Trump’s M&A Threats and Wall Street’s Tariff Jitters
Week of March 31st, 2025
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STARTUPS
ROUNDS AND UNICORNS
The Week’s Biggest Funding Rounds: Fleetio And Mercury Nab Massive Rounds (Crunchbase, 5 minute read)
Fleetio (Fleet Management): raised $450 million in a round co-led by Elephant and Goldman Sachs Alternatives’ growth equity branch. The funds will finance the acquisition of Auto Integrate, helping Fleetio manage 8 million+ vehicles and process 13 million+ repair orders annually
Mercury (Fintech): secured $300 million in a Series C led by Sequoia Capital, bringing its valuation to $3.5 billion, more than double its 2021 valuation of $1.6 billion. The company provides business banking solutions
Island (Cybersecurity): raised $250 million in a Series E round led by Coatue Management, valuing the company at $4.8 billion. This represents a 60% increase from last year’s valuation of $3 billion.
Aura (Cybersecurity): raised $140 million in a Series G round at a $1.6 billion valuation. The Boston-based company focuses on consumer cybersecurity, offering protection against scams, fraud, and identity theft
Supira Medical (Medical Device): the company specializes in percutaneous ventricular assist devices, secured $120 million in Series E funding led by Novo Holdings and Qatar Investment Authority
Healthcare And Security Led For New Unicorns In February (Crunchbase, 5 minute read)
In February, nine companies joined the Crunchbase Unicorn Board, with healthcare and cybersecurity emerging as the leading sectors. Artificial intelligence played a significant role in the success of many of these new unicorns, particularly in healthcare, cybersecurity, and sales & marketing. Collectively, these nine companies contributed $15.6 billion in value and raised $1.9 billion in funding
Of the new additions, four were U.S.-based, while Saudi Arabia, China, Israel, Ireland, and Canada each added one new unicorn
Growth equity firms led six of the funding rounds, while VC firms led three
Collectively, these nine companies contributed $15.6 billion in value and raised $1.9 billion in funding
Notable new unicorns included Abridge ($2.8 billion valuation), OpenEvidence ($1 billion valuation), and Tines ($1.1 billion valuation)
ECONOMIC SNAPSHOT
Wall Street braces for Trump’s April 2 tariff deadline—it foresees 18% EU import duties and a 43% chance of a U.S. recession (Fortune, 5 minute read)
Analysts are closely watching April 2 for potential new U.S. tariff announcements, with concerns growing over their economic impact. President Trump has already imposed and threatened tariffs on key trading partners, including the EU, Canada, Mexico, and China, with speculation that a universal tariff could be introduced. Markets expect Europe to face a sustained 18% U.S. tariff rate, with most analysts forecasting rates between 10% and 25%
Deutsche Bank reports an average 43% probability of a U.S. recession, with 23% of respondents placing the risk above 60%
Trump has taken a harder line on the EU, claiming it was formed to “screw” the U.S. He argues tariffs will correct trade imbalances,
While JPMorgan CEO Jamie Dimon warns a 25% universal tariff would be “quite recessionary and inflationary”, Commerce Secretary Howard Lutnick dismissed recession fears, saying “no chance”, while Treasury Secretary Scott Bessent admitted “there are no guarantees” the U.S. can avoid an economic downturn
President Trump Imposes 25% Tariffs on Imported Automobiles (AP, 3 minute read)
President Donald Trump has announced a 25% tariff on all imported automobiles and certain auto parts, effective April 3, 2025. The administration asserts that this measure aims to boost domestic manufacturing and address national security concerns. However, industry experts warn that the tariffs could lead to increased vehicle prices for consumers and potential retaliatory actions from trade partners
The tariffs apply to all foreign-made cars and specific auto parts, including engines and transmissions
The administration claims the tariffs will encourage domestic production and protect national security
Critics argue that the tariffs may raise consumer prices and provoke trade disputes
President Trump Threatens Tariffs on Russian Oil Imports Amid Ukraine Peace Negotiations (Reuters, 4 minute read)
Amid stalled Ukraine peace negotiations, President Donald Trump has threatened to impose secondary tariffs ranging from 25% to 50% on countries purchasing Russian oil if Russia does not agree to a ceasefire within a month. The President expressed frustration with Russian President Vladimir Putin over the lack of progress in resolving the conflict. The Kremlin acknowledged ongoing discussions with the U.S. regarding potential peace initiatives and bilateral relations
President Trump is considering significant tariffs on nations importing Russian oil to pressure Russia into a Ukraine ceasefire
The President’s frustration stems from perceived delays by Russia in the peace negotiation process
The Kremlin has confirmed ongoing talks with the U.S. on peace efforts and bilateral issues
U.S. economy grew 2.4% in the 4th quarter after upgrade in final growth estimate (AP, 3 minute read)
The U.S. economy expanded at a 2.4% annualized rate in Q4 2024, slightly revised up from previous estimates, but slower than the 3.1% growth in Q3. This was largely driven by strong consumer spending, which rose at a 4% pace. However, business investment declined, with an 8.7% drop in equipment spending, and reduced business inventories subtracted 0.84 percentage points from GDP growth
2024 GDP grew 2.8% (down from 2.9% in 2023); consumer spending rose 4%; business investment declined, with an 8.7% drop in equipment spending
Trade tariffs, inflation, and financial uncertainty could slow growth, with declining consumer confidence impacting retailers
Core inflation in February hits 2.8%, higher than expected; spending increases 0.4% (CNBC, 3 minute read)
The Federal Reserve’s key inflation measure, the core PCE price index, rose 0.4% in February, exceeding expectations and marking the largest monthly gain since January 2024. This put the 12-month core inflation rate at 2.8%, above the forecasted 2.7%. Meanwhile, overall inflation rose 0.3% for the month and 2.5% year-over-year, in line with estimates
The personal savings rate climbed to 4.6%, its highest level since June 2024, signaling increased household caution
Stock futures and Treasury yields briefly dipped following the report, as investors recalibrated expectations for Federal Reserve policy
The Fed remains cautious on rate cuts, with concerns over the inflationary impact of President Trump’s tariffs, which could further complicate monetary policy
IMPACT & CLIMATE RESILIENCE
The Trump administration has a new way to pressure companies to ditch DEI (CNN, 5 minute read)
The Trump administration has threatened to block M&As of media companies that promote diversity, equity, and inclusion (DEI) policies, using the Federal Communications Commission (FCC) to enforce this stance. FCC Chairman Brendan Carr stated that companies promoting DEI practices could face blocked mergers, arguing that such policies conflict with the "public interest" standard required for merger approvals. This marks a new approach, as previous administrations only blocked mergers based on competition concerns, not HR policies
Legal experts and advocacy groups criticized the move, highlighting that DEI is generally aimed at improving representation of underrepresented groups, and the Trump administration's attacks on DEI, labeling it as "illegal and immoral discrimination," lack legal grounding
Carr's comments have left companies uncertain about which DEI practices may be deemed unlawful, leading to confusion and concerns about potential investigations and litigation
Major corporations like Meta, Amazon, and Goldman Sachs have already rolled back DEI policies in response to the administration's pressure
Tech In Trump era, companies are rebranding DEI efforts, not giving up (CNBC, 7 minute read)
Companies across the U.S. are reevaluating their diversity, equity, and inclusion (DEI) initiatives in response to political and legal pressures. Many are scaling back or rebranding these programs, shifting to terms like “opportunity” and “belonging” to avoid controversy. The shift has accelerated following Trump’s executive order restricting DEI programs in federal agencies and the private sector, impacting nearly 50 companies
Major corporations, including Google, Amazon, and JPMorgan, have restructured or renamed their DEI efforts
Fortune 100 companies saw a 22% decrease in the use of terms like “DEI” and “diversity” and a 59% increase in terms like “belonging” between 2023 and 2024
Legal and regulatory scrutiny has led to budget cuts, with some firms reducing DEI spending by up to 90%
Despite these changes, 73% of companies still include DEI in their values, and 86% of workers have a neutral-to-favorable view of workplace diversity efforts
Many businesses are shifting focus to metrics like promotion rates and retention, rather than hiring quotas
IPO & EXITS
The Trump antitrust stance? M&A pros are still guessing (Pitchbook, 4 minute read)
The uncertainty surrounding the Trump administration's approach to antitrust regulations is causing M&A professionals to proceed cautiously, as they await clarity on how the Federal Trade Commission (FTC) and Department of Justice (DOJ) will define monopolies and unfair competitive practices. Despite high-profile deals being blocked, some analysts suggest that external factors, such as high interest rates and tariffs, are the primary reasons for the slowdown in M&A activity, rather than just antitrust concerns
While over 1,500 U.S. M&A deals have been struck in 2025 Q1, this is a significant decrease compared to 8,387 transactions recorded in Q1 2024
The FTC blocked the $627 million acquisition of healthcare startup Surmodics, and the DOJ moved to block Hewlett Packard’s $14 billion acquisition of Juniper Networks, signaling increased scrutiny on large transactions
Experts predict a possible uptick in private equity growth and rollup deals later this year if market conditions and interest rates improve
US VC secondaries dry powder is growing — but deals are remaining concentrated (Pitchbook, 3 minute read)
Secondary deals in U.S. startups are aligning with overall VC priorities, particularly in trendy sectors like AI. The secondary market in the U.S. is estimated to be between $41.8 billion and $59.9 billion, with tender offers from seven unicorns totaling $16.7 billion in 2024. However, secondaries accounted for only 2% of the $2.9 trillion valuation of unicorns
While secondaries have outpaced traditional VC dry powder, with $7.2 billion in 2024, they still represent only 2.3% of the dry powder in traditional VC funds
Secondary transactions saw a median premium of 8.9% in Q4 2024, a significant shift from a 47.7% median discount in 2023
This change reflects lower interest rates driving higher investor interest in secondaries, although buyers remain cautious with less secure bets
Is CoreWeave’s Debut an Ill Omen for I.P.O.s? (The New York Times, 4 minute read)
CoreWeave, an artificial intelligence company that rents computing power, launched its IPO with disappointing results, serving as a potential indicator of broader issues in the IPO market. The company priced its shares at $40 each, lower than the expected range of $47 to $55, and sold 37.5 million shares—about 23% less than originally planned
This resulted in raising $1.5 billion at a $23 billion valuation, far below initial expectations of $4 billion at a $35 billion valuation
Despite Nvidia's backing, the IPO's performance raises concerns about market conditions
Analysts pointed to broader economic challenges such as rising inflation and concerns over tariffs from President Trump, which have contributed to a more cautious investment climate
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Happy reading,
AI8 Ventures’ Research & Investment Team
