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Yahoo
19-06-2025
- Business
- Yahoo
Where the smart money went: Spring 2025's lessons for European VC sector
Spring 2025 marks a turning point for the European venture capital market: the turbulence of previous years is giving way to a search for new points of stability. On the surface, the overall volume of investments has held steady at around $12–13 billion for Q1, but the logic of deals and investor priorities has clearly shifted. There are fewer rounds, average check sizes have grown, and both startups and founders now face much higher standards. In this article, I outline the key trends of the spring season, analyse where the money is actually going, which segments are attracting the attention of major and niche funds, and what this means for the market, LPs, GPs, and founders. I explain why infrastructure, deep tech, and B2B have come into focus—and which previously hyped sectors are now being left behind. This perspective aims to understand how the market is building new foundations after the 'easy money' era, how the strategies of leading players are evolving, and which scenarios are becoming most likely for the second half of the year. In spring 2025, European venture capital has taken a deliberate step away from chasing the next big platform for everyone. Instead, investors are channelling capital into start-ups that own one specific pain point—and solve it better than anyone else. This change is most visible in the priorities of leading funds. When Cathay Innovation launched its $1B fund this spring, it made clear: that the capital would flow only into vertical AI applications, such as healthcare diagnostics, financial automation, or energy optimisation. The era of 'AI for everything' is over; now, investors want AI for something real. Smartfin, too, repositioned itself strictly as a backer of B2B infrastructure scale-ups, while Cherry Ventures doubled down on single-solution early-stage bets in key European hubs. Investment rounds echo the same shift. Isomorphic Labs raised €556M for AI-driven drug discovery, not a generic platform. Rapyd's €474M round was all about expertise in the toughest corner of payments compliance. Even Reneo's €600M in climate tech was grounded in focused, technical innovation. Why does this matter? Because LPs have grown tired of stories and scale for scale's sake. They want evidence: deep product-market fit, visible technical advantage, and a defensible moat. At Zubr Capital, we see this as a healthy correction. The winners will be those who choose depth over spread—delivering mastery in one vertical, not chasing every market at once. This spring, European venture capital has drawn a clear line: the era of quick-to-market wrappers and surface-level 'innovation' is over. Investors are backing startups that build true technology—from the ground up—with substantial engineering and proprietary IP at their core. The distinction is sharp. Isomorphic Labs, a UK spinout from DeepMind, raised €556m not for a generic AI platform, but for a domain-specific stack in drug discovery: new algorithms, unique data pipelines, and technical depth rooted in biology and chemistry. Investors are no longer satisfied with startups layering a pretty interface on public models—they want hard science and engineering. The same is true beyond AI. Sweden's Neko Health secured $260 million by combining proprietary hardware, sensors, and software for preventive diagnostics—redefining early health screening by building every layer in-house. France's Loft Orbital became a unicorn not by selling vision, but by delivering engineering: modular satellite buses, custom mission software, and reliable payload integration. Their latest funding will scale working infrastructure, not just prototypes. Even in creative AI, substance wins. Synthesia's $180 million round is about advancing proprietary technology for avatar and voice generation—no reliance on off-the-shelf models, but a real R&D engine. And while Quantum Motion (UK) hasn't raised a headline round this spring, its pursuit of silicon-based quantum processors—rooted in physics, not hype—demonstrates the kind of depth investors now prize. The signal is clear: capital is flowing to teams that deliver real, defensible technology. For founders, engineering depth and original IP are now the strongest currency in the European market. Spring 2025 has brought a new level of discipline to European venture capital, as thesis-driven funds moved decisively into the spotlight. Instead of spreading bets across the entire innovation spectrum, more VCs are building portfolios around tightly defined investment themes and industry problems. This trend is reshaping the funding landscape. Funds like Keen Venture Partners have launched dedicated vehicles for European defense and security tech, raising €40 million from EIF specifically for startups tackling national security infrastructure. Recent portfolio moves—EclecticIQ, Avalor AI, Rescale—underline a sharp focus on deep, vertical technologies with immediate strategic value. Other funds are taking a similar approach. 7percent Ventures now concentrates on aerospace, dual-use AI, and moonshot innovation, consistently backing engineering-heavy founders solving mission-critical problems. Their recent investments—satellite comms, cybersecurity AI, aerospace telemetry—reflect this 'vertical expertise first' logic. Lab-to-market models are also gaining ground. Chalmers Ventures has systematized partnerships with scientific teams, turning real innovations into commercial deep tech businesses—not just following buzzwords. Creator Fund backs only PhD-led start-ups in AI, life sciences, and frontier tech, while Deeptech Labs specializes in seed-stage, IP-rich companies moving from prototype to product. The message is clear: targeted capital is a sign of genuine conviction. As generalist portfolios lose ground, thesis-driven strategies are setting new standards for discipline and sector insight. For founders and LPs alike, clarity of purpose and deep industry expertise have become critical differentiators in Europe's maturing VC market. This spring, European venture capital sent a strong signal: location matters less than ever, and operational quality now outweighs geography. The largest rounds and new fund launches consistently favored execution and market traction over traditional 'hotspots.' Take Reneo's €600m cross-border round—one of the biggest in Q1 2025. Its operations span France and Spain, proving that VC now follows product readiness and strategic vision, not the location of a company's headquarters. Similarly, Milan-based Hotiday raised €5,5M from top-tier investors, breaking through Italy's usual funding ceiling thanks to strong product focus and niche traction. The fund landscape reflects the same shift. Soulmates Ventures closed a €50M fund for sustainability startups across Central and Eastern Europe, while 4Founders Capital launched a €44M fund for Spanish and Southern European founders—emphasising local expertise and regional commitment. Defiant's $30M fund connects Western and peripheral European markets, and Voima Ventures' €100M Fund III targets deep tech across the Nordics and Baltics. Even previously secondary regions—Benelux, DACH, Southeast Europe—are seeing increased activity, as new funds target talent and technical strength wherever they emerge. The bottom line: investors now assess startups by execution, product, and real market potential, regardless of location. For founders, this means access to capital is more meritocratic than ever. For the ecosystem, it signals a Europe-wide race for quality—where substance, not geography, wins. Spring 2025 confirmed that infrastructure is now at the heart of Europe's tech agenda—not just for performance, but for resilience, control, and sovereignty. Governments and VCs are aligned: funding no longer just chases growth, but prioritizes the foundational layers powering AI, data, automation, and security. This shift is massive in scale. The EU's InvestAI program launched with €200 billion to build core AI infrastructure—giga-factories, sovereign clouds, and advanced chips. France added €109 billion for AI leadership, and the European Technological Competitiveness Initiative is rolling out over €10 billion into chips, cybersecurity, and cloud through fund-of-funds structures. Private capital is following suit. Investments in sovereign data pipelines, chip design, and next-gen autonomy are on the rise. Established players like Graphcore (UK) embody Europe's silicon ambitions, while stealth-mode AI hardware startups are quietly closing large rounds. Industrial infrastructure is another hotbed: FLOW X (Romania) stands out for integrating deep analytics and automation into industrial processes—moving far beyond dashboards. Funding is now targeting digital twins, industrial IoT, and process automation, making deep tech synonymous with infrastructure. Cybersecurity has become a national priority. Deals now focus on architecture for industrial and state security, with companies like Unseen (UK) pioneering AI-native protection that moves beyond traditional firewalls. Zero-trust systems, sovereign clouds, and industrial cyber platforms are quietly attracting both private and state capital. The message is clear: in 2025, infrastructure is no longer a supporting function—it's the main event. For investors and founders, building and owning the tech backbone of Europe is the highest-value play on the market. Spring 2025 has redefined the European VC landscape: investors now demand focus, technical depth, and real traction. This new discipline is making the market quieter but stronger, with capital gravitating toward deep tech, infrastructure, and clearly defensible niches—regardless of geography. Looking ahead, we expect this logic to hold. The second half of 2025 is likely to bring continued selectivity, with larger rounds flowing to proven teams and sectors solving fundamental problems—AI infrastructure, climate, industrial tech, and security. Government and private capital will keep reinforcing each other, driving further consolidation and accelerating the shift from hype to substance. For founders and investors, the message is clear: building real technology and demonstrating market resilience will remain the keys to unlocking capital and long-term success. At Zubr Capital, we see a maturing market—one poised not just to survive, but to lead the next cycle of European innovation. Oleg Khusaenov is CEO and founder of Zubr Capital Investment Сompany "Where the smart money went: Spring 2025's lessons for European VC sector" was originally created and published by Retail Banker International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
TechCrunch
02-06-2025
- Business
- TechCrunch
Chime, last valued at $25B, aims for $11B in upcoming IPO
Chime, whose pending IPO is expected to be one of 2025's blockbuster hits, issued a share price range on Monday of $24 to $26. That's an up-to-$11.2-billion market cap. At the mid-range, the company will raise $800 million for itself and a handful of investors, including European VC powerhouse Cathay Innovation, who plan to sell some shares in the IPO. Even in these slow IPO times, this wouldn't be the biggest IPO of 2025. Coreweave, which raised $1.5 billion, and was valued at $23 billion, holds that title. This, even though Coreweave had hoped for far more from its IPO. Still, Chime's IPO is one to watch given that the company is reporting fast revenue growth and falling expenses. It reported $1.3 billion in revenue in 2023 and $1.7 billion in 2024 — and it has already booked over $518 million in the first quarter of 2025. Losses shrank from $203 million in 2023 to $25 million in 2024. The only black eye for Chime is that its last known private valuation was $25 billion, according to Pitchbook's estimates, far higher than this target. But that doesn't mean much. If investors are hot for this stock, it will price its IPO above the target range. And if retail investors want it on its first day of trading, its valuation will pop from there. And there's at least one strong indication that insiders think it will do that: Even with the thirst for liquidity in venture these days, aside from Cathay, Chime's largest shareholders are not, at this juncture, selling, according to its latest filing. We'll see if another filing reveals more insider sales. But other major investors that are holding their stakes include billionaire Yuri Milner's DST Global, Michael Stark's Crosslink Capital, and billionaire Len Blavatnik's Access Industries, as well as VC firms General Atlantic, Menlo Ventures (led by board member Shawn Carolan), and Iconiq, according to the paperwork. The IPO is currently expected to happen sometime during the week of June 9.
Business Times
02-06-2025
- Business
- Business Times
Digital banking startup Chime targets US$11.2 billion valuation in US IPO
[BENGALURU] Digital banking startup Chime Financial said on Monday (Jun 2) it was targeting a valuation of up to US$11.2 billion on a fully diluted basis in its long-awaited New York initial public offering, underscoring the growing momentum in the new listings market. San Francisco, California-based Chime and some of its existing shareholders are seeking to raise up to US$832 million by offering 32 million shares priced between US$24 and US$26 apiece. Chime is offering 25.9 million shares in the offering, while certain shareholders, including venture capital firm Cathay Innovation, are putting up 6.1 million shares. The US IPO market has sprung back to its feet after a disappointing April as equities rebounded amid easing volatility, paving the way for companies to go public after tariff-driven chaos shut the window for weeks. Recent listings, including retail trading platform eToro, have been well-received by investors. Analysts say the stage is set for a broader IPO pickup, but stability needs to last longer before the window fully reopens. 'Momentum is building after the tariff-related volatility. Right now, investors want to see fundamentally strong companies with attractive valuations,' said Matt Kennedy, senior strategist at Renaissance Capital, a provider of IPO-focused research and ETFs. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Chime, founded in 2012, offers banking products such as checking and high-yield savings accounts through its app. The company mainly generates revenue when its members spend using Chime-branded debit and credit cards. Chime raised US$750 million in a 2021 funding round at a US$25 billion valuation. Its major backers include Yuri Milner's DST Global, private equity firm General Atlantic and investment firm ICONIQ. Fintech revival? Financial technology listings have slowed down since the pandemic-era boom as interest rates rose and inflation surged. Swedish fintech giant Klarna paused its US IPO plans earlier this year as tariffs rattled global markets. A successful IPO for Chime could pave the way for other fintech companies that have recently considered tapping public markets. Chime's IPO valuation target represents prudence in giving buyers a decent discount to encourage participation, said Samuel Kerr, head of equity capital markets at Mergermarket. 'As the largest deal to test the market since 'Liberation Day,' Chime will be a fascinating case study.' Morgan Stanley, Goldman Sachs and JPMorgan are the lead underwriters for the IPO offering. Chime will list on the Nasdaq under the symbol 'CHYM'. Chime plans to use a portion of its IPO proceeds to settle tax obligations related to employee-restricted stock units. REUTERS
CNA
02-06-2025
- Business
- CNA
Digital banking startup Chime targets $11.2 billion valuation in US IPO
Digital banking startup Chime Financial said on Monday it was targeting a valuation of up to $11.2 billion on a fully diluted basis in its long-awaited New York initial public offering, underscoring the growing momentum in the new listings market. San Francisco, California-based Chime and some of its existing shareholders are seeking to raise up to $832 million by offering 32 million shares priced between $24 and $26 apiece. Chime is offering 25.9 million shares in the offering, while certain shareholders, including venture capital firm Cathay Innovation, are putting up 6.1 million shares. The U.S. IPO market has sprung back to its feet after a disappointing April as equities rebounded amid easing volatility, paving the way for companies to go public after tariff-driven chaos shut the window for weeks. Recent listings, including retail trading platform eToro, have been well-received by investors. Analysts say the stage is set for a broader IPO pickup, but stability needs to last longer before the window fully reopens. "Momentum is building after the tariff-related volatility. Right now, investors want to see fundamentally strong companies with attractive valuations," said Matt Kennedy, senior strategist at Renaissance Capital, a provider of IPO-focused research and ETFs. Chime, founded in 2012, offers banking products such as checking and high-yield savings accounts through its app. The company mainly generates revenue when its members spend using Chime-branded debit and credit cards. Chime raised $750 million in a 2021 funding round at a $25 billion valuation. Its major backers include Yuri Milner's DST Global, private equity firm General Atlantic and investment firm ICONIQ. FINTECH REVIVAL? Financial technology listings have slowed down since the pandemic-era boom as interest rates rose and inflation surged. Swedish fintech giant Klarna paused its U.S. IPO plans earlier this year as tariffs rattled global markets. A successful IPO for Chime could pave the way for other fintech companies that have recently considered tapping public markets. Chime's IPO valuation target represents prudence in giving buyers a decent discount to encourage participation, said Samuel Kerr, head of equity capital markets at Mergermarket. "As the largest deal to test the market since 'Liberation Day,' Chime will be a fascinating case study." Morgan Stanley, Goldman Sachs and J.P. Morgan are the lead underwriters for the IPO offering. Chime will list on the Nasdaq under the symbol 'CHYM'.
