Megadeals, AI Agents, and more. As we step into the last quarter of 2025, let’s take a quick look back at Q3 and explore how the tech startup scene performed, where it’s headed, and why Q2T3 will be trending.
Global highlights
Good news: Global venture capital (VC) investment rose from $112 billion in Q2 2025 to $120 billion in Q3 2025, marking the fourth consecutive quarter of solid growth, according to Crunchbase data. Venture funding gained 38% year-over-year, driven by massive funding deals, especially in AI.
This consistent growth has been driven by megadeals of $500 million or more, particularly within AI. The last four quarters have seen a steady year-over-year increase in startup funding, proving that the momentum is strong, especially for AI-related companies.
Fintech: Back on track?
Fintech has seen a surge in venture funding this year, though the capital has been concentrated into fewer, high-growth companies. Private equity and alternative investors are leading the charge, with VC firms playing a crucial role, as Crunchbase data shows.
Take Ramp, for example. The expense management startup raised $500 million in Series E-2 at a $22.5 billion valuation. Interestingly, Y Combinator, typically a key player in the fintech space, isn’t involved in this company. However, YC still leads the charge in smaller rounds, participating in 43 fintech deals this year; a 65.4% increase over 2024.
The fintech trend continues to rise, with VC-backed fintech startups raising $22 billion in H1 2025, marking an 11.1% increase from H2 2024. Despite being the highest funding in recent years, it’s still below the $27 billion raised in H1 2023 and the peak $68.7 billion in 2021.
AI Agents: Why OpenAI’s tool is too big
The AI agent space is heating up, with $6.4 billion raised so far in 2025, already surpassing last year’s total. OpenAI’s introduction of AgentKit at its annual Developer Day has sparked concern among smaller companies. But VCs believe startups can still grow quickly. They argue that OpenAI’s size could limit its ability to specialize and deeply integrate into industries like healthcare, insurance, and finance, which require tailored, regulated solutions.
“They’re too big,” says Lu Zhang, founder and managing partner at the investor Fusion Fund.
He argues that investors are focusing on defensibility and advising startups to build strong, industry-specific expertise. Specialized AI agent startups, like n8n and Sierra, have recently raised significant funding, showing that smaller companies can still thrive by providing deep value and integration for enterprise clients.
Alos, established companies like AMD, HPE, Dell, Oracle, Apple, Cisco, and IBM are not only reporting strong revenues but are also driving the next phase of cloud and AI evolution through strategic pivots and bold moves.
Europe (EU + UK): Bigger but fewer deals, early-stage investment up
While late-stage investment in Europe remains steady, early-stage funding has become the driving force behind the region's resilience. Early-stage deals accounted for 60% of all European startup funding in Q3 2025, with strong activity in Deep Tech, Biotech, and AI.
In Q3, European startups secured $12.1 billion across 912 deals. This marks a 22% year-over-year increase, though the number of deals continues to decline. Europe saw 1,067 deals in Q3 2023, 981 in Q3 2024, and 912 in Q3 2025, signaling fewer but larger deals.
New record: Largest Series B in European history for Nscale
Nscale is a London-based AI startup that provides AI infrastructure and “AI factory” data centers. The company secured $940 million Series B funding, which makes it the largest round of this stage in European history. This funding will expand Nscale’s AI infrastructure and data centers across Europe, North America, and the Middle East.
Among other startup funding winners of last quarter are:
- Mistral AI (France): develops advanced, open-weight ML models. Mistral announced a Series C funding round of $1.7 billion, led by ASML Holding NV and including participation from existing investors such as Andreessen Horowitz and Nvidia.
- Aira (Sweden): a Cleantech startup that accelerates the electrification of residential heating in Europe. They’ve raised $150 million equity financing.
- IQM Quantum Computers (Finland): a Deeptech startup that builds superconducting quantum computers. They’ve raised $275 million in a Series B round, including support from Ten Eleven Ventures, Tesi, and Bayern Kapital, among others.
- n8n (Germany): an AI agent orchestration startup. They raised a $166 million Series C round led by Accel a few weeks ago.
Also noticeable: The UK had a standout quarter, securing £6.8 billion in VC funding: the second-highest Q3 on record, and on track to surpass £17.4 billion in total funding by year-end.
North America (Canada and the US)
In North America, fintech startups raised $26.7 billion in H1 2025, driven largely by megarounds of $500 million or more, largely into AI-related companies. The first half of 2025 saw fewer but larger rounds compared to previous years. North American companies raised 68% of global funding in Q3, with the U.S. contributing a substantial share, according to KPMG’s Pulse of Fintech report.
What’s notable (not surprising, though) is that Nvidia is all over the place: They’ve also entered a strategic partnership with OpenAI to deploy 10 gigawatts of Nvidia systems for OpenAI’s next-generation AI infrastructure. Nvidia plans to invest up to $100 billion to support data center and power capacity for this deployment.
More tech startup funding highlights:
- Anthropic: The quarter’s largest round with $13 billion of Series F funding. The AI startup alone accounted for more than a fifth of total startup investment in the US in Q3.
- Quantinuum: The early-stage startup, which is developing quantum computers, raised $600 million in an Nvidia-backed Series B round.
- Reflection AI: Reflection AI wants to make superintelligence accessible to everyone. Backed by Nvidia, it has raised $2 billion in a new funding round that values the company at $8 billion. Interestingly, the funding round saw participation from prominent investors, including former Google CEO Eric Schmidt and Donald Trump Jr.-backed private equity firm 1789 Capital.
In case you missed it in Q2: The AI research company Thinking Machines Lab scored $2 billion in a Seed round, which ranks as by far the largest seed round of all time in the Crunchbase dataset.
Outlook for Q4: Q2T3 is the trend for AI startups
Quadruple, quadruple, triple, triple, triple. What sounds like a magic spell is actually a new benchmark trajectory emerging for “today’s AI shooting stars”, in the words of Bessemer Venture Partners. Known as Q2T3, this growth model describes the rapid acceleration we’re seeing in AI companies, particularly those with strong product-market fit and solid margins.
These “shooting stars” grow faster than traditional SaaS (T2D3: triple, triple, double, double, double), but still operate closer to SaaS benchmarks than the explosive “AI supernovas”. AI supernovas sprint from seed to $100M of ARR often in their first year of commercialization: they are explosively scaling AI startups with unprecedented growth and adoption, like Perplexity for instance. AI shooting stars reach this within four years.
Check out more tech startup news here.
Sources and further reading:
https://www.bvp.com/atlas/the-state-of-ai-2025
https://openai.com/index/openai-nvidia-systems-partnership/
https://kpmg.com/xx/en/media/press-releases/2025/10/global-vc-investment-rises-in-q3-25.html
https://news.crunchbase.com/venture/global-vc-funding-biggest-deals-q3-2025-ai-ma-data/
https://news.crunchbase.com/fintech/investor-optimism-funding-rising-ai-ma-ipo-h1-2025-data/
https://news.crunchbase.com/fintech/startups-global-investment-2025-pe-y-combinator/
https://news.crunchbase.com/venture/biggest-seed-round-ai-thinking-machines-mira-murati/
https://pitchbook.com/news/articles/openai-agentkit-vc-not-worried
https://pitchbook.com/news/articles/ai-agent-startup-n8n-lands-2-5b-valuation-with-180m-series-c
https://tech.eu/2025/10/09/europes-tech-rebounds-to-eur21b-in-q3-2025-but-fewer-deals-signal-a-more-selective-market
https://www.nscale.com/press-releases/nscale-series-b
https://mistral.ai/news/mistral-ai-raises-1-7-b-to-accelerate-technological-progress-with-ai
https://company.airahome.com/newsroom/aira-announces-eu150m-equity-financing
https://www.vestbee.com/insights/articles/top-european-funding-rounds-closed-in-september-2025
https://www.uktech.news/funding/uk-venture-funding-surges-to-6-8bn-20251014
https://assets.kpmg.com/content/dam/kpmgsites/xx/pdf/2025/08/pulse-of-fintech-h1-2025.pdf
https://www.reuters.com/business/nvidia-backed-reflection-ai-raises-2-billion-funding-boosts-valuation-8-billion-2025-10-09