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The Arc Of Venture Capital Bends Toward Democracy
By Ben Miller Once upon a time, tech founders built toward IPOs — not tender offers. In 1999, the median tech startup went public just five years after its founding. Today, that figure has stretched to 14 years. Instead of ringing the opening bell, founders are increasingly turning to private liquidity, keeping equity locked in private hands long past the company’s breakout success. That shift has created a far bigger — and increasingly private — pie. In 2005, the combined value of the 50 most-valuable private U.S. tech companies was less than $5 billion. Today, that number stands at $1.8 trillion. Over the same period, private markets have matured from niche pools into deep oceans, with global private-market assets under management surpassing $15 trillion — up from just $100 billion in the mid-1990s, a 150x increase. As a result, we’re entering an era where the most transformative value — like the $20 trillion impact projected from AI — could be created almost entirely within private markets, widening the wealth gap between insiders and everyone else. The long-standing objections to broader VC participation — risk, illiquidity, transparency and fees — are rapidly losing relevance. Let’s take them one by one. ‘Venture capital is too risky’Ben Miller Risk is not monolithic. Late-stage companies such as Stripe, Databricks or Canva look far more like mid-cap public equities than garage-stage moonshots. Investors can capture meaningful upside and diversify against individual company blow-ups by thoughtfully constructing a portfolio of 30 to 40 late-stage (post-Series C) funding rounds. ‘But it’s illiquid’ Illiquidity is relative. Half of U.S. public equities are already locked in passive funds that rarely trade. Meanwhile, the private secondary market hit a record $162 billion in transaction volume in 2024 — and continues to grow. Publicly registered VC funds can also hold 20% to 30% of assets in stocks or Treasuries to meet redemptions, bridging short-term liquidity needs with long-term exposure. ‘There isn’t enough oversight’ That’s changing. New publicly registered, evergreen VC funds, like the Fundrise Innovation Fund, are subject to SEC filings, audited financials and daily NAV disclosures. Retail investors are now getting more transparency in private markets than they do in many traditional mutual funds. ‘The fees are outrageous’ Historically, yes. 2% management fees plus 20% carry were the norm. But new models are emerging. The Fundrise Innovation Fund, for instance, owns equity in nine of the 10 most well-known private U.S. tech companies — including OpenAI and Anthropic — and charges no carried interest, only a flat 1.85% management fee. So why democratize VC now? Momentum is finally on the side of access. In June 2025, the House passed the Fair Investment Opportunities for Professional Experts Act in a 397-12 landslide, directing the SEC to open private markets to knowledgeable investors, regardless of net worth. The scale of the opportunity is enormous. Missing out on a $20 trillion AI wave isn’t just unfortunate — it’s locking out the majority of Americans of a generation-defining creation of wealth. Private tech also provides diversification in an era when public portfolios are dominated by the “Magnificent Seven.” And with 60% of public equity assets held passively, denying those same long-term investors access to private growth feels increasingly arbitrary. Venture capital will always carry risk — but so did buying Amazon in 1997 or Nvidia in 2015. What’s changed is the timeline: Today, the lion’s share of value is created before companies ever go public. Publicly registered VC funds are a breakthrough. They pair regulatory oversight with access to innovation, offering everyday investors a chance to participate in the upside of early-stage growth. Just as ETFs transformed public markets, these vehicles could reshape the future of private capital. The arc of innovation bends toward abundance. It’s time for venture finance to bend with it — toward the many, not the few. Ben Miller is the CEO and co-founder of Fundrise, the leading direct-to-consumer alternative investments manager. Related reading: Illustration: Dom Guzman
5 Interesting Startup Deals You May Have Missed In September: A Better Insulin Patch, Maternal Mental Health Care, And A Non-Humanoid Robot
This is a monthly column that runs down five interesting startup funding deals every month that may have flown under the radar. Check out our August entry here. While AI startups continue to get the lion’s share of venture funding, this month most of the startups that caught our attention weren’t centered around artificial intelligence. Rather, they include a startup making a more environmentally friendly fertilizer, a mental health platform for new and expecting mothers, and a medical device company aiming to make a better insulin patch for people living with diabetes. Let’s take a look. $85M for a cooler insulin patch One of the companies that caught our eye this month is ViCentra, a Dutch startup with an insulin patch pump designed to look and feel more like a trendy tech gadget than a medical device. The Netherlands-based company raised $85 million in Series D funding in early September. Its round comes as diabetes is becoming more prevalent worldwide, with the insulin pump market projected to reach more than $14 billion by 2034. Of that, patch pumps — small, tubeless devices that adhere directly to the skin and deliver insulin continuously without the need for external tubing — represent the fastest-growing market segment. ViCentra makes Kaleido, a small, sleek, waterproof insulin patch pump that comes in an array of bright, sparkly colors similar to iPhone hues. The device also integrates with a cloud platform where users can track their glucose levels, sleep, and diet and exercise insights that they can then choose to share with doctors or family members. “Kaleido is a true disruptor — small, discreet, featherlight, and beautifully designed,” ViCentra CEO Tom Arnold said in the funding announcement. “It empowers people with diabetes by offering a more personal and distinctive choice in both function and style. Built with empathy and precision, it honors those who live with diabetes every day. With this funding, we can now meet surging European demand and fast-track our entry into the U.S. market.” The company’s Series D was led by new investor Innovation Industries, with matching participation from existing investors Partners in Equity and Invest-NL. Previous investors EQT Life Sciences and Health Innovations also joined. Environmentally friendly fertilizer gets a $50M boost We typically think of things like power plants, vehicles and industrial factories when we consider the top contributors to greenhouse gas emissions. A less commonly known culprit: agricultural fertilizers. But fertilizers to grow crops — traditionally done through what’s known as the Haber-Bosch method — are estimated to generate more than 2% of greenhouse gas emissions. The Haber process produces ammonia by reacting nitrogen from the air with hydrogen (usually from natural gas) under high temperature and pressure, using an iron catalyst. Ammonia is the key ingredient in most nitrogen-based fertilizers, making the process critical for large-scale crop production worldwide. But while traditional fertilizers have enabled mass food production, they also create a lot of negative externalities. Among them are high energy use and emissions, resource dependency on natural gas for hydrogen, environmental degradation and biodiversity loss. A San Francisco-based startup, Nitricity, has a different approach. The company this month announced $50 million in Series B funding and broke ground on its new organic fertilizer plant in California’s Central Valley. There, it will use renewable power to produce its organic, nitrogen fertilizer liquid, called Ash Tea, made from recycled organic almond shells, air and water. The company says Ash Tea is cost-competitive with other commercially available organic fertilizers, but is more environmentally friendly and free from pathogens and animal products. Field trials of the product have reportedly shown up to 30% increases in yield. Nitricity’s pilot factory in Fremont, California, currently produces 80 tons of fertilizer per year, which treats around 80 acres of crops. The company says all of its current production is spoken for and it has $150 million in its sales pipeline. The new factory is expected to begin operation next year and will mark a 100x production increase, according to the company. “This is an inflection point for Nitricity. We’re scaling across the U.S. and we’re very excited to expand into Europe in a serious and assertive way. The European market for our organic fertilizer is even larger than in the U.S., and demand is only growing against a backdrop of European governments looking to boost resilience and create circular agriculture economies,” Nitricity co-founder and CEO Nicolas Pinkowski said in a statement. Its Series B was co-led by new investor World Fund and returning investor Khosla Ventures. Other participants included Chipotle‘s Cultivate Next venture fund, Change Forces, Susquehanna Sustainable Investments, Energy Impact Partners and Fine Structure Venture. $10.8M for a toothbrush that does the work for you Toothbrushes haven’t changed much since the first electric one came on the market in the 1950s. But ZeroBrush is one of a handful of funded startups working on changing how we clean our teeth with oral cleaning devices designed to be customized, more efficient and more effective. The Palo Alto, California-based company this month announced $10.8 million in funding to launch what it calls “the world’s first full-mouth oral cleaning device.” The brush is fully automated, “cleaning all 192 tooth surfaces simultaneously with custom-fit, 3D-printed mouthpieces and sonic-powered bristles.” The company claims that early testing shows its device removes nearly twice as much plaque in half the time of manual brushing. ZeroBrush was founded by cosmetic dentist Dr. Nidhi Pai and product innovator Akash Pai. Its investors include Social Capital and an unnamed “large CPG strategic,” angel investors and a Meta senior executive, the company said. “ZERObrush is not just an incremental improvement — it’s a completely new category of oral hygiene that brings professional-level cleaning to everyday routines,” Dr. Pai said in a funding announcement. The company is one of several funded startups working on custom oral hygiene devices. Another is Proclaim, which makes a full-mouth flossing device and has raised $15 million in funding. $8M for better maternal mental health care While bringing a new baby into the world is for most people a joyous occasion, it’s also often one of the most difficult and challenging experiences of a mother’s life. It’s not just the physical recovery that follows childbirth, either: In fact, perinatal mood and anxiety disorders affect an estimated 1 in 5 women, making them the most common complication of childbirth. And yet, an estimated three-fourths of women diagnosed with postpartum mood or anxiety disorders never receive treatment, whether that’s due to perceived stigma, provider shortages, insurance limitations or other access issues. That lack of treatment can have devastating consequences: Suicide and overdose are the leading causes of maternal death in the U.S. in the first year postpartum. This month, Seven Starling, a New York-based startup, said it has raised $8 million in new funding to expand its maternal mental health platform, focusing on treating women during fertility challenges, pregnancy, postpartum and early parenthood. Rethink Impact led the round. Pear VC, Zeal Capital Partners, Magnify Ventures, Ulu Ventures, Expa, Fiore Ventures, March of Dimes, Rogue Women’s Fund and Graham & Walker also participated. The company, which has now raised $22.4 million, per Crunchbase, said it already operates in 18 U.S. states and has partnerships with over 1,500 OB-GYNs. With the new funding, it plans to expand to more than 30 states by the end of 2026. The company says it maintains in-network coverage with health insurers Anthem, Aetna, Cigna and United Healthcare, and has expanded coverage options including Medicaid programs in a growing number of markets. “We saw an opportunity to build something different by working directly within the healthcare system rather than working around it,” CEO and co-founder Tina Keshani said in a statement. “Our provider-integrated approach ensures women get specialized care at the moment they need it most.” $1.5M for a robot that doesn’t try to be human Robotics funding recently hit a multiyear high, boosted by a billion-dollar round for humanoid robotics startup Figure. But smaller startups working on robots — humanoid or not — are raising cash, too, many of them with industrial or workplace applications. One of the latest is MicroFactory, which makes a tabletop robot designed to do repetitive manual work such as electronics assembly. The San Francisco-based company earlier this month announced $1.5 million in pre-seed funding from investors including Hugging Face co-founder Clement Delangue and early Uber and Twitter investor Naval Ravikant. MicroFactory’s robots are priced around $5,000. Unlike the humanoid robots being developed by many funded startups, the company’s general-purpose bots are small enough to fit on a desktop, and in a compact-box-shaped frame. Their robotic arms are designed to work with interchangeable tools and can perform tasks including precision soldering and screwing, cable routing, peeling adhesive films or plastic layers, and light-duty food processing and packaging. “You don’t need a humanoid robot to automate tabletop work,” co-founder and CEO Igor Kulakov said in a statement. “Our robot design allows us to automate tasks with the current state of robotic AI models and hardware.” Since they don’t need legs, complex human-like fingers, or batteries, MicroFactory’s machines are also much simpler — and cheaper — to manufacture than their humanoid counterparts, according to the company. MicroFactory says it has secured paid reservations from more than 100 customers in industries ranging from electronics assembly and textiles to food processing and laboratory automation. The first units are expected to ship in early 2026. Related Crunchbase queries: Illustration: Dom Guzman
Who Is Governing AI Companies? For Nearly Half Of AI Startups In California, The Answer Is Only Men
By the California Partners Project, Crunchbase and illumyn Impact This report was produced through a collaboration between the California Partners Project, illumyn Impact and Crunchbase. Executive summary If social media has taught us anything, it’s that new technologies can have widespread and often unanticipated effects. They can change not only how we work but also how we think and how we relate to each other. Artificial intelligence has an unprecedented potential to shape our future in exciting and unforeseeable ways. As business leaders and government agencies around the world grapple with the responsibility of managing the risks that accompany the promised rewards of AI, one immediate and evidence-based place to start is building a diverse board of directors. Yet our research indicates that, on that front, AI company boards fall woefully short. Boards that fail to reflect a wide range of experiences and viewpoints are not well-positioned to oversee companies whose products may determine how bank loan applications are evaluated, how healthcare issues are diagnosed, or how educational resources are allocated. Although no single measure can ensure responsible AI development, diverse board leadership is vital for companies creating technologies that will fundamentally reshape how we live, work and interact. Within this study, we look at gender diversity, which is reasonably measurable, as a proxy for diversity of perspectives, life experience, areas of expertise and other demographics. To understand the gender mix on AI boards, we analyzed the board composition of more than 140 AI companies headquartered in California, where venture-backed AI development is concentrated. Our study focused on 102 private companies that have raised at least $50 million in cumulative funding. As we’ve seen time and again, transformative innovations are as likely to come from today’s nascent startups as they are from established industry leaders. Governance of these companies during their high-growth, pre-IPO period is arguably as important as it is after they go public. We also looked at the boards of 39 publicly traded AI companies for comparative purposes. Our analysis revealed a striking lack of gender diversity among the people who govern some of the world’s most influential AI startups. Women comprise only 15% of the boards of private AI companies. More than 40% of these private boards don’t have any women directors. Two root causes contribute to this gender disparity — one structural and one behavioral. First, investors and founders collectively hold the majority of private company board seats, and women are still underrepresented in those categories. Second, when appointing independent directors, boards often limit their consideration to familiar candidates instead of seeking qualified experts outside their immediate networks. The good news: There are plenty of executive women and people of color on the cutting edge of AI innovation who are ready to bring their voices and operating expertise to the boardroom. Companies that prioritize building a diverse board need only to look beyond their existing networks to find a wealth of AI board talent. Consider this precedent: Five years ago, one-third of all public companies in California had no women board members. With focus and effort, all-male boards are now the rare exception. Given the rapid pace of AI development, companies need to act now, while the technology and its applications are still emerging. CEOs and board members who bring more women and people of color into their boardrooms will help create a productive and healthy AI-powered future for all of us. Key findings Among the AI companies headquartered in California included in our study: Women average just one seat in AI boardrooms Across all of the California-based AI private companies studied, women hold an average of one seat on a six-person board. Among 102 private companies, only five boards (5%) have an equal or greater number of women than men in the boardroom. More than 40% of private AI companies have all-male boards Among the over 100 privately held AI companies headquartered in California included in our study, 44 (43%) don’t have any women in the boardroom. Gender diversity is slightly higher on the boards of companies with more capital. Among those with cumulative funding of at least $50 million but less than $100 million, 62% have all-male boards. For companies with at least $100 million in funding, that number drops to 32%. This shift likely stems from the addition of independent directors who bring operational and market expertise. Among publicly traded companies, women hold an average of two board seats, double the average among private company boards. Research suggests that, to capture the full economic benefits of diversity, boards should include at least three women directors. Just half of the public companies we studied meet that threshold. For private company boards, independent director appointments offer the fastest route to diversity Most private company board seats (72%) are held by company executives (the CEO and co-founders, typically) and early investors. Women hold only 10% of these board seats, a reflection of the underrepresentation of women among venture capital investors and the entrepreneurs they fund. Women hold less than 20% of investing partner roles in venture capital firms. Companies with women-only founders secured just 3% of AI venture funding in 2023, a number stagnant since 2015. More than half (55%) of the women directors included in our study hold independent board seats. That is, they are neither tied to the company’s founding or management team nor investors in the company. Whereas public companies must have a minimum number of independent directors, private companies have no such requirements. Therefore, independent directors are typically added later in a company’s lifecycle, often as part of preparation for an IPO. The percentage of companies without any independent directors decreases as the level of funding increases — from 36% for those with $50 million to $99 million to 21% for those with $100 million or more. Our findings suggest that women are more likely to be appointed to private company AI boards as the second independent director. On boards with only one independent director, women hold 17% of those independent director seats. Among companies with more than one independent director, 67% had at least one woman in that role. Summary Women are underrepresented on the boards of AI companies — especially high-growth, earlier-stage startups. While board diversity is not a panacea, it is one essential element for the companies developing technology with the potential to influence society in profound ways. To increase the number of women board members, companies should: Companies don’t need to trade off technical expertise and governance experience to bring diverse voices into their AI boardrooms. They simply need to look beyond their immediate networks. Methodology This study follows the methodology utilized in the annual Him For Her and Crunchbase studies of diversity on private company boards. Leveraging the Crunchbase database, we identified 409 companies in the AI industry with headquarters in California. Among them were 40 publicly traded companies and 369 privately held companies with at least $50 million in cumulative funding as of July 1, 2024. To ensure that each company’s board profile was current, we included only companies that publish their board of directors on their website. We then referenced company website data, Crunchbase profiles and other publicly available information to characterize the board members. The study included only board directors; board observers and/or advisers were excluded from the data set. For private company boards, we segmented board members according to type of board seat: executive, investor or independent. In the few cases in which founders and past executives remained on the board despite no longer having an operating role at the company, we classified them as “executive directors” in recognition of their original relationship to the company. We identified gender by referencing professional profiles on Crunchbase and, when not available, other sites. About the authors Co-founded by California First Partner Jennifer Siebel Newsom and Olivia Morgan in partnership with the people of California, the California Partners Project is dedicated to championing gender equity across the state and ensuring our state’s media and technology industries are a force for good in the lives of all children. The California Partners Project tracks and spotlights women’s representation on corporate boards and offers an Inclusive Boards Playbook Series developed in partnership with Stanford’s VMware Women’s Leadership Innovation Lab with strategies for board refreshment and culture-building. For more information about the nonprofit organization, visit www.calpartnersproject.org. Connect with the California Partners Project on LinkedIn and Instagram. Crunchbase is a predictive intelligence solution that forecasts private-market movements using the unique combination of live private company data, AI and market activity from more than 80 million users. It helps investors, dealmakers and analysts be the first to find and act on opportunities. To learn more, visit crunchbase.ai and follow Crunchbase on LinkedIn and X. illumyn Impact (formerly Him For Her) is a social impact organization with a mission to diversify the board ecosystem, which is building and shaping the future: from healthcare, to AI, to climate change and beyond. Drawing from its ever-growing referral-based talent network of 8,000+ under-networked executives, a third of whom are women of color, illumyn Impact makes highly curated introductions that bring fresh expertise into the boardroom. illumyn Impact is proud to partner with 100+ leading private equity and venture capital firms. A 501c3 corporation, illumyn Impact operates through the generosity of its founding partners GV, IVP, L Catterton, Mayfield Fund, Silver Lake Partners, SoftBank, Starboard Value and Tiger Global Impact Ventures, and supporters like Brad Feld and Amy Batchelor, Reid Hoffman, Jeff Weiner, Nasdaq and many others. Its sister organization, illumyn, supports underrepresented executives in some of the world’s largest companies through its corporate boardroom excellence fellowship program. Illustration: Dom Guzman
Y Combinator Amps Up Investing In Fintech Startups In 2025, Data Shows
Venture funding to fintech companies has grown this year and concentrated into fewer companies, Crunchbase data shows. Leading the way in backing those startups is a mix of private equity and alternative investors, with venture capital firms next in line. Global venture funding to financial technology startups has already reached $31.6 billion across 2,558 deals in 2025 as of Sept. 11, per Crunchbase data. That’s a 17.5% increase in dollars raised compared to the $26.9 billion raised across 3,508 deals during the same time period in 2024. When it comes to leading or co-leading rounds of $100 million or more, private equity firms including MGX, T. Rowe Price, SurgoCap Partners and Franklin Templeton are the top investors in fintech companies so far this year, Crunchbase data shows. In March, cryptocurrency exchange Binance received a massive $2 billion investment from Abu Dhabi-based investment firm MGX. In April, Plaid, which connects user bank accounts to fintech apps, raised a $575 million round led by Franklin Templeton at a $6.1 billion valuation. And in July, iCapital, a fintech platform for alternative investments and investors, announced that it had raised more than $820 million in a funding round co-led by SurgoCap Partners and accounts advised by T. Rowe Price Associates and T. Rowe Price Investment Management. The financing took iCapital’s valuation to over $7.5 billion. Venture capital firms that led or co-led rounds larger than $100 million include Sequoia Capital, Founders Fund, Paradigm and Ribbit Capital. One fintech company in particular was a recipient of funding from both private equity and venture capitalists: expense management startup Ramp. In July, the buzzy startup announced it had raised a $500 million Series E-2 at a $22.5 billion valuation led by Iconiq Capital. That round came weeks after Ramp announced it had raised $200 million in a Series E round led by Founders Fund, at a valuation of $16 billion. YC picks up the pace This year accelerator Y Combinator has overall invested in 100 fintech companies through Sept. 11 — far more than any other investor. Other active investors in the space include the usual suspects, per Crunchbase data: Antler, FJ Labs, General Catalyst, Andreessen Horowitz, Coinbase Ventures, Accel and QED Investors. Y Combinator isn’t just backing small deals, either. When it comes to rounds greater than $5 million, YC was still the most-active investor this year, participating in 43 fintech funding deals. That’s up 65.4% compared to the 26 deals that YC participated in during all of 2024, signaling a renewed interest on the accelerator’s part in the space. Andreessen Horowitz, which has been a busy startup investor overall in recent years, was next, writing checks across 20 rounds, already more than the 19 fintech deals it participated in during all of 2024. General Catalyst is not too far behind, participating in 17 deals. Sequoia, Accel, QED Investors and FJ Labs each took part in 15 deals for fintech startups. Meanwhile, QED Investors also led or co-led the most post-seed rounds for fintech-related startups. Related Crunchbase query: Related reading: Illustration: Dom Guzman
How Smaller Funds Can Access Top Deals In A Competitive Market
By Andrew Gershfeld For a long time, smaller venture funds leaned on the same advantages: speed, flexibility and deep sector expertise. Conventional wisdom held that while big firms moved slowly, smaller ones could act swiftly, write early checks and provide highly targeted support in a narrow space. That story no longer holds up. Big funds have learned to play smallAndrew Gershfeld The largest firms now look less like monolithic institutions and more like multidisciplinary studios. They hire domain-specific advisers, create sector-focused practice groups, and develop detailed post-investment playbooks, offering the same “tailored” value propositions that once distinguished niche funds, and with more resources. The numbers underline the tilt. In 2024, 30 funds captured close to 75% of all venture dollars. Researchers also found that 74% of persistent VC success comes from better deal flow after early wins. Once a firm builds credibility, it gets preferential access to the most promising startups, and the cycle reinforces itself. Why early access matters more than expertise Money looks the same to every founder. Expertise can be purchased — whether through consultants, advisory boards or strategic hires. What cannot be replicated is the trust built before a round becomes competitive. That is where smaller funds still have an opening. The real advantage is not expertise but access — specifically, early access. By the time a startup is widely circulating its deck, the outcome already favors whoever has been in the room with the founder from the get-go. One clear example is Initialized Capital’s early bet on Coinbase. In 2012, out of a $7 million debut fund, the firm wrote a $300,000 check into the crypto exchange’s seed round, when most investors dismissed the sector as fringe. By the time of its IPO in 2021, that stake was worth $2.4 billion. What set Initialized apart was being in the room early before the deal became obvious. What successful small funds are doing differently Some smaller funds are already adapting. They no longer think of themselves as check-writers waiting for polished pieces. Instead, they operate as active participants in a founder’s journey well before the company raises institutional capital. That shift shows up in specific behaviors. Smaller funds are mapping relationships with accelerators, angels and operators months ahead of a raise. They spend time in communities where founders are still testing ideas. They make introductions — to customers, hires and partners — at a moment when those introductions can change a company’s trajectory. They also mobilize their portfolios. Founders are often the best scouts, and funds that cultivate reciprocal relationships expand their reach in a way no spreadsheet of leads can. Even in competitive areas like AI or biotech, smaller funds can differentiate by serving as a bridge to strategic players. A warm introduction to Nvidia, Microsoft or a top-tier research lab validates a startup long before an institutional round is announced. These are the kinds of moves that earn trust before the larger firms even notice the opportunity. The mindset shift What it comes down to is mindset. Smaller funds can no longer think of themselves as investors selling capital. They need to act as nodes in a network: connecting earlier, engaging more personally, and maintaining persistence long after a term sheet is signed. In today’s market, competition for quality deals has never been fiercer. The firms that succeed won’t be the ones who claim they are faster or more specialized. They will be the ones who build trust before capital is even on the table. Smaller funds can still win, but only by rewriting the playbook altogether. Andrew Gershfeld is a general partner at Flint Capital, a VC firm investing in early-stage startups in AI, cybersecurity and digital health, and helping them expand into the U.S. market.
AI Is Gorging On Venture Capital. This Is Why ‘Physical AI’ Is Next
By Alberto Onetti From venture capital to AI capital? Silicon Valley continues to set the pace for global innovation. In 2025, scaleup investments reached $111 billion. Of that, a staggering $103.5 billion — 93% of the total — went into AI. In a nutshell, “VC investments” in Silicon Valley now essentially mean “AI investments.” For every dollar invested in technology, 93 cents flow into AI. The artificial intelligence sector is literally gorging on venture capital. These are just some of the findings of our latest report, “Physical AI. Shaping the Market of the New Possible,” created by Mind the Bridge alongside Crunchbase and unveiled at our latest Scaleup Summit in San Francisco earlier this month. Whether this proves to be a bubble or a long-term global trend is still unclear. As Crunchbase News Senior Data Editor Gené Teare pointed out at the opening of the summit: “We are two to three years into a new investment cycle. Despite the billions raised by foundation model companies, we are still in the early stages of funding to AI, which will shape the next two decades.” What is clear is that Silicon Valley is betting everything on AI. And when the world’s biggest “casino” goes all in, it’s hard to imagine the game ending any other way. Physical AI: The next leap in the AI revolution But within AI, there are multiple waves. The first major wave was generative AI. After the billion-dollar rounds of OpenAI, Anthropic and Inflection AI in 2023, capital concentrated around just a handful of foundational model players. By 2025, OpenAI ($40 billion) and Anthropic ($13 billion) alone absorbed the lion’s share of the $80 billion invested in the sector. The lower figures of 2024 did not mark a slowdown, but rather a physiological pause after these gargantuan rounds, with players focused on scaling operations and deploying the capital already raised while waiting for the next big wave. And that new wave already has a name: physical AI. Robots that can think, rather than simply execute preprogrammed commands, are becoming reality. The ambition is clear: to move AI beyond the screen and into the physical world. In just nine months of 2025, scaleups in this field have already raised more than $16 billion. Leading the way are Meta’s large-scale investment in Scale AI — a platform focused on training data for real-world applications in autonomous mobility, AR/VR and robotics — as well as Figure AI’s new $1 billion round for humanoid robotics, and Neuralink’s $650 million raise for brain-computer interfaces. This new physical AI wave — born from the convergence of generative AI, autonomous agents and the real world — opens up an almost limitless range of industrial applications. With tens of billions of dollars already flowing into the sector, physical AI carries the promise of revolutionizing manufacturing and beyond. If the trend holds, as I believe it will, Silicon Valley may be at the center of a new transformative cycle: from thinking machines (generative AI) to acting machines (physical AI). AI’s heavy hitters Generative AI scaleups account for 15% of companies but 45% of the capital invested historically in AI scaleups. Meanwhile, the emerging physical AI vertical seems to be following a similar trajectory: 254 scaleups (9% of the total) have already absorbed 18% of all AI funding. These dynamics highlight two key points: Silicon Valley: A century of reinvention Once again, Silicon Valley confirms itself as the undisputed epicenter of global innovation. Over the past century — starting with early defense-related investments in the 1930s and 1940s — it has been the cradle of groundbreaking technological transformations that reshaped the global economy: from integrated circuits and personal computers to the internet, mobile, cloud computing, social media and nowadays AI. Brace yourself for disruption. For more insights on Silicon Valley and physical AI, see Mind the Bridge’s reports, available for free download here. Alberto Onetti Alberto Onetti is chairman of Mind the Bridge and a professor at University of Insubria. He is a serial entrepreneur who has started three startups in his career, the last of which is Funambol, among the five Italian scaleups that have raised the largest amount of capital. He is recognized among the leading international experts in open innovation and has wide experience in setting up and managing open innovation projects — venture clients, venture builders, intrapreneurship, CVCs — with large multinational companies, as well as advising and training on this subject. Onetti has a column on Sifted (Financial Times) and several other tech blogs. Related Crunchbase query: Related reading: Illustration: Dom Guzman
Legal Tech Investment Hits All-Time High With Filevine Funding
Funding to legal tech startups has hit a record high in 2025, driven by investor enthusiasm for AI’s potential to bring more automation to the legal profession. Per Crunchbase data, companies in the legal and legal technology sectors have raised just over $2.4 billion so far in 2025 in seed through growth-stage funding. With over three months left in the year, it’s already the highest annual total on record. Filevine snags $400M A giant funding announcement this week played a big role in pushing the totals higher. Filevine, a provider of legal practice management software, announced Tuesday that it closed on two previously undisclosed rounds totaling $400 million 1. Insight Partners led the first round and joined Accel and Halo Experience Co. to co-lead the second. Founded in 2014, Salt Lake City-based Filevine has expanded its platform over the years to cover more tasks for legal practices. Use cases touted on its website include time tracking, billing, case management software and secure document management, among others. Filevine plans to use the funds in part to continue expanding its AI capabilities. The company said it counts nearly 6,000 customers and 100,000 users. Other big fundraisers, and plenty of seed deals too Several other startups have also closed on sizable funding this year, including: Notably, however, the boom in legal tech venture funding isn’t only about big rounds for prominent unicorns. The intersection of AI and legal work is one of the more active areas for seed funding, a trend we first observed last year and that has continued into 2025 as well. Nothing mysterious here For those seeking an explanation for why legal tech funding is on the rise, there is an obvious one that comes to the fore. In essence: Much legal work is boring and repetitive, which makes it well-suited to offload more tasks to AI. In fact, among all professions impacted by artificial intelligence, legal work is expected to be one of the most affected by automation. In one oft-cited Goldman Sachs report, analysts estimated that an astounding 44% of legal work could eventually be automated. AI-enabled software will be taking on much of this workload. On another side note, in addition to being repetitive, legal work also tends to be expensive, as anyone who has hired a lawyer can probably attest. While it remains to be seen whether AI will reduce the cost of legal services, it should at least free up time for lawyers and support staff to put their billable hours to the most productive use. Related Crunchbase query: Related reading: Illustration: Dom Guzman
VCs Put Customer Service AI On Speed Dial
Most people who’ve ever called customer service share the experience of navigating endless automated prompts in the hopes of getting to a human. For years, it’s been a familiar process for more complex questions and issues. As AI technology advances, however, there are successively fewer cases that demand this. AI chatbots, using voice or text, can handle much of what used to require a person. If startup investors have their way, expect AI agents to be taking on a lot more. In recent months, investors have poured hundreds of millions of dollars into an assortment of companies developing tools to automate customer service-related tasks, Crunchbase data shows. Big rounds on the rise They’re apparently not slowing down either. One of the most highly valued startups in the space — Sierra — just closed a $350 million financing at a $10 billion valuation The 2-year-old company offers tools for organizations to build AI agents to perform customer support tasks. Sierra’s appeal stems in part from its founding team: former Salesforce 1 co-CEO and current OpenAI board chair Bret Taylor and former Google executive Clay Bavor. The company raised $175 million less than a year ago at a $4.5 billion valuation. However, it’s not the only startup in the space attracting investor interest. Rather, San Francisco-based Sierra is one of a growing roster of startups at the intersection of AI and customer service that have secured sizable rounds in recent months. Using Crunchbase data, we put together a sample list of 11 such companies. Taking on repetitive language tasks Rising investor interest around customer service tech is one manifestation of a growing theme: AI taking on tasks that previously resisted automation because they require a sophisticated grasp of language. “Every job is going to be impacted in some way by these language models,” Kent Bennett, a partner at Bessemer Venture Partners and a heavy investor in enterprise AI, told Crunchbase News. For customer service in particular, he sees benefits for employers, including enabling workers to be more productive by offloading mundane tasks to AI. Certainly startups are making this argument. Sierra’s website points to a case involving a headgear brand that built a voice-capable AI agent in a couple weeks to handle product questions. It claims that: “Within 30 days, the agent resolved nearly half of incoming questions that would normally require human input.” Capacity, which offers an automation platform for contact centers, sees a strong use case in tech support, with the ability to auto-respond to common questions and prioritize which issues merit the fastest response. And Forethought, a provider of generative AI tools for customer support, lists several prominent companies that have deployed its offerings, including Grammarly and Upwork. Broad impacts Of course what’s good for startups isn’t always good for the broader job market. As AI tools automate more aspects of customer service, it’s not hard to predict that the end result will be fewer jobs in the space. That is already happening at Salesforce, which CEO Marc Benioff said has cut about 4,000 customer service roles since AI agents now do more of the work. Expect similar announcements to come from early adopters. For those of us who are receiving rather than providing customer support services, meanwhile, it’s still early days for forming opinions on how well AI agents perform in these roles. Probably one sign of success is if we don’t really notice the role of AI and simply manage to get an accurate response without having to wait. Related Crunchbase query: Illustration: Dom Guzman