Debt Soars
Week of June 9th, 2025
Welcome to AI8’s weekly newsletter, your ultimate source for curated insights and updates from the dynamic world of venture capital!
We’ve scoured the vast landscape of the web to bring you a comprehensive roundup of the industry’s top news articles, all in one convenient place. We keep you ahead of the game and in the know about all things related to the vibrant world of investments
STARTUPS
ROUNDS AND UNICORNS
The Week’s Biggest Funding Rounds: Defense Tech Leads Week With Anduril’s $2.5B Raise(Crunchbase, 5 minute read)
Anduril Industries (Defense Tech): Raised $2.5B (Series G) led by Founders Fund, doubling its valuation to $30.5B. Based in California, Anduril develops AI-enabled defense systems and will use the funding to expand R&D and scale production
Impulse Space (Spacetech): Raised $300M (Series C) led by Linse Capital. Headquartered in Redondo Beach, CA, Impulse Space builds orbital spacecraft that deliver satellites into precise orbits; total funding now $525M
TAE Technologies (Fusion Energy): Raised $150M in new funding from Chevron, Google, and NEA. Based in Foothills Ranch, CA, TAE develops commercial fusion power systems; total equity funding now $1.5B
Fever (Events Platform): Raised $100M from L Catterton and Point72. Founded in New York, Fever operates a platform for discovering and booking live experiences such as concerts, sports, and cultural events
Infleqtion (Quantum Computing): Raised $100M (Series C) from Glynn Capital Management, Morgan Stanley’s Counterpoint Global, S32, and SAIC. Based in Boulder, CO, Infleqtion develops atom-based quantum systems for sensing and computing applications
After No Funding For Years, These Startups Recently Scooped Up Big Rounds (Crunchbase, 3 minute read)
For venture-backed startups, going four years between funding rounds is rare — but these are unusual times. After record-high startup investments in 2021 led to inflated valuations, many companies paused raising new funds. Some survived on existing reserves; others struggled or failed. Recently, a number of these patient startups are securing fresh capital
Crunchbase reports that at least 18 heavily funded startups that last raised in 2021 or earlier have closed new rounds this year
However, valuations are often undisclosed, and some companies are raising smaller rounds than before
While raising capital after a long gap is generally positive, it reflects varying levels of investor confidence — some companies maintain strong backing, while others adapt through pivots or valuation cuts
North America takes the bulk of AI VC investments, despite tough political environment (Techcrunch, 5 minute read)
Despite political and regulatory headwinds in the U.S., North America remains the dominant hub for AI venture capital. Between February and May 2025, North American AI startups attracted $69.7 billion across 1,528 deals — vastly outpacing Europe ($6.4 billion) and Asia ($3 billion)
Under Trump’s second term, cuts to AI research funding and restrictive policies have created uncertainty, yet global investors continue to bet heavily on U.S.-based innovation
In 2025 so far, North America accounts for 86.2% of global AI VC funding ($79.74 billion), with no significant shift toward Europe or Asia despite their efforts to boost local AI ecosystems
Global Venture Funding Slowed In May While Startup M&A Picked Up, Led By Large OpenAI Acquisitions (Crunchbase, 3 minute read)
Global venture funding reached $21.8 billion in May 2025, down 13% quarter-over-quarter and 33% year-over-year. The U.S. remained dominant, capturing 56% of global funding. While funding and IPO activity remained sluggish (only 5 IPOs >$1 billion), M&A surged, with $24.7 billion in disclosed exit value across 168 deals—the second-highest month since early 2024 (behind March’s $58.4 billion)
AI led funding with $5.9 billion (just over 25% of total), followed by healthcare/biotech ($5.4 billion) and financial services ($2.9 billion)
Notable M&A deals included: OpenAI acquired Io ($6.5B) and Windsurf ($3B), and Coinbase acquired Deribit
Notable IPOs: eToro, Hinge Health, Shanghai Auntie, Ather Energy, MNTN
ECONOMIC SNAPSHOT
Trump’s tariff fallout? It’s worse than we previously thought, says OECD (CNN, 3 minute read)
President Trump’s renewed trade war is expected to inflict greater economic harm than previously projected, according to the OECD. The organization downgraded its 2025 U.S. growth forecast to 1.6% (from 2.2%) and lowered global growth expectations to 2.9% for both 2025 and 2026. Higher tariffs, retaliatory measures, declining immigration, and U.S. federal workforce cuts are driving the slowdown
The OECD warns that rising global tariffs and uncertainty are undermining trade, investment, and confidence, risking lasting damage
The impact will be concentrated in the U.S., Canada, Mexico, and China—nations most exposed to Trump’s new trade barriers
Businesses now face greater disruption than during the 2018–2019 U.S.-China trade tensions
Meanwhile, Trump is pressuring the Federal Reserve to cut interest rates, though Fed Chair Powell remains cautious amid the evolving economic risks
The US economy added 139,000 jobs in May, slightly more than expected (CNN, 6 minute read)
The U.S. labor market slowed in May, adding 139,000 jobs, slightly above expectations but down from April’s revised 147,000. The unemployment rate held at 4.2%, while wage growth continued to outpace inflation. Underlying data suggest increasing fragility: 91% of job gains were concentrated in health care and social assistance, and leisure and hospitality sectors; manufacturing lost 8,000 jobs; and the federal government shed 22,000 jobs—its fourth consecutive month of losses—amid Trump administration cuts
March and April job gains were revised down by 95,000, bringing this year’s average monthly gain to 124,000—the lowest for January–May (excluding recessions) in 30 years
The labor participation rate declined by 0.2 percentage points to 62.4%, with notable exits among women over 55 and prime-age men
Economists warn that Trump’s unpredictable trade policies, deep federal spending cuts, and reductions in immigration are elevating recession risks
Trump bill set to add trillions to US debt pile – can America stop it climbing? (The Guardian, 5 minute read)
Despite bipartisan pledges for fiscal responsibility, the U.S. national debt continues to climb, reaching $35.46 trillion last year—up from $24.07 trillion in 2015 and $14.46 trillion in 2008. Trump’s latest spending proposals risk adding further to this burden, drawing criticism from Republicans like Rand Paul and business leaders like Elon Musk. Meanwhile, Moody’s downgraded the U.S.'s last major top-tier credit rating, projecting federal debt to rise from 98% of GDP in 2024 to 134% by 2035, amid rising interest payments and persistent deficits
Trump’s mix of deep tax cuts and spending hikes contrasts with his calls to scrap the debt ceiling entirely, fueling market unease
Economists warn that without structural changes, this path could trigger an economic crisis within three years, according to investor Ray Dalio
Despite past administrations' attempts to balance priorities—Obama’s health reforms or Clinton-era spending discipline—Trump’s fiscal approach and calls to default or restructure debt raise new uncertainties about the U.S.'s long-term financial stability
Donald Trump tells Jay Powell to cut rates as data raises concern for US economy (Financial Times, 4 minute read)
Donald Trump is pressuring Federal Reserve Chair Jay Powell to cut U.S. interest rates, citing weak economic data: ADP private sector hiring rose by just 37,000 jobs in May (lowest since March 2023), and the ISM services index showed a slight contraction. Trump criticized Powell on Truth Social, comparing the Fed’s current rate of 4.25%-4.5% with the European Central Bank’s nine rate cuts this year
While Trump’s protectionist policies and budget cuts have yet to trigger a recession, the soft data fuels fears of an economic slowdown
Powell, who met with Trump last week, reiterated that Fed decisions remain data-driven and non-political, despite Trump’s ongoing public attacks
Notably, Trump no longer seeks Powell’s removal before his term ends in May 2026
IPO & EXITS
Wall Street Embraces Crypto: 4 IPO Listings In 7 Months (Forbes, 7 minute read)
Crypto firms are increasingly entering public markets, signaling a new phase of institutional credibility and transparency for the sector. Circle, issuer of USD Coin (USDC), debuted on the NYSE by raising $1.05 billion at $31 per share, valuing the company at roughly $8 billion—the largest crypto-related IPO since Coinbase’s 2021 listing. Key market tailwinds include the maturing of crypto firms into fintech-like businesses, a more crypto-friendly U.S. regulatory stance under the Trump administration, growing institutional buy-in from players like BlackRock and Visa, and improved investor protections via public markets
Other recent moves include Galaxy Digital’s uplisting to Nasdaq, eToro’s IPO at a $5.6 billion valuation, and Exodus’ NYSE listing ($7 billion valuation), Ledger, Fireblocks (~$8 billion), Chainalysis, Kraken, and Revolut
As 2025 unfolds, the convergence of crypto and traditional finance is accelerating, with crypto-native firms building sustainable business models and accessing capital in ways that promote long-term growth and market discipline
Morgan Stanley's Evan Damast Says IPOs Are a Go After Tariff Turmoil (Bloomberg, 4 minute read)
U.S. IPO activity is rebounding post-Trump’s April tariff shock, with $25 billion in IPOs so far in 2025 (up 40% YoY). Recent listings include Hinge Health, MNTN, eToro, and Circle Internet ($1.1 billion raised). Volatility is prompting firms to act decisively while AI-driven demand is also shaping markets — CoreWeave went public in March and has since raised $2 billion in private debt
Meanwhile, London’s IPO market faces setbacks: Wise is shifting its listing to the U.S.; Cobalt canceled a planned $230 million IPO
In M&A: Anglo American is preparing to sell De Beers; Salesforce acquired Informatica for $8 billion; CoinFlip may seek a $1 billion sale; and Kimberly-Clark is spinning off Kleenex/tissue businesses in a $3.4 billion JV with Suzano
Private equity remains active: Neuberger Berman raised $4 billion for a new secondary fund
Circle IPO leaves $1.72 billion on the table, seventh biggest underpricing in decades (Fortune, 5 minute read)
Circle Internet’s IPO on June 5 exemplified extreme IPO underpricing: shares were sold at $31 (raising $1.1 billion), but closed Day 1 at $82.84 (a 167% gain), meaning Circle left $1.72 billion on the table—7th largest IPO shortfall since 1980. This forgone cash was nearly twice Circle’s pre-IPO cash balance ($849 million)
Circle now trades at a $16.6 billion market cap, with a PE ratio of 106 based on $157 million in 2024 earnings
Its model hinges on earning interest (currently ~4.2%) from reserve holdings while paying nothing to USDC holders
But if competition rises and rivals offer yield, Circle’s growth — and the missed $1.7 billion cushion — could prove critical
WHAT A TIME TO BE ALIVE
US VC female founders dashboard (Pitchbook, 5 minute read)
Venture capital funding for female founders has stabilized following a sharp decline from 2021 peaks. While the share of total deals involving women-founded or co-founded companies has decreased, these companies are securing a growing proportion of the capital raised. A comprehensive dashboard tracks 16 years of U.S. investment trends for women founders, offering insights into deal counts, capital raised by state, industry, and stage, as well as highlighting notable female-founded startups and firms
In Q2 2025, co-founded female companies reported $8.7 billion in capital invested and a total of 395 deals, compared to $11.1 billion in capital and 650 deals in Q1 2025
In terms of deal count, so far 2025, only female-led companies accounted for 5.7% of the total, while female and male-led companies together represented 17.7%
Regarding capital allocation, female-led companies received only 0.7%, whereas female and male-led companies collectively received 43.3%
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Happy reading,
8alpha.ai’s Research & Investment Team
