Ultra-Unicorns
Week of June 30th, 2025
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STARTUPS
ROUNDS AND UNICORNS
The Week’s 10 Biggest Funding Rounds: AI Continues To Dominate In An Action-Packed Week(Crunchbase, 5 minute read)
Thinking Machines Lab (AI): Raised $2B (Seed) led by Andreessen Horowitz, reaching a $10B valuation. Based in San Francisco, the startup is founded by former OpenAI CTO Mira Murati and focuses on next-gen AI systems
Abridge (Healthcare AI): Raised $300M (Series E) led by Andreessen Horowitz and Khosla Ventures, reaching a $5.3B valuation. Headquartered in Pittsburgh and San Francisco, Abridge provides AI tools that generate clinical notes from doctor-patient conversations
Harvey (Legal Tech):Raised $300M (Series E) co-led by Kleiner Perkins and Coatue, with a $5B valuation. Based in San Francisco, Harvey builds AI co-pilots for lawyers and professional services, with over $800Mraised to date
Kalshi (Prediction Markets): Raised $185M (Series C) led by Paradigm, reaching a $2B valuation. Based in New York, Kalshi enables trading on real-world event outcomes across politics, economics, and sports
Digital Asset (Blockchain): Raised $135M led by DRW Venture Capital and Tradeweb Markets, bringing total funding to over $440M. Based in New York, it develops privacy-enabled blockchain infrastructure for capital markets
Continuation funds find their footing in private credit(Pitchbook, 4 minute read)
As private credit funds face mounting liquidity pressures and disappointing returns, continuation funds—long used in private equity—are now being adopted in credit markets. Slower deal realizations and extended holding periods have left many vintage funds (2017–2019) with DPI multiples below 1.0x, meaning they haven’t returned all invested capital. This is raising concerns among LPs and limiting appetite for new funds
To address this, managers are transferring assets into credit continuation vehicles, backed by secondary buyers
Unlike PE, credit continuation portfolios often contain diverse pools of 100+ loans, with lower return targets and different underwriting profiles
While still early in adoption, these structures are gaining attention as a portfolio management tool and liquidity solution
The Rise Of The Ultra-Unicorns: $5B+ Startups Are Leading The Private-Market Herd In 2025 (Crunchbase, 5 minute read)
An elite tier of private companies valued at $5 billion or more is expanding rapidly in 2025, despite broader VC market challenges. Though only 13% of the Crunchbase Unicorn Board by count, these firms represent over 50% of total board value ($3.5 trillion) and funding raised ($500 billion). Seventeen companies have joined this $5B+ club in the first half of 2025 alone—outpacing 2024—driven largely by major rounds for OpenAI ($40B) and Scale AI ($14.3B)
Most of these firms were founded between 2011–2018 and are U.S.-based, though China, India, and the U.K. also have a strong presence
Nearly 30% were last valued within the past two years, with many still holding onto inflated 2021-era valuations
While exit activity remains sluggish, five companies have already exited in 2025, suggesting some momentum
ECONOMIC SNAPSHOT
Jay Powell pushes back on calls for Federal Reserve rate cuts as soon as July (Financial Times, 3 minute read)
Federal Reserve Chair Jay Powell signaled that interest rate cuts are unlikely before September, pushing back against President Trump’s calls for immediate action. Speaking before Congress, Powell cited the need to assess the inflationary impact of Trump’s tariffs over the summer, warning of potentially persistent price pressures. While Fed governors Michelle Bowman and Christopher Waller support a July rate cut due to easing inflation data, Powell emphasized a cautious, data-driven approach
Trump intensified pressure demanding a cut of two to three points. Still, Powell insisted political attacks have “no effect” on the Fed’s decisions
The Fed’s benchmark rate remains at 4.25–4.5%, considered restrictive
Internal forecasts are divided: while ten officials support up to two cuts in 2025, seven see no change ahead, underscoring the growing split within the central bank
Trump may name a ‘shadow’ Fed chair, an unprecedented development in American history (CNN, 5 minute read)
President Donald Trump plans to announce a nominee to replace Federal Reserve Chair Jerome Powell—despite Powell's term running through May 2026—raising concerns about creating a “shadow Fed chair”. Trump said he wants someone who will immediately cut interest rates, intensifying his long-standing frustration with Powell's resistance
Experts warn that such an early move would be unprecedented in the Fed’s 111-year history, potentially confusing markets and damaging the central bank’s independence
Trump’s potential candidates include Scott Bessent, Kevin Warsh, Christopher Waller, and David Malpass
Although the dollar weakened on the news, stocks remained steady, suggesting markets are cautiously watching
US economy shrank 0.5% in the first quarter, worse than earlier estimates had revealed (AP, 4 minute read)
The U.S. economy contracted 0.5% in Q1 2025, marking the first economic shrinkage in three years, according to the Commerce Department. The unexpected revision from -0.2% highlights the economic impact of President Trump’s trade tariffs, which prompted a 37.9% surge in imports as businesses and consumers rushed to buy goods ahead of price hikes—cutting nearly 4.7 percentage points from GDP. Consumer confidence also fell sharply in June, with the Conference Board’s index dropping to 93, its lowest since the pandemic, amid rising tariff anxiety. Key drivers of the downturn include:
Consumer spending slowed sharply to 0.5%, down from 4% in Q4 2024
Government spending fell 4.6%, the largest drop since 2022
Core GDP, excluding trade and inventories, grew just 1.9%, down from 2.9% in Q4
Despite this slump, analysts expect a rebound in Q2, with 3% growth forecasted, as the tariff-related import surge normalizes. The first official Q2 estimate is due July 30
The S&P 500 just ended the day inches away from completing a $9.8 trillion roundtrip. Here’s what’s going on (CNN, 5 minute read)
The S&P 500 is within 1% of its all-time high, recovering nearly $9.8 trillion in market value since its April low. After dropping nearly 19% earlier this year amid tariff and geopolitical turmoil, the index has surged 23% on renewed investor optimism. Strong business investment and easing Middle East tensions have helped offset concerns about weak Q1 GDP (-0.5%) and the slowest consumer spending in over four years
Markets appear to be looking past backward-looking data, instead betting on trade deal progress and budget approvals in July
However, the rally comes amid fresh concerns over Federal Reserve independence
The U.S. dollar dropped to a three-year low following reports that President Trump may soon name Jerome Powell’s successor nearly a year ahead of schedule
IPO & EXITS
Circle resumes its post-IPO rally after pullback, stablecoin issuer boosts Coinbase (CNBC, 5 minute read)
After soaring over 600% since its June 5 IPO, Circle experienced a brief pullback this week, with shares falling 15%, before rebounding 7% on Thursday. The volatility comes amid investor speculation over crypto regulation and the Federal Reserve’s pending rate decisions—both of which directly affect Circle’s interest-based revenue model from USDC reserves
Meanwhile, Coinbase—which shares revenue from USDC and earns full interest on USDC held on its platform—gained 15% during the same three-day period and is on pace for a 52% monthly gain, its best since November
The GENIUS Act, which sets a national framework for stablecoins, passed the Senate and now awaits House review. A competing proposal, the STABLE Act, is also in play
US IPO Stocks Jump Over 50% in 2025 as Investor Appetite for Risk Grows (Bloomberg, 5 minute read)
The U.S. IPO market is regaining momentum in 2025, with a 45% increase in funds raised year-over-year and average gains of 53% among new listings — driven by strong performances from firms like Circle Internet Group and CoreWeave. Despite lingering uncertainty from Trump-era tariffs and geopolitical risks, investors have shown surprising resilience, rekindling optimism for the second half of 2025 and into 2026
While the first half saw only 33 sizable IPOs (down from 41 last year), analysts expect a wave of $1 billion-plus debuts post–Labor Day
Sectors like fintech, crypto, software, and biotech are poised to dominate, especially as private companies like OpenAI highlight the limits of private capital markets and begin eyeing public listings for broader liquidity
Challenges remain: SPAC activity skews volume data, and the valuation gap between public market expectations and private funding highs from 2021 has delayed many listings
WHAT A TIME TO BE ALIVE
The US is propping up climate tech VC deals—for now (Pitchbook, 4 minute read)
While global climate tech VC investment declined for a third straight year in 2024—reaching $37.8 billion, down 37.6% from its 2021 peak—the sector is showing signs of strategic recalibration rather than retreat. In North America, deal value dipped just 7.5%, reflecting resilience despite policy uncertainty under the Trump administration and supply chain pressures
Investors are becoming more selective, channeling capital into high-impact, scalable solutions
Q1 2025 saw a stable $9 billion in deal value, even as overall deal count fell—suggesting a shift toward larger, conviction-led investments
Experts say startups focused on energy expansion, efficiency, and resilience are poised to lead the next wave of growth
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Happy reading,
8alpha.ai’s Research & Investment Team