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Crypto Custody Startup BitGo Files Confidentially To Go Public
Crypto custody startup BitGo filed confidentially to go public on Tuesday, the company said. It is not yet clear on which exchange Bitgo plans to offer its shares, or what its price range will be. Founded in 2013, Palo Alto, California-based BitGo has raised a known $170 million in funding, per Crunchbase data. The company aims to securely store and manage cryptocurrency and other digital assets In August 2023, BitGo raised a $100 million Series C round at a $1.75 billion valuation. It was a step up in valuation from what BitGo would have been valued at had it been acquired by digital asset investment firm Galaxy Digital in a proposed $1.2 billion acquisition that was called off in 2022. The company went on to raise another corporate round of funding in January 2024 for an undisclosed amount, according to Crunchbase data. Bitcoin prices soared to over $100,000 in 2024, and currently trades at nearly $119,000 with projections it could go even higher in 2025. And after many headlines about regulation in the industry, the U.S. passed what is being described as the country’s “first major national cryptocurrency legislation.” The legislation is expected to be signed into law later this week. A thawing IPO pipeline? After an IPO drought, we’re seeing a flurry of filings in 2025, with more potentially planned in the coming year. Cryptocurrency exchange Kraken is expected to go public via an initial public offering sometime in early 2026. San Francisco-based collaborative design platform Figma on Monday outlined the plans of its IPO, revealing it intends to raise nearly $1 billion. But other fintech and crypto-related companies have already gone public so far in 2025. In early June, shares of Circle closed up 168% at $83.29 in their first day of trading on the New York Stock Exchange, minting the stablecoin issuer with a market cap of around $16.7 billion and renewing hopes for an IPO market rebound. As of July 22, the stock had more than doubled from its first-day closing — trading at over $194 per share. Digital bank Chime went public on June 12, and came out swinging. Chime’s shares shot up 37% in first-day trading on Nasdaq, closing at $37. As of July 22, the stock was trading at just over $33. Related reading: Illustration: Dom Guzman
Startup M&A Crests Higher In First Half Of 2025
So far, this has been a pretty good year for startup acquisitions. Acquirers made just over $100 billion worth of disclosed-price startup purchases 1 in the first half of 2025, per Crunchbase data. That’s a whopping 155% increase from the same period last year, showing buyers are increasingly willing to write big checks for sought-after companies. Notably, roughly a third of this year’s total comes from a single deal: Google’s planned purchase of cybersecurity unicorn Wiz for a record-setting $32 billion. But there were other startups selling in multibillion-dollar acquisitions as well, including device designer Io and automation software provider Moveworks. Dealmaking gets more frenetic Deal count, meanwhile, has held steadier, with the number of announced acquisitions hovering in the mid-400s for the past three quarters. The number of M&A deals tends to be less influenced by market conditions, since buyers are inclined to go bargain hunting during down cycles and compete aggressively for hot companies during bullish ones. Lately, the ambience leans more frenetic, particularly as pertains to AI. This was evidenced this past week, with the drama around AI coding provider Windsurf. The startup was about to sell to OpenAI for $3 billion until Google made a deal to hire its CEO and co-founder, Varun Mohan, and pay $2.4 billion for compensation and licensing.Then on Monday, AI startup Cognition announced it would acquire Windsurf. AI was also the draw for the largest Q2 deal, OpenAI’s $6.5 billion acquisition of Io, a design startup co-founded by Jony Ive and focused on AI-powered devices. Even with all the excitement around AI, however, the majority of M&A spending this year hasn’t gone to the space. Per Crunchbase data, only around $15 million of disclosed-price acquisitions were for AI startups in the first half of this year. (However, that excludes Wiz, which isn’t classified as an artificial intelligence company but does list AI security as one of its focus areas.) Biggest H1 M&A deals So where is M&A spending concentrating? To get a sense, we used Crunchbase data to aggregate a list of 13 of the largest acquisitions in the first half of this year. As shown above, besides AI, enterprise software fared well. Top deals in the space include Moveworks’ $2.85 billion acquisition by ServiceNow, as well as accounts payable platform Melio’s $2.5 billion sale to Xero. In the healthcare space, electronic health record software provider Modernizing Medicine delivered one of the biggest outcomes, selling a majority stake to private equity firm Clearlake Capital Group at a reported $5.3 billion valuation. Smaller and stealthier deals add up The vast majority of startup acquisitions don’t have a disclosed price. But they can add up. Oftentimes, these deals involve large-cap acquirers and well-funded startups. Examples from 2025 include Stripe’s acquisition of crypto wallet startup Privy, Snap’s purchase of school scheduling app Saturn Technologies, and Zscaler’s acquisition of cloud security startup Red Canary, It helps acquirers that, four years after the venture funding peak in 2021, there’s still a large pipeline of funded companies taking a serious look at exit options. If current trends continue, we should see a growing number of them accomplishing that goal through M&A. Related Crunchbase queries: Related reading: Illustration: Dom Guzman
In Q2, Mexico Surpasses Brazil In Venture Dollars For First Time In Over A Decade
Historically, Brazil has been the powerhouse in Latin America when it comes to venture capital funding. But in the second quarter of 2025, Mexico emerged as the leader in terms of dollars raised in the region, per Crunchbase data. It’s the first time since the second quarter of 2012 that Mexico startups brought in more venture dollars than their Brazilian counterparts in Latin America, our data indicates. Mexico-based startups raised $437 million in the second quarter, up 85% year over year and 81% quarter over quarter. Brazil-headquartered startups brought in $350 million, down 23% year over year and a 14% dip quarter over quarter. The largest raise in Mexico — and Latin America as a whole — was announced on June 30, the last day of the quarter. That was a $170 million Series C round for Mexico City-based fintech startup Klar — believed to be Mexico’s largest digital bank —- that valued the company at $800 million. In general, a boom in late-stage and growth funding helped buoy the region for the period, Crunchbase data shows. Startups in Latin America raised a combined $961 million across seed- through growth-stage deals in the second quarter, up 16% year over year and 13% compared to the first quarter. Of that total, $547 million went into late-stage and growth deals, up 102% year over year. That’s nearly exactly double the $273 million in late-stage and growth financings the region saw in the first quarter of this year. For perspective, we charted out total investment, color-coded by stage, for the past 10 quarters below. Round counts declined sequentially and year over year across angel, seed and early stages. We expect the Q2 deal counts to rise somewhat over time, however, as seed rounds in particular are commonly reported weeks or months after they close. Table of contents Late-stage boom While Klar’s venture round was the largest financing in Latin America, it was not the only nine-figure raise the region saw in the second quarter. Other large deals included Chilean fintech Toku raising $48 million in a Series A round and Mexican e-commerce aggregator Merama’s $45 million raise. Investor POV Funding in Latin America is certainly down compared to 2020-2022. However, there are some investors who remain loyal to the region. Miguel Armaza, co-founder and general partner at New York-based Gilgamesh Ventures, believes that investors who’ve exited LatAm were often tourists, and not truly committed to the region. Armaza blames the reduced appetite on LP preferences for investing in the U.S. and the lack of IPO activity in Latin America, something he predicts will improve “notably in the next 12-18 months.” For its part, Gilgamesh is still investing in the region, he said, but acknowledges that it’s seeing “a bit more activity in the U.S.” The firm backs startups focused exclusively on Brazil or Mexico because, in his words, “these markets have the scale to deliver VC-sized outcomes.” “However, over the past couple of years, we’ve increasingly invested in a newer category: startups designed from day one to operate regionally or globally,” he told Crunchbase News. “Unsurprisingly, many of these newer ventures are AI-first, and we’ve already backed a number of AI-centric startups in the region.” Armaza also argues that the investment pace in LatAm is roughly aligned with 2019-2020 thanks mostly to regional investors. “The pullback of certain international and U.S.-based investors has been partially offset by new local funds stepping up,” he said. “Today, most strong founders in Brazil can raise their seed rounds entirely locally, often within just two to three neighborhoods in São Paulo. This local ecosystem strength is a significant positive.” Mike Packer, partner at Alexandria, Virginia-based QED Investors, said his firm still sees “incredible opportunity” in the region, especially in Brazil and Mexico, but also in countries like Argentina. “Because of the liquidity cycle and the general lack of exits in the ecosystem, companies are trying to figure out how to think bigger earlier,” he told Crunchbase News. As such, companies are increasingly learning from other geographies. For example payment companies such as Ebanx and dLocal are expanding to Africa and Asia. For its part, in the first half of 2025 QED focused on seed and Series A financings but it has also expanded its focus to include more Series B companies. “The best companies here look really healthy, they’re growing fast, they’re close to profitable, if not already profitable and they’ve proven a level of scale that gives us lots of comfort about execution abilities and market size,” he said. Nicolas Szekasy, co-founder and managing partner at São Paulo-based Kaszek, said his firm’s investment pace has accelerated in 2025 compared to the previous two years. “The evolution of the Latin American tech ecosystem over the past 25 years has been extraordinary — from almost nothing to a vibrant, robust environment,” he told Crunchbase News. “Yet, when you look at the data, the region is still massively underpenetrated.” And, despite Mexico’ s unusually good quarter, Szekasy still believes that Brazil remains Latin America’s largest and most mature ecosystem, and that São Paulo “is arguably Latin America’s tech capital.” However, Kaszek invests across the region — half of its investments are in Brazil, followed by Mexico, then Argentina, Colombia, Chile and the rest of the region. Szekasy also believes that investors have not necessarily backed off from LatAm. “Some firms have been consistently active in Latin America for years,” he said. “Others came and left, and new ones are arriving now.” Still, Szekasy acknowledged that 2021 was “a global VC bubble” with some investors participating during that time indeed being more “tourists.” Looking ahead, in his view, the resilience of Latin American founders is part of what makes the region so attractive. “They’ve been building through volatility for decades — navigating recessions, inflation, currency devaluations and regulatory swings,” he said, citing MercadoLibre and Nubank as prime examples. “Both were born in adversity and are now worth a combined $200 billion in market cap,” he said. “Their opportunity ‘signal’ was far stronger than any surrounding ‘noise.’ ” Going in earlier Brian Requarth, general partner at early-stage-focused Latitud, said his firm continues to maintain its investment pace, closing 25 deals since it started deploying in Q4 2023. “What has changed is that we’re going even earlier,” he said. “Some of our investments are at the pre-inception stage, where we back exceptional founders before they’ve even landed on a thesis.” While Latitud remains sector agnostic, Requarth acknowledges that nearly every investment the firm has made in 2025 “has some AI angle.” Like Gigalmesh and QED, Latitud has invested heavily in Brazil, but also in companies based in Mexico, Colombia and Argentina. One recent shift in the firm’s strategy is to allocate more capital to Latin American founders who are building companies in the U.S. “We’re seeing world-class talent from the region moving to San Francisco and launching globally ambitious startups,” Requarth said. “That’s a wave we’re leaning into.” Overall, he believes “this is a moment of recalibration” in Latin America, “not retreat.” He added: “For those who are close to founders and understand the dynamics of the region, there’s still an enormous opportunity.” Methodology The data contained in this report comes directly from Crunchbase, and is based on reported data. Provisional data reported is as of July 3, 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. Crunchbase 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 Crunchbase 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. Crunchbase 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. Crunchbase 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 “Series [Letter]” 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 “venture” round. (So basically, any round from the previously defined stages.) Illustration: Dom Guzman
Report: Ex-Sequoia Partner On Track To Raise New $400M+ Venture Fund To Invest In Europe
Former Sequoia Capital partner Matt Miller is nearing the close of a new $400 million venture fund to invest in European startups, the Financial Times reported. Miller has already secured $355 million in commitments from institutional investors for the new London-based fund, the report said, and plans to focus on European AI and B2B startups at Series B. Moving to London in 2021 to lead Sequoia’s European expansion, Miller left the firm in December last year after a 12-year stint with the company, following a boardroom dispute at Sweden-based portfolio company Klarna. While at Sequoia, he led the firm’s investment in enterprise cloud provider Confluent, which went public at a valuation of $11 billion in June 2021 — a deal that helped secure his presence on Forbes’ Midas List Europe. He also led investments in U.K.-based semiconductor company Graphcore and Berlin-based workflow automation startup n8n, among others. “I have made the decision to start my own fund focused on the great founders of Europe,” Miller wrote last year when he announced his decision to start his own fund. “It has been a dream of mine to be an entrepreneur again and I am excited to build something specific for this region that I love.” His new fund comes amid a sluggish period for European venture funding. Around 1,200 startups based in the continent altogether raised roughly $12.6 billion last quarter, Crunchbase data shows — flat quarter over quarter and down 24% year over year. The region’s leading countries also shifted in Q2. For the first time since 2012, Germany-based startups led the region’s funding totals, leapfrogging the U.K. Related reading: Illustration: Dom Guzman
The Week’s 10 Biggest Funding Rounds: Fintech Attracts Biggest Rounds While AI Holds Strong
Want to keep track of the largest startup funding deals in 2025 with our curated list of $100 million-plus venture deals to U.S.-based companies? Check out The Crunchbase Megadeals Board. This is a weekly feature that runs down the week’s top 10 announced funding rounds in the U.S. Check out last week’s biggest funding rounds here. This week was a productive period for fintech funding, with two companies in the space — iCapital and Bilt Rewards — pulling in the largest rounds. In addition, we also saw sizable financings for companies in a range of other industries, including micromobility, drug discovery and green steel. 1. iCapital, $820M, fintech: iCapital, a fintech platform for alternative investments and investors, raised more than $820 million in a funding round that took its valuation to over $7.5 billion. SurgoCap Partners and accounts advised by T. Rowe Price co-led the financing for the New York-based company. 2. Bilt Rewards, $250M, fintech: Bilt Rewards, a rewards program for home renters to use with local merchants, raised $250 million in a venture round led by General Catalyst and GID. The financing sets a $10.75 billion valuation for the New York-based company. 3. Also, $200M, micromobility: Also, a micromobility startup spun out of Rivian, raised a reported $200 million in a new financing led by Greenoaks at a $1 billion valuation. The Palo Alto, California-based company is developing small EVs, with an initial product launch anticipated next year. 3. Varda, $187M, spacetech and drug discovery: El Segundo, California-based Varda, a self-described “microgravity-enabled life sciences company,” raised $187 million in a Series C led by Natural Capital and Shrug Capital. The company bases its research on the finding that materials including active pharmaceutical ingredients crystallize differently in space, enabling novel drug formulations. 4. MaintainX, $150M, equipment maintenance: MaintainX, which operates an equipment maintenance and asset management platform, raised $150 million in a Series D backed by a long list of investors including Bessemer Venture Partners and Bain Capital Ventures. The financing boosted the San Francisco-based startup’s valuation to $2.5 billion. 5. Harmonic, $100M, AI: Harmonic, a developer of AI mathematical reasoning models, announced a $100 million Series B financing led by Kleiner Perkins. The round brings total funding to date for the 2-year-old, Palo Alto, California-based company to $175 million, per Crunchbase data. 6. Neuros Medical, $56M, neurostimulation: Neuros Medical, developer of an electrical nerve stimulation system used to treat chronic post-amputation pain, raised $56 million in a Series D round. EQT Life Sciences led the financing for the Aliso Viejo, California-based company. 7. ServiceUp, $55M, vehicle repair: Los Gatos, California-based ServiceUp, developer of a platform for fleet operators to manage repairs and maintenance, raised $55 million in a Series B round led by PeakSpan Capital. 8. Renasant Bio, $54.5M, biopharma: Renasant Bio launched with $54.5 million in seed funding to develop treatments for autosomal dominant polycystic kidney disease. 5AM Ventures led the financing for the Berkeley, California-based startup. 9. (tied) Boston Metal, $51M, green steel: Green steel maker Boston Metal announced that it raised $51 million in a convertible note investment from existing investors including BHP Ventures, Breakthrough Energy Ventures, Piva Capital and SiteGround. The funds will be used in part for a metals plant in Brazil, slated to come online next year. 9.(tied) Spacelift, $51M, enterprise software: Redwood City, California-based Spacelift, developer of an infrastructure orchestration platform for enterprises, raised $51 million in Series C funding led by Five Elms Capital with participation from Endeavor Catalyst and Inovo.vc. Methodology We tracked the largest announced rounds in the Crunchbase database that were raised by U.S.-based companies for the seven-day period of July 4-11. Although most announced rounds are represented in the database, there could be a small time lag as some rounds are reported late in the week. Illustration: Dom Guzman
Alt Investment Platform iCapital Raises $820M At $7.5B Valuation With An Eye Toward Acquisitions
iCapital, a fintech platform for alternative investments and investors, has raised more than $820 million in a funding round that takes its valuation to over $7.5 billion, the company announced on Thursday. That’s up from the just over $6 billion it was valued at in 2021 after raising $50 million in a round led by WestCap. Founded in 2013, New York-based iCapital has raised over $1.5 billion in total funding to date, per Crunchbase data. SurgoCap Partners and accounts advised by T. Rowe Price Associates and T. Rowe Price Investment Management co-led iCapital’s latest financing. Existing backers Temasek, UBS and BNY also participated in the round. iCapital says it plans to use its new capital toward strategic acquisitions, geographic expansion and further investment in its technology. The fintech has already bought more than 23 companies, including AltExchange and Parallel Markets. Presently, it has 1,875 employees across 16 global offices. The company services $945 billion worth of assets globally on its platform, saying its interface “unifies” onboarding, document workflows, performance data and regulatory compliance. It aims to help wealth managers invest in private markets, structured investments and annuities alongside traditional holdings. For asset managers, the company offers a digital marketplace, data management, AI-powered services and tools, and sales distribution support and reporting. The funding announcement comes two days after The Bank of New York Mellon Corp. tapped iCapital “to beef up its alternative investment capabilities.” Crunchbase data shows that investment for U.S. companies in financial services industry categories has held up at robust levels in recent quarters. In particular, wealthtech has been attracting investors as of late. In early July, Savvy Wealth raised a $72 million Series B, and in April Altruist landed a $152 million Series F at a $1.9 billion valuation. Related Crunchbase query: Related reading: Illustration: Dom Guzman
Germany Leapfrogs UK To Lead European VC Investment In Q2 As Region’s Funding Settles
Funding to Europe startups settled in Q2, coming in flat quarter over quarter, but down 24% from the peak second quarter in 2024, Crunchbase data shows. A total of $12.6 billion was raised by around 1,200 startups across Europe last quarter, with funding amounts comparable with the previous two quarters. And for the first time since 2012, Germany-based startups jumped ahead of the United Kingdom by amounts invested in a quarter. Still, the largest funding in Q2 did not go to a startup from Germany. It was a $1.25 billion round to Turkey-based mobile game developer Dream Games. After Dream Games, many of Europe’s largest rounds this past quarter were in deep tech sectors including defense, quantum computing, energy, robotics, aerospace and therapeutics, as well as in fintech and software services. Berlin-based AI defense tech Helsing raised the next-largest round — a $694 million Series D — and Spain-based quantum software developer Multiverse Computing followed with a $218 million Series B. A total of $2.8 billion was invested in Germany-based startups, while U.K.-based companies raised $2.5 billion — the lowest quarter on record since 2019. Startups based in France, the third-largest European country for investment, raised $1.8 billion. Table of contents Europe posted strong M&A As it did globally and in North America, startup M&A in Europe gained steam in Q2, totaling $7.2 billion across 172 exits. Four of the 18 venture-backed companies globally that were acquired for $1 billion or more in Q2 hailed from Europe, Crunchbase data shows, with companies from many different sectors exiting. Those acquisitions include: Late stage In Q2, around $5.7 billion was invested across 75 deals into Europe startups at growth stage, according to Crunchbase data. That represented around 10% of global late-stage venture funding, the smallest proportion compared to other funding stages. Early stage Early-stage companies in Europe raised $5 billion across more than 270 funding rounds last quarter. European funding was 19% of global early-stage funding and just over a third as large as North America at $14.3 billion. Seed European seed funding totaled $1.9 billion in Q2 across 845 seed rounds, representing 19% of global seed funding and a third the size of North America seed funding at $5.9 billion. Europe subsides in a global context Europe’s share of global venture capital subsided in the first half of 2025 to just 13%. That’s well below the region’s 19% share of global funding in H1 2024, per Crunchbase data. Funding for the first half of 2025 was down 11% year over year in Europe. North American funding, by contrast, surged year over year in the first half of the year; $145 billion was invested in H1, with particular investor enthusiasm for AI companies. Based on an analysis of Crunchbase data, late-stage financing in Europe was a far smaller proportion of global funding compared to funding at earlier stages, prompting the question: Does a less robust late-stage funding environment make it more difficult for European companies to compete on a worldwide basis? Methodology The data contained in this report comes directly from Crunchbase, and is based on reported data. Provisional data reported is as of July 3, 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. Crunchbase 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 Crunchbase 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. Crunchbase 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. Crunchbase 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 “Series [Letter]” 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 “venture” round. (So basically, any round from the previously defined stages.) Illustration: Dom Guzman
VC-Backed Startups That Stitch AI And Fashion Together See Strong Investor Interest
Venture capitalists, as a group, aren’t exactly notorious for their keen fashion sense, but many have taken a strong interest in backing startups that thread AI technology into the apparel industry. Overall numbers are still relatively small for this emerging sector, but venture investment in fashion-related AI startups has risen or held steady in the past five-plus years. That’s even as VC funding generally has fallen from its pandemic-era highs, Crunchbase data shows. Funding to startups at the intersection of AI and apparel spiked to $162 million in 2022 — when China-based Zhiyi Tech, which helps clothing brands spot and predict fashion trends, raised $100 million alone — and has clocked in around $100 million annually since then. Investors’ interest in fashion-related tech makes sense, given that as a species, we’re estimated to spend an astonishing $1.8 trillion globally each year on attiring ourselves. That figure is projected to climb to $2.3 trillion by 2030. The true economic and environmental costs of the fashion industry are of course much higher, by the time you account for production waste and pollution, the resources that go into shipping clothes halfway across the world, and frequent returns and exchanges — not to mention concerns about labor conditions in garment factories. We identified dozens of companies operating at the fashion-and-AI intersection that raised venture funding in recent years, many of them working on issues such as more efficient manufacturing or faster trend-spotting. Some offer AI-driven creative design tools, others are focused on AI-enabled demand prediction or manufacturing, and several companies offer personalized shopping or customized garments. Let’s take a closer look. Predicting fashion (before it’s no longer fashionable) The best-funded startup at the intersection of fashion and AI appears to be Zhiyi Tech. The Xiaoshan, China-based company, which works with many China-based apparel companies, searches the internet and social media for trending designs, and combines that with sales data from e-commerce platforms to help brands quickly capitalize on viral trends. Investors appear to be particularly eager to back companies that tap AI to predict fashion trends. In the U.S., another top funding recipient is Finesse, which has raised close to $45 million total from investors. The Los Angeles-based startup describes itself as the “first AI-led fashion house” and creates fast-fashion clothes based on social media votes, shopping data and viral trends spotted by its machine learning technology. “I call it ‘Zara meets Netflix,’ ” CEO and co-founder Ramin Ahmari told Crunchbase News in 2021, when the company raised its $4.5 million seed round. “We all love fashion and the beauty industry, but fashion is a huge world largely untouched by technology. There are now new trends in efficiency and data, and Finesse is all about using data to reduce the tons of waste in fashion.” While reviews of its clothes have been mixed, the company went on to raise a $40 million Series A led by TQ Ventures. Another well-funded startup in the fashion demand prediction realm is Syrup Tech. The New York-based company has raised $25.1 million total for its AI-driven predictive software used by fashion brands. AI fashion design and creation tools Fashion designers are also increasingly using generative AI to help them design clothes and make 3D digital mockups of items before they ever go into production. Along those lines, funded startups include Raspberry AI, which earlier this year raised $24 million in an Andreessen Horowitz-led Series A. The New York-based startup’s platform turns designers’ sketches into photorealistic renderings, showing in rich detail how products will look, fit and drape in real life. Another AI fashion design tool is AI.Fashion. The Los Angeles-based startup makes AI-driven tools for virtual photoshoots and fashion content creation. It raised a $3.6 million seed round led by Neo in February 2024. BLNG, meanwhile, applies generative AI to jewelry design, converting sketches or text prompts into photorealistic 3D renders. The Los Angles-based company has raised $4.5 million, including a $3 million seed round in April, per Crunchbase. Discovery and personalization AI is also changing how consumers discover clothing and footwear. Startups in this category use machine learning to personalize recommendations, improve product tagging and offer smarter shopping experiences for consumers to help them better find what they want. Among the most high-profile recently funded companies in this cohort is Daydream, an AI-powered shopping platform founded by e-commerce veteran Julie Bornstein, who previously founded The Yes and sold it to Pinterest three years ago. Her new startup makes personalized fashion recommendations through a chat-based interface. The San Francisco-based company raised a $50 million seed round in June from investors including Forerunner Ventures and Index Ventures. Other companies in this subsector include Lily AI. Its platform translates retailer product attributes into more consumer-friendly language, with the aim of improving site search and personalization. The Mountain View, California-based startup has raised $71.9 million to date. Other funded fashion discovery startups include: Virtual try-ons, precision fit and customization Tracking down what looks like the perfect dress to wear to that summer wedding reception is one thing. Knowing it will actually fit and look good on you when it arrives is another. Companies tackling that problem include several virtual try-on startups that aim to make it easier to gauge how a garment will fit before you buy it online — both to reduce buyer frustration and to reduce the chances of costly returns for retailers. Along those lines, virtual try-on and social shopping app Doji last month raised $14 million in a seed round led by Thrive Capital. The San Francisco-based company’s app lets users create avatars for virtual try-ons of clothing. Similarly, Paris-based Veesual offers diverse AI-generated virtual models to showcase how clothes look on different bodies. The startup has raised $7.6 million to date, mostly in a seed round last year led by AVP and Techstars. A smaller subset of startups is working on actually personalizing the size and fit of shoes and clothes. Among the most notable of the bunch is New York-based IAMBIC, which uses AI to make precision-fit footwear. The company, whose completely custom sneakers were named to TIME’s Best Inventions list in 2023, has raised $1.3 million through research grants. Another is New York-based Laws of Motion, a seed-funded DTC brand that has raised $10.2 million on the promise of precision-fit clothing for women through virtual body scans and AI technology. Smart manufacturing and supply chain optimization Other startups are turning to AI to improve the way garments are made. Funded companies in this group include those working on demand forecasting, advanced textiles and material optimization, process automation, and textile recycling. For example, Smartex.ai installs AI and computer vision technology into textile factories to help them automatically detect textile defects. The Portugal-based startup has raised $27.6 million in funding, per Crunchbase. Several startups focused on fashion-related sustainability have also raised funding in recent years. They include Matoha Instrumentation, which builds AI-enabled infrared scanners for rapid textile sorting to support recycling. The London-based startup raised £1.5 million in an April seed round. Refiberd, meanwhile, uses AI and hyperspectral imaging to enable intelligent sorting in textile-to-textile recycling. The Cupertino, California-based company has raised $2.7 million total from venture rounds and grants. There’s also some funding in the area of new textile technologies developed with the help of AI. One example is Solena Materials, which raised a $6.7 million seed round in May. The startup, also based in London, uses AI-driven protein sequence design to engineer new biodegradable fibers produced by microbes. Looking ahead: AI will stay on trend With AI overall en vogue with investors, startups weaving that technology into the fashion industry seem poised for more growth. We expect that as clothing brands continue to battle supply-chain pressures, consumer churn and shifting online behavior, AI tools will remain on trend in coming seasons. Related Crunchbase query: Related reading: Illustration: Dom Guzman