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Cybersecurity Startup Investors Pulled Back In Q3
After a lively first half of the year for cybersecurity startup funding, investors pulled back some in the third quarter. In total, investors put just over $3.3 billion globally into seed- through growth-stage rounds for cybersecurity-focused companies, per Crunchbase data. That’s about a third lower than the prior quarter, a robust period for dealmaking, but still about a third above year-ago levels. Deal counts also declined sequentially in Q3, but still exceeded year-ago totals. Megarounds of note As usual, much of the quarter’s fundraising tally came from a few big rounds. For Q3, the largest round went to Quantinuum, a quantum computing unicorn that isn’t a pure-play cybersecurity company but does cite encryption and data protection among the core use cases for its technology. The Broomfield, Colorado-based company, which was spun out of Honeywell, closed a $600 million Series B in August led by Nvidia’s venture arm. The next-largest financing was a $230 million Series C for Austin, Texas-based Ontic, a provider of intelligence tools for corporate security. In third place was San Francisco-based Vanta, an AI-enabled security and compliance platform that pulled in a $150 million Series D. For a broader listing, below we ranked 10 of the largest cybersecurity-related financings of the quarter. Exits The quarter also brought a couple good-sized startup exits of both the IPO and M&A variety. Netskope, a cloud-security provider, delivered on the IPO front, raising more than $900 million in a well-received September debut. Founded in 2012, the Santa Clara, California-based company previously raised $1.4 billion in early- through late-stage financing. As for acquisitions, the largest was Tokyo-based Mitsubishi Electric’s purchase of San Francisco-based Nozomi Networks, a 12-year-old company focused on protecting critical infrastructure from cyber threats, in a deal reportedly valued at around $1 billion. Ups and downs So are these still bullish times for cybersecurity investment? While investment to the space was down sequentially this quarter, the drop does not appear sufficiently dramatic or prolonged to draw broad conclusions. On public markets, major cybersecurity indexes continue to perform well, and, among newcomers, Netskope has held steady. So, that looks encouraging. On the M&A side, we’re also still waiting for a final conclusion of Google’s planned $32 billion acquisition of cybersecurity provider Wiz, announced in March. If the deal passes regulatory muster and closes, it would rank as the largest startup acquisition to date and mark another upbeat development for the security sector. For now, we’ll keep an eye out to see if there are any stronger headwinds portending a shift in direction for the space. Related Crunchbase list and query: Related reading: Illustration: Dom Guzman
Deel Lands $300M At $17.3B Valuation Amid Spying Saga, Uptick In HR Software Funding
HR and payroll platform Deel has raised $300 million in fresh funding at a $17.3 billion valuation. The deal was led by new investor Ribbit Capital and previous investors Andreessen Horowitz and Coatue Management. Other investors including General Catalyst and Green Bay Ventures also participated. The round for New York-based Deel comes as funding for HR tech startups overall has seen an uptick this year. Through mid-September, HR software startups globally have raised $1.9 billion in venture funding this year, per Crunchbase data. That’s just under the $2 billion raised by such startups in all of 2024. U.S.-based human resources software startups have raised a combined $1.2 billion, up from the $1.1 billion raised last year. Still, this year’s figures are a far cry from 2021’s banner figures, when startups in the sector raised $10.5 billion globally, per Crunchbase data. Deel’s new round also follows an ugly and closely watched corporate espionage scandal between Deel and rival Rippling, which itself raised a $450 million Series G round at a $16.8 billion valuation earlier this year, despite the drama. Investors were apparently more interested in Deel’s business metrics than the Rippling saga. Deel said it posted $100 million in revenue last month for the first time, and closed out its third consecutive year of profitability. It hit $1 billion in ARR earlier this year and says it now counts more than 37,000 businesses as customers, processing $22 billion in payroll a year. The company, which has now raised nearly $1.3 billion from investors since its founding in 2019, said it will use the cash infusion for strategic acquisitions, to expand its geographic reach to more than 100 countries by 2029, and to accelerate its automation and AI-powered offerings. “Deel — itself a fully remote, global company with employees in over 100 countries — is uniquely positioned to build products for global expansion,” Ribbit Capital founder Micky Malka said in a statement. “The company and its leadership have a limitless opportunity ahead of them.” Related Crunchbase query: Related reading: Illustration: Dom Guzman
These Are Some Leading Spaces For AI Investment At Seed And Early Stage
Given that a majority of U.S. startup investment goes to artificial intelligence companies these days, there’s clearly a wide variety of newcomers getting funded. So where are seed- and early-stage investors placing their bets? To shed some light on this question, we analyzed a dataset of AI-focused startups that raised at least a few million dollars in seed- or early-stage funding this year. While it was a varied crew, a few areas stood out as particularly popular. These include: back-office tools, robotics, drug development and healthcare automation. Stepped-up early-stage funding to these areas comes as the most prominent generative AI startups have largely matured to later stage. Much of the current early-stage generation of startups, by contrast, is focused less on broad, general purpose AI models and more on solving problems and automating tasks within specific industries. Without further ado, here are the four areas that caught our eye. No. 1: Back-office automation Back-office automation was one of the more popular themes for AI-related seed- and early-stage investment, per Crunchbase data, and seemingly for good reason. Tasks related to accounting, payroll, compliance and other back-office functions pose a significant cost to all businesses. But back-office burdens can be particularly daunting for smaller businesses, which lack the economies of scale of larger rivals. As such, that’s where a number of startups are focusing their endeavors. For a sense of where funding is going, we put together a sample list of 10 companies that raised seed- or early-stage rounds this year with a back-office automation focus. No. 2: Robotics Anyone who’s ever performed a dull, dirty or difficult physical task has probably fantasized about having a robot take over. In recent quarters, a surge of funding to startups at the intersection of AI and robotics means that fantasy is now poised to move at least closer to reality. Per Crunchbase data, we’re seeing a particularly strong wave of investment activity at seed and early stage. To illustrate, we put together a sample list of 14 companies funded so far this year. No. 3: AI tools for healthcare High on the wish list of many health providers is the ability to spend more time providing care and less on recordkeeping and compliance-related tasks. A slew of recently funded startups at the intersection of healthcare and AI are looking to assist in this goal with tools to automate some of the more tedious and repetitive tasks. To illustrate, we used Crunchbase to assemble a representative sample list of 10 companies in this area that raised seed- or early-stage funding. That list, however, is only a small portion of the full population of startups in the space funded this year, for which we also provide a sample query. No. 4: Drug development and medical research The intersection of AI and biotech is also a vibrant area for seed- and early-stage funding. So far in 2025, this has manifested most noticeably in a series of megarounds for Lila Sciences, a Cambridge, Massachusetts, startup working on what it calls a “scientific superintelligence platform” for life sciences, chemistry and materials science. Beyond Lila, however, a raft of other startups in AI and biotech have also raised good-sized seed- and early-stage rounds this year. Below, we aggregated a sample of 10 companies that stood out. But wait, there’s more While this article focused on four investment themes, there were quite a few more that stood out in our query. These included legal tech, go-to-market offerings, chip design, and innovations around AI-enabled voice and audio. As is typical at seed and early stage, the promise of all these areas sounds quite enticing. We’ll see in a few years, however, if visions of a less tedious back-office, more robot-enabled workforce, more streamlined healthcare system, and faster and more effective medical research come to fruition. Related Crunchbase lists and queries: Illustration: Dom Guzman
The Great ‘AI Bubble’ Debate
A question that appears to be polarizing the tech community, once again: Are we in a bubble? Bubbles emerge when a market becomes irrationally optimistic, causing the price of assets to diverge from their fundamental value. The critical moment is the formation of a recursive loop where price growth creates FOMO that pulls in more capital that further accelerates price growth. The end result is an increasingly unstable house of cards. AI investment differs in two major ways from this historical pattern: First, unlike previous bubbles (e.g. dotcom) there is significant revenue being generated by the underlying companies — implying real fundamental value. While questions have been raised about how much of this revenue is just recirculated capital, the growth is undeniable. Second, these are private companies that aren’t easily accessed by investors, and the biggest names are selective about who gets on their cap table. Typically, bubbles play out in more liquid public markets, where sentiment can drive extreme swings in buy and sell activity. Price vs. value The final question: To what extent has price diverged from value? For clarity, valuation is an opinion on the future, whereas pricing reflects the current fundraising market, so this is a mostly subjective issue. One investor might believe foundation models are the future of how we engage with technology, while another might just see them as an evolution of SaaS. Both are valid, and the speculative nature of VC means there should always be a range of perspectives. However, venture capital is also influenced by herd behavior, with inflows being influenced by simple narratives about opportunity. Research shows that where investors concentrate on a particular sector, it tends to push up prices without implying better outcomes in future. That appears to align with venture capital activity in AI, as investors complain more frequently about the terms they’re faced with on competitive deals. So, there is definitely some discomfort in the market. There is significant enthusiasm for AI, genuine optimism about the future, but also concern for how deals are playing out. Investors are gambling huge amounts of capital on the future of AI, too afraid to make an error of omission. A risk bubble The best way to consider might be in similar terms to Bill Gurley’s take on the venture market in 2015, which is that it’s a risk bubble, rather than a valuation bubble: “All of this suggests that we are not in a valuation bubble, as the mainstream media seems to think. We are in a risk bubble. Companies are taking on huge burn rates to justify spending the capital they are raising in these enormous financings, putting their long-term viability in jeopardy. Late-stage investors, desperately afraid of missing out on acquiring shareholding positions in possible ‘unicorn’ companies, have essentially abandoned their traditional risk analysis. Traditional early-stage investors, institutional public investors, and anyone with extra millions are rushing in to the high-stakes, late-stage game.” In conclusion, it doesn’t appear correct to characterise AI as a bubble in the traditional sense. Instead, venture capitalists have chosen huge systematic risk (undiversifiable reliance on AI), rather than the usual idiosyncratic risk (diversifiable across sectors) — which jeopardizes performance if the future doesn’t match up with today’s optimistic enthusiasm. The bear case is probably not a total bust like 2000, but a mini-correction more similar to 2022. While portfolios won’t be wiped out, capital will end up locked away in overcapitalized private-market giants for longer than is comfortable for anyone involved, again. Dan Gray, a frequent guest author for Crunchbase News, is the head of insights at Equidam, a platform for startup valuation. Related reading: Illustration: Dom Guzman
Why Accel Led A Round For Fintech Startup Campfire For The Second Time In Under 4 Months
Campfire, an AI-powered accounting startup, has raised $65 million in a Series B round just months after closing on a Series A. Accel and Ribbit Capital co-led the round, which brings the San Francisco-based startup’s total raised to $103.5 million since its 2023 inception. Most founders count themselves fortunate if they go a couple of years between each venture round. However, in every cycle, there are a few outliers who raise funds much faster. The past couple of years have offered plenty of examples of those types of companies. According to Crunchbase data, a sizable cohort of companies has progressed from Series A to Series C between 2023 and this year. Several have managed to scale all three stages in less than 12 months. John Glasgow and Paul Nichols of Campfire. Courtesy photo. In Campfire’s case, a common history between Campfire CEO and founder John Glasgow and John Locke, partner at Accel, was a factor in the fast fundraising pattern. The two first met when Glasgow was working at Invoice2go, a startup that was acquired by fintech giant Bill in July 2021 for $625 million. Locke was also an investor in Invoice2go, where Glasgow was a vice president of business development and partnerships before the acquisition. Glasgow eventually left Bill, which he joined after the buyout, to start Campfire with the goal of building an AI-native ERP, or enterprise resource planning software, for “modern” finance and accounting teams at mid-sized and enterprise companies. Campfire participated in startup accelerator Y Combinator’s Summer 2023 batch. “We went our first two years since YC with just $3.5 million in funding,” Glasgow said in an interview. “And we still had about half of it. But then we felt an intense market pull, so we raised a Series A.” The startup went on to raise $35 million in a Series A funding round led by Accel this past June. Since that round, Campfire has quadrupled its team from 10 to 40 employees, according to Glasgow. After Campfire’s last raise, several Accel portfolio companies reached out to demo Campfire, in addition to other companies that had generally heard about its offering for the first time, according to Locke. “The demand is quite a bit higher than what we even anticipated,” he said. “And we want to make sure that John and the team are appropriately enough capitalized to meet that demand.” Campfire’s customers include Decagon, Replit, CloudZero, TwelveLabs and Tilt, among others. Overall, the demand for new ERPs is high, and that’s evidenced by the amount of venture dollars flowing into the space. DualEntry on Oct. 2 announced a $90 million Series A raise co-led by Lightspeed Venture Partners and Khosla Ventures at a $415 million valuation. And on Aug. 6, Rillet announced that it raised $70 million in a Series B funding round co-led by Andreessen Horowitz and Iconiq Capital. Meanwhile, for Locke, having worked with Glasgow previously was also another factor in his feeling comfortable in writing another check into the company so soon after his first. “This is the second time that he and I have worked together, and I have a tremendous amount of confidence in John as a leader and recruiter,” he said. “And he’s added some really terrific people to the company in a short amount of time.” Related Crunchbase queries: Related reading: Illustration: Dom Guzman
Exclusive: B2B Marketing Analytics Startup Dreamdata Lands $55M Series B
Dreamdata, a B2B marketing analytics platform, has secured a $55 million Series B round of funding, the company told Crunchbase News exclusively. PeakSpan Capital led the round, which included participation from InReach Ventures, Angel Invest, Curiosity Venture Capital and Crowberry Capital. With this latest financing, Dreamdata — which has dual headquarters in Copenhagen, Denmark, and New York — has raised $67 million since its 2018 inception. The company’s last raise was in December 2022 with an $8 million Series A led by Signals Venture Capital. CEO Nick Turner declined to reveal at what valuation Dreamdata raised its latest round, saying only that it was “an incredibly significant increase” when compared to its previous venture funding. Dreamdata’s goal is to provide “the most complete B2B buyer journey map anywhere by joining ads, website visits, emails, CRM … into one clean timeline per account,” according to Turner. Examples of functions its platform can perform include syncing “high-intent” audiences to ad platforms such as Google or Meta, triggering notifications to a sales team, or running marketing workflows. “That gives marketers a trustworthy ‘single source of truth’ to see what’s working, prove ROI, and then act on it, with AI assistance,” Turner said. “We do both activation and attribution. We’re not just a reporting tool; we are building the operational infrastructure for the B2B marketer.” Clio, Finastra, Cognism, Oyster and Turing are among its “thousands” of customers. AI has had a profound effect on many sectors such as biotech and cybersecurity, as many startups have added the technology to their platforms. Marketing is no exception, as Dreamdata is only the most recent marketing tech startup to get funding. In February, marketing and personalization startup Hightouch locked up an $80 million Series C led by Sapphire Ventures, minting it as a new unicorn at a $1.2 billion valuation. Also in February, Toronto-based StackAdapt raised a $235 million growth round led by Teachers’ Venture Growth — the late-stage venture and growth investment arm of Ontario Teachers’ Pension Plan. The startup has a multichannel programmatic advertising platform that uses AI and automation to help with digital marketing efforts. Overall, global venture funding to sales and marketing tech startups totaled $5.9 billion through Oct. 10, 2025, per Crunchbase data. That’s down 11.9% compared to the $6.7 billion raised in the same time period in 2024. Sustainable growth Dreamdata operates its business under a SaaS model with a component of usage-based pricing. The company has more than doubled its annual recurring revenue while maintaining the same number of employees it had one year ago (50), according to Turner. “We are operating with disciplined ambition via sustainable growth,” he said, noting that Dreamdata is focused on growing its business in Europe and North America. One of Dreamdata’s biggest differentiators from traditional competitors, such as Adobe’s Marketo Measure/Bizible, Turner claims, is that it’s designed for “forward-looking action” as opposed to focusing on what happened in the past. Matt Melymuka, co-founder and managing partner of PeakSpan Capital, leads the GTM technology investing at the venture firm and said he’s been partnering with companies in the space for over 15 years. “It is with that long-tenured perspective and context that I have developed a deep appreciation for the problem Dreamdata is solving. Accurate revenue attribution has been a persistent challenge for years and years, and the problem today is complex and multi-faceted,” he told Crunchbase News via email. “The modern customer journey is convoluted, spanning numerous channels and disparate touchpoints, so understanding with high confidence what contributes most to a conversion is incredibly complex.” In Melymuka’s view, Dreamdata’s offering solves the challenge of revenue attribution while also leveraging signal data and AI to support activation and execution. “Relative to other solutions in the market, Dreamdata delivers far and away the quickest time to value – despite the complexity underpinning the solution,” he said. Related Crunchbase query: Related reading:
Active Investors Kept Busy In An AI-Centric Quarter
A familiar set of active investors led startup dealmaking in the third quarter, backing and leading the most rounds as well as spending heavily to do so. Y Combinator, the global leader at seed and an active follow-on investor, was a particular standout in Q3 for deal count. As for the highest-spending investors, backers in Anthropic’s $13 billion Series F led the pack. Overall, meanwhile, serial backers of AI megarounds topped our most-active investor ranks. These included well-known names like Insight Partners, General Catalyst, Accel, Andreessen Horowitz and Iconiq Capital. For more detail, below we break out the most-active investor ranks across multiple categories, looking at busiest lead dealmakers, highest spenders, and top venture and seed backers. Most-active lead investors Insight Partners was the most-active global lead investor in Q3, serving as lead or co-lead investor in 19 reported deals, per Crunchbase data. The largest rounds included a $1 billion financing for Databricks and a $260 million Series E for legal tech unicorn Filevine. Accel was next, with 14 deals, followed by Peak XV Partners (formerly Sequoia India and Southeast Asia) and General Catalyst. Spendiest investors We can also get a sense of who put the most capital to work in Q3 by looking at lead investors in the most expensive collection of rounds. It’s not an exact science, given that investors seldom disclose their share of a particular financing. However, it does give us an idea. At the top of the list are co-lead investors in the latest Anthropic round: Fidelity, Iconiq Capital, and Lightspeed Venture Partners. Among other investors who led multiple rounds last quarter, the most active were Andreessen Horowitz and Insight Partners. And as shown below, there were 19 investors who led or co-led one or more rounds valued at $1 billion and up. Busiest post-seed investors The rankings look quite a bit different when we stop focusing on lead investors and instead look simply at who backed the most post-seed rounds. By this measure, the far-and-away leader is Y Combinator, which rarely takes a lead role but does participate as a return investor in rounds for startups that came through its accelerator program. General Catalyst and Andreessen Horowitz tied for second place, with 29 reported deals each, followed by Insight Partners and Accel, with 25 and 24 rounds, respectively. Most-active seed investors For this past quarter, Y Combinator also claimed its usual spot as the most-active seed-stage investor. Per Crunchbase data, the famed accelerator backed at least 218 reported seed financings, up from Q2 but down a bit year over year. Next in the ranks was TechStars, followed by Antler. And below, we take a lengthier look at the most-active global seed investors. Chugging along The big picture from Q3’s active investor tallies is that established leaders among startup investors are still very much in the game. While there’s been some shuffling in the ranks in recent quarters, the top active investor slots on our lists still contain mostly the same names. Not coincidentally, many are also some of the biggest AI investors and already have some of the highest-profile startups in their portfolios. Given that so many of these companies continue to see big markups and red-hot investor demand, the immediate forecast is that many more big checks from these investors are likely to pile up before years end. Related reading: Illustration: Dom Guzman
The Week’s 10 Biggest Funding Rounds: Polymarket And Reflection AI Lead A Varied Lineup Of Megarounds
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. The past week brought a varied assortment of large startup financings, with big rounds in sectors ranging from events-based betting to AI to energy to biotech. Leading the pack for round size were prediction market platform Polymarket and open standards-focused AI startup Reflection AI, which each raised $2 billion. 1. (tied) Polymarket, $2B, prediction market: Intercontinental Exchange, the operator of clearing houses and exchanges including the New York Stock Exchange, announced that it will invest up to $2 billion into the prediction market platform Polymarket. The deal sets an $8 billion pre-money valuation for New York-based Polymarket, which lets users wager on event probabilities across markets, politics, sports and other areas. 1. (tied) Reflection AI, $2B, AI: New York’s Reflection AI, a developer of LLM training models based on open standards, raised $2 billion in a funding round backed by Nvidia and a long list of venture investors. The financing sets an $8 billion valuation for Reflection, which is reportedly 15x the valuation it secured just seven months ago. 3. Base Power, $1B, battery power: Base Power, an Austin, Texas-based provider of battery-powered home energy, secured $1 billion in Series C funding led by Addition. Founded in 2023, Base has raised $1.3 billion in known funding to date, per Crunchbase data. 4. Stoke Space, $510M, space tech: Stoke Space, a developer of reusable launch vehicles, picked up $510 million in Series D funding led by US Innovative Technology Fund in conjunction with a $100 million debt facility led by Silicon Valley Bank. The funding will be used toward expanding production capacity in its launch vehicle and activating its launch complex at Cape Canaveral. 5. Expedition Therapeutics, $165M, biotech: San Francisco-based Expedition Therapeutics, a developer of therapies for inflammatory and respiratory diseases, closed on $165 million in Series A funding co-led by Sofinnova Investments and Novo Holdings. Funding will support a Phase 2 study for its drug candidate to treat chronic obstructive pulmonary disease. 6. EvenUp, $150M, legal tech: EvenUp, a legal tech startup that creates artificial intelligence products for the personal injury sector, landed $150 million in Series E funding. Repeat backer Bessemer Venture Partners led the round, which sets a valuation of more than $2 billion for the San Francisco-based startup. 7. Duos, $130M, health benefits: Minneapolis-based Duos, a digital health platform focused on Medicare beneficiaries, locked up $130 million in a growth equity investment led by FTV Capital. Founded in 2020, Duos has raised over $160 million in known funding to date. 8. Nilo Therapeutics, $101M, biotech: Nilo Therapeutics, a startup focused on developing therapies based on advances in neuro-immunology, launched with a $101 million Series A round. The Column Group, DCVC Bio and Lux Capital led the financing for the New York-based company. 9. Torl Biotherapeutics, $96M, biotech: Torl Biotherapeutics, a startup focused on antibody-based immunotherapies for cancer patients, closed on a $96 million Series C round. The Los Angeles company did not disclose investors but did say the funding would go to advance multiple clinical trials in progress. 10. Harvey, $59M, legal tech: Harvey, a provider of AI-enabled tools for legal professionals, raised $59 million from EQT Growth aimed at supporting international expansion. The financing brings total reported funding to date for San Francisco-based Harvey to $865 million, with most of that secured in 2025. Methodology We tracked the largest announced rounds in the Crunchbase database that were raised by U.S.-based companies for the period of Oct. 4-10. 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