Tariffs Trigger Selloff, IPOs Put on Ice
Week of April 7th, 2025
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STARTUPS
ROUNDS AND UNICORNS
The Week’s Biggest Funding Rounds: OpenAI Easily Tops Massive Week (Crunchbase, 5 minute read)
OpenAI (AI): SoftBank led a record-breaking $40 billion investment in OpenAI, marking the largest venture deal ever. This deal could value OpenAI at $300 billion, pending restructuring conditions
Plaid (Fintech):Plaid raised $575 million led by Franklin Templeton at a $6.1 billion valuation. Plaid connects user bank accounts to fintech apps and was previously involved in a failed $5.3 billion acquisition by Visa
Silicon Ranch (Energy): Solar energy operator Silicon Ranch secured $500 million from AIP Management. The Nashville-based company operates solar and battery projects, with over $2 billion raised to date
Runway (AI): AI video startup Runway raised $308 million from General Atlantic, doubling its valuation to over $3 billion. The company develops AI tools for video creation and plans to expand its film and animation studio capabilities
AIRNA (Biotech): raised $155 million in Series B funding to advance RNA editing therapeutics. The financing will support a phase trial for treating alpha-1 antitrypsin deficiency and further pipeline development
North America Startup Investment Spiked In Q1 Due To OpenAI, But Seed And Early Stage Fell (Crunchbase, 5 minute read)
Startup investment in North America hit $82 billion in Q1 2025, the highest level in three years — but nearly half came from a single record-breaking $40 billion raise for OpenAI, led by SoftBank. Excluding that deal, funding was down across early- and seed-stage startups. Meanwhile, exit activity showed strength with Google's planned $32 billion acquisition of Wiz and CoreWeave's $1.5 billion IPO
Late-stage dominated: $66.4 billion invested, with Anthropic ($3.5B) and Infinite Reality ($3B) following
Early-stage investment at $12.4B and seed-stage hit a multi-year low at $3.2B
AI sector surged with $54 billion invested in AI startups alone
INDUSTRY
Silicon Valley’s early return on Trump investment: Plunging valuations, delayed IPOs (CNBC, 5 minute read)
Silicon Valley’s early support for Donald Trump’s 2024 presidential campaign is facing backlash as Trump’s sweeping new tariffs trigger a severe market downturn. Tech stocks have been hit hardest — the Nasdaq dropped 10% in a week, its worst performance since the pandemic’s onset in 2020. The seven most valuable US tech companies lost a staggering $1.8 trillion in market capitalization over just two days
Major firms like Apple (-14%), Tesla (-9.2%), Nvidia, Meta, and Amazon suffered double-digit losses
Trump’s aggressive tariffs have sparked recession fears, rising inflation expectations, and retaliatory measures from China. Economists warn of a 50% chance of a US recession
Tech executives — many of whom backed Trump — are now largely silent publicly, but market conditions are forcing companies to pause IPO plans and prepare for a potentially prolonged downturn
Dealmakers grapple with fresh uncertainty following Trump’s ‘Liberation Day’ tariffs (Pitchbook, 4 minute read)
Private markets are reeling after the Trump administration's surprise “Liberation Day” tariff package, which imposed 10% tariffs on all U.S. imports and steeper rates on key partners—34% on Chinese goods and 20% on EU imports. The move triggered a 4.84% drop in the S&P 500, the worst trading day since 2020. While private markets have dry powder to deploy, the lack of clarity on whether tariffs are temporary or permanent is holding back deal activity
CoreWeave’s lukewarm IPO debut may be the last for a while as institutional investors reassess risk
Exits are expected to stall, slowing capital recycling for VCs and PE firms. Buyers are turning to earn-outs, minority stakes, and post-closing adjustments to hedge uncertainty
Inflationary pressures from tariffs may prevent the Fed from cutting rates, raising the specter of a recession if consumer spending slows further
Venture Capital Has Never Been This Obsessed With AI, New Data Shows (Inc, 2 minute read)
U.S. venture capital activity in Q1 2025 surged to $91.5 billion across 3,990 deals—more than double the $42.4 billion from Q1 2024, according to PitchBook. However, this dramatic growth is skewed by OpenAI’s $40B round led by SoftBank, which accounted for nearly half of the quarter’s total
AI drove 71% of total VC investment, or 48.5% excluding OpenAI’s mega-deal
The market is bifurcated, with only a few elite companies raising outsized rounds while most startups struggle for funding
Exit activity remains limited despite a few standout events like CoreWeave’s IPO and Wiz’s $32B acquisition announcement
ECONOMIC SNAPSHOT
Trump 90-Day Tariff Pause Rumor Causes Stock Whipsaw Before White House Calls It ‘Fake News’—Here’s What Happened (Forbes, 7 minute read)
The White House denied reports on Monday that President Trump was considering a 90-day pause on his tariffs, calling the claim "fake news." The confusion stemmed from an interview with Kevin Hassett, who, when asked about the possibility of a tariff pause, responded by saying Trump would decide. This was misinterpreted, leading to false reports that Trump might pause tariffs, briefly boosting markets before the White House clarification
The Dow, S&P 500, and Nasdaq all rose briefly, with the S&P rising more than 6% over a 30-minute period before falling again
Trump, undeterred, defended his tariffs, asserting they were necessary to address trade imbalances and boost U.S. manufacturing, arguing that they would lead to economic "greatness"
Despite his stance, prominent supporters like Bill Ackman and Jamie Dimon expressed concerns that the tariffs could lead to inflation, economic downturn, and strained international alliances
Stagflation Warning Signs Emerge In The U.S. Economy (Forbes, 7 minute read)
After a year of exceptional stock market performance and stronger-than-average economic growth relative to other developed nations, the U.S. is now facing rising fears of stagflation—a rare and dangerous mix of slowing growth and persistent inflation. While inflation has eased since its 2022 peak, it remains well above the Federal Reserve’s 2% target, and recent indicators point to a cooling economy: consumer sentiment is plunging, business activity is slowing, and key labor metrics are beginning to weaken
New trade policies, including 25% tariffs on steel and aluminum, are raising costs for businesses and consumers, fueling inflation fears
Sentiment has fallen sharply, suggesting weaker spending ahead; small businesses and airlines are already adjusting forecasts
The Federal Reserve is caught between fighting inflation and avoiding deeper economic slowdown, as markets brace for policy missteps
BlackRock CEO Warns of Impending Recession Due to Tariff Policies (NY Post, 4 minute read)
Larry Fink, CEO of BlackRock, has expressed concerns that the U.S. is likely already in a recession, attributing this to the aggressive tariff policies introduced by President Trump. Fink highlighted that most CEOs he has spoken with share this sentiment, noting significant market declines and economic uncertainty as key indicators
BlackRock’s CEO believes the U.S. may already be in a recession
Aggressive tariff policies are cited as primary contributors to economic downturn
Market volatility and CEO sentiments reflect growing economic concerns
Trump’s new tariffs construct a $1 trillion trade wall around the U.S. economy (CNBC, 6 minute read)
President Trump’s sweeping new tariffs, projected to cost U.S. businesses over $654 billion annually, with potential to exceed $1 trillion, have stunned economists and investors. The approach, based on trade deficits rather than direct reciprocity, has upended expectations and triggered fears of global retaliation. These tariffs are poised to spark inflation, supply chain disruptions, and a reevaluation of global trade flows, hitting sectors from tech to agriculture to healthcare
U.S. companies may face $1–2 billion in daily tariff costs, with major hits expected in California and Texas
The tech sector, especially firms like Apple, Alphabet, Meta, and Amazon, may be targeted for retaliation due to their massive digital trade surplus
Tariffs on imports — including goods where the U.S. lacks manufacturing capacity like apparel, footwear, and medical devices — could drive up prices and limit product availability
Jerome Powell warns on Trump’s tariffs: High inflation could be here to stay (CNN, 4 minute read)
Federal Reserve Chair Jerome Powell warned that President Trump’s sweeping tariffs — including a new 10% tariff on all U.S. imports starting April 6, with further increases expected April 9 — are likely to drive inflation higher and could trigger stagflation: a mix of rising prices, slowing growth, and higher unemployment. Economists at JPMorgan estimate a 60% chance of a global recession if tariffs remain in place. Consumer prices, especially for cars, are projected to rise sharply
Despite Trump urging the Fed to cut rates, the central bank is keeping interest rates steady, waiting to assess the full economic impact
Powell said uncertainty should decline by 2026, once the effects of the trade policies fully materialize
Consumer confidence dropped to its lowest level since January 2021; small-business uncertainty spiked to its 2nd-highest level since 1973
Dow Tumbles 2,200 Points, Bonds Rally After China Retaliates Against Trump Tariffs (The Wall Street Journal, 5 minute read)
Global markets were rocked last Friday as the U.S.-China trade war escalated dramatically. After President Trump imposed sweeping new tariffs, China responded with a 34% levy on all U.S. imports starting next Thursday. The surprise magnitude of the tariffs and the aggressive retaliation dashed hopes of a near-term resolution, triggering massive sell-offs across global markets. The S&P 500 dropped 6%, the Nasdaq fell 5.8% — officially entering bear market territory after a 20% decline from its peak — and the Dow Jones Industrial Average lost 2,231 points in a single day
The two-day market rout erased a record $6.6 trillion in global equity value
Only 14 stocks in the S&P 500 rose on Friday, while 28 stocks plunged more than 10%
European markets dropped over 4%, and U.S. oil prices slid to $62 per barrel — the lowest since 2021
US stocks dip after careening through a manic day following Trump’s latest tariff threat (AP News, 5 minute read)
U.S. stock markets experienced extreme volatility on Monday as President Trump threatened to increase tariffs further, sparking fears of a prolonged trade war. The Dow Jones fell 349 points (0.9%), while the S&P 500 slipped 0.2% after dramatic swings driven by rumors of a potential tariff pause, later debunked. Markets are struggling to assess Trump’s intentions: whether tariffs are a negotiating tactic or a long-term economic shift. Investors worry the tariffs will drive inflation higher and slow global growth, putting additional pressure on the Federal Reserve as recession risks rise
False rumors about a 90-day tariff pause briefly pushed markets higher
Global markets also fell sharply — Hong Kong’s Hang Seng dropped 13.2%
Bitcoin dropped below $79,000 amid global market stress, after peaking above $100,000 earlier in the year
The 10-year Treasury yield jumped to 4.20% from 4.01%, signaling reduced expectations for near-term Fed rate cuts
IMPACT & CLIMATE RESILIENCE
Women Created Half of New Businesses Registered in 2024, a Milestone (Inc, 5 minute read)
In 2024, small business creation in the U.S. demonstrated remarkable growth in diversity, innovation, and resilience, with 1.7 million new business applications filed. Women led 49% of these startups, a 69% increase in female-founded businesses since 2019. Minority ownership also saw significant gains, with LatinX and Black founders rising by 25% and 66%, respectively, over 2019 levels, and Asian Pacific founders increasing by 16%. Despite this progress, only 1% of VC funding went to women-led companies
Nevertheless, 65% of new businesses reached profitability in their first year, and 57% hired or plan to hire employees
Generative AI adoption surged, with about half of new businesses using it, up from 21% in 2023; over 80% of those adopters reported significant productivity gains
However, stricter return-to-office mandates across the workforce led to a decline in side-hustle startups, from 45% in 2023 to 34% in 2024
IPO & EXITS
Companies pause US IPO plans as Trump tariffs tank markets (Financial Times, 5 minute read)
Several major US IPOs — including Klarna ($15bn), Medline ($50bn), StubHub, and Hinge Health — have been delayed due to market turmoil caused by Donald Trump’s aggressive tariffs on US trade partners. This wave of IPO pauses comes despite early-year optimism that a Republican administration would fuel a business-friendly environment for listings. These tariffs have sparked fears of a global trade war, leading to sharp declines in stock markets and disrupting IPO plans
Klarna, Medline, StubHub, and Hinge Health had confidentially filed for IPOs but postponed their investor roadshows amid market volatility
Trump's new tariffs triggered retaliatory measures from China, escalating fears of a global trade war and shaking investor confidence
The S&P 500 fell 6% and the Nasdaq dropped 5.8%, reversing earlier optimism for a strong IPO market recovery in 2025
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AI8 Ventures’ Research & Investment Team
