Series B, followed by , a cardiovascular drug developer that secured $300 million in Series A funding.

Seed

The first quarter was also not a particularly robust period for seed investment.

Investors put a total of $3.2 billion to work via 1,016 reported seed and pre-seed rounds in Q1. That鈥檚 by far the lowest tally in years, by both dollars invested and total round counts.

For nearer-term perspective, we charted seed investment and deal counts for the past five quarters below.

Since it鈥檚 not uncommon for seed deals to be reported weeks or months after they close, we鈥檒l expect the Q1 totals to rise a bit over time. However, this is unlikely to alter the broader storyline of lower investment at this stage.

Roughly one-fourth of all seed funding for the quarter came from just two deals: , a developer of an AI-driven platform for scientific research, landed a $200 million seed financing in March; and , a blockchain infrastructure startup, secured $50 million in February.

AI

With so much of total venture funding going to artificial intelligence, we also took a look at how this space performed during the quarter.

Not surprisingly, given that giant OpenAI deal, it was a huge quarter for AI-related funding, with more than $54 billion going to the space. As you can see in the chart below, that鈥檚 by the far the largest total we鈥檝e seen.

Exits

The first quarter was also a comparatively strong period for exits.

As we鈥檝e chronicled previously, Q1 brought us both a record-setting M&A deal and one of the largest tech IPOs in some time. Altogether, it looked like compelling evidence that the exit environment is heating up. (Although this week鈥檚 steep market slide in the aftermath of hefty tariff levies could halt that momentum.)

M&A

Acquisition activity was particularly strong in Q1.

Over the course of the quarter, acquirers announced plans to purchase at least 10 venture-backed U.S. companies for $1 billion or more, per 禁漫天堂鈥檚 Billion-Dollar Exits Board. That鈥檚 the highest total in the past three years.

Moreover, the first quarter鈥檚 M&A lineup includes a record-breaking deal: Google鈥檚 planned $32 billion purchase of cybersecurity unicorn Wiz, announced in March. If consummated, the deal would be the largest acquisition of a private, venture-backed startup ever.

Below, we put together a list of the 10 largest announced acquisitions of the quarter.

IPOs

The startup IPO market wasn鈥檛 especially busy this past quarter. However, we did see one significant market debut with AI cloud infrastructure provider CoreWeave鈥檚 offering in late March. After several up-and-down trading days, the New Jersey company had a recent market cap around $22 billion.

Other companies that debuted during the quarter included , a developer of medicines for obesity and metabolic diseases, and , a precision medicine startup.

An unusual quarter

Typically, when we look back at a quarter, it鈥檚 pretty easy to come up with an adjective or two that sums up the startup investment climate. Things are up, or they鈥檙e down. The exit environment looks strong, or it appears to be weakening.

But Q1 2025 is an unusual period to classify. While total investment is up, that鈥檚 entirely due to a single deal announced on the last day of the quarter. At seed and early stage, funding tallies point more to rising investor pessimism.

As for exit activity, we were beginning to fall deeper into a narrative around the return of big exits. With recent IPO filings by fintechs and , the stage also looked set for some action in Q2.

But now, with major indices on track for their largest contraction in years in the wake of administration tariff decrees, the market environment looks far less welcoming.

Perhaps, when we look back at this period, it won鈥檛 stand out as the beginning or end of a cycle so much as a unique snippet in time, as well as a deal pipeline reflective of both heightened caution and persistent FOMO.

Methodology

The data contained in this report comes directly from 禁漫天堂, and is based on reported data. Data reported is as of April 2, 2025.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

Please note that all funding values are given in U.S. dollars unless otherwise noted. 禁漫天堂 converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to 禁漫天堂 long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

Seed and angel consists of seed, pre-seed and angel rounds. 禁漫天堂 also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. 禁漫天堂 includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the 鈥淪eries [Letter]鈥� naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.

Technology growth is a private-equity round raised by a company that has previously raised a 鈥渧enture鈥� round. (So basically, any round from the previously defined stages.)

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