Spending Split
Week of October 20th, 2025
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STARTUPS
ROUNDS AND UNICORNS
The Week’s 10 Biggest Funding Rounds: Biotech Dominates A Busy Week (Crunchbase, 5 min read)
Kailera Therapeutics (Biotech): The Waltham, MA-based company developing obesity treatments raised $600 million in a Series B led by Bain Capital Private Equity. Funds will advance its injectable therapy into Phase 3 trials by year-end
Bond (Aviation): Fractional jet ownership platform Bond raised $350 million in debt and equity, including $320 million from KKR-managed funds and $30 million from founding partners
Deel (HR Tech): Payroll and compliance giant Deel secured $300 million from Ribbit Capital, Andreessen Horowitz, and Coatue at a $17.3 billion valuation, after surpassing $1 billion in annual recurring revenue
Vantaca (Business Software): Wilmington, NC-based Vantaca raised over $300 million from Cove Hill Partners at a $1.25 billion valuation to expand its property management software for homeowners associations
Kardigan (Biopharma): Cardiovascular drug developer Kardigan raised $254 million in a Series B from T. Rowe Price, Fidelity, Sequoia Heritage, and Arch Venture Partners, bringing total funding to $554 million
Amazon outage breaks much of the internet (TechCrunch, 2 min read)
A major Amazon Web Services (AWS) outage early Monday took down large portions of the internet, disrupting websites, banks, and government services worldwide. Amazon confirmed the issue, which began around 3 a.m. ET, was “fully mitigated” after several hours of downtime caused by a DNS malfunction, the system that translates web addresses into IP addresses
The outage impacted major apps including Coinbase, Fortnite, Signal, and Zoom, as well as Amazon’s own Ring products
Because AWS powers a significant share of the web, hosting about 30% of the global cloud market, millions of businesses and organizations were affected
The incident marks one of the largest web disruptions since CrowdStrike’s 2024 global outage, which crashed millions of computers
Silicon Valley spooks the AI safety advocates (TechCrunch, 4 min read)
Silicon Valley’s tension with the AI safety movement escalated this week after White House AI & Crypto Czar David Sacks and OpenAI Chief Strategy Officer Jason Kwon accused safety advocates of self-interest and hidden agendas. Sacks claimed that Anthropic, the only major AI lab to support California’s new AI safety law (SB 53), was engaging in “regulatory capture,” while Kwon confirmed OpenAI had issued subpoenas to seven AI safety nonprofits, including Encode, seeking communications with Elon Musk and Mark Zuckerberg. The move followed Musk’s lawsuit accusing OpenAI of abandoning its nonprofit mission
Critics say the subpoenas are an attempt to intimidate watchdog groups and silence dissent as AI regulation gains traction
The controversy highlights a growing divide between AI developers and regulators: while OpenAI’s researchers warn of AI risks, its policy arm opposes state-level oversight
The backlash reflects Silicon Valley’s struggle to balance rapid growth with growing public and political demands for accountability
‘Too big:' VCs aren’t sweating OpenAI’s AI agent development push (PitchBook, 3 min read)
At OpenAI’s third annual Developer Day, the company launched AgentKit, a new toolkit for building AI agents, prompting venture capitalists to reassess how startups can stay defensible in a market increasingly dominated by big players. The AI agent sector has exploded, with startups raising $6.4 billion across 451 deals in 2025, already surpassing 2024’s total of $4.6 billion from 326 deals. Major recent rounds include Sierra’s $350 million raise and n8n’s $180 million Series C
Investors like James Currier (NFX) argue that while OpenAI’s scale is formidable, smaller startups have an edge through industry specialization and deep customer integration
Currier advises founders to prioritize “defensibility” by embedding AI agents so deeply in enterprise workflows that clients can’t easily replace them
Others say that early enterprise adoption remains the strongest moat, as large corporations move slowly but reward solutions that deliver lasting operational value
ECONOMIC SNAPSHOT
America's wealthiest shoppers are boosting spending — and the US economy — while lower earners pull back (Yahoo Finance, 4 min read)
High-income Americans are increasingly driving U.S. economic growth, widening the spending gap between wealthy and lower-income consumers. According to Bank of America, households in the top third of earners boosted spending 2.6% year over year in September, compared with just 0.6% for the lowest third. Wage growth tells a similar story: the highest earners saw pay rise 4%, while the lowest earners gained only 1.4%, falling behind inflation. This income divergence is reshaping industries across the economy:
Airlines like Delta and United reported 6–9% growth in premium-class revenue, fueled by affluent travelers maintaining demand despite broader economic uncertainty
In the auto sector, new vehicle prices hit a record $50,000+, driven by luxury purchases from wealthier households
The Federal Reserve’s Beige Book confirmed that luxury spending remains strong even as middle- and lower-income households hunt for discounts
Rising stocks, with the S&P 500 up 12% over the past year, are boosting wealthy Americans’ spending and confidence, deepening the post-pandemic consumer gap
‘Empty shelves, higher prices’: Americans tell of cost of Trump’s tariffs (The Guardian, 3 min read)
Americans across income levels say their living costs have surged since President Trump’s tariffs took effect, with families reporting higher prices on everything from groceries to car tires. A new S&P Global study found that companies will pay $1.2 trillion more in 2025 due to tariffs, with two-thirds of that cost, over $900 billion, passed on to consumers. The Yale Budget Lab estimates that tariffs will cost U.S. households about $2,400 more per year
From North Carolina to Oregon, Americans have cut back on meat, travel, dining out, and nonessentials as everyday items have doubled in price
Many retirees on fixed incomes said they are struggling to keep up, while others are driving farther to find cheaper stores or facing empty shelves
Despite growing public concern, polls now rank tariffs as the second biggest threat to the U.S. economy, Trump has shown no signs of reversing course, even threatening a 100% tariff on Chinese imports beginning on November 1
Could AI Bubble Crowd Out Other Parts Of U.S. Economy? (Investor’s Business Daily, 2 min read)
As cloud giants prepare to report Q3 earnings, investors are watching for early signs of 2026 capital spending trends, particularly amid the AI infrastructure boom that could top $400 billion in 2025. Economists are split over whether this surge will “crowd out” investment in other parts of the U.S. economy. Critics, including SK Ventures’ Paul Kedrosky, warn the AI buildout mirrors the 1990s telecom bubble, when concentrated capital spending hurt U.S. manufacturing competitiveness
Others, like economist Ed Yardeni, downplay those fears, arguing that tech giants such as Meta are largely self-funding their AI data centers through cash flow, not borrowing
Analysts expect AI capital spending growth to slow to 19% in 2026, down from 54% in 2025, with Amazon and Google expected to moderate the most
Still, the AI frenzy continues to reshape corporate balance sheets, with rising depreciation costs and long-term asset investments weighing on margins
Shutdown impact: What it means for workers, federal programs and the economy (AP, 4 min read)
The federal government shutdown, now entering its fourth week, is nearing the second-longest in U.S. history and could surpass the 35-day record from Trump’s first term. The shutdown, which began Oct. 1, has furloughed about 750,000 of 2.3 million federal employees daily, costing taxpayers an estimated $400 million per day in back pay. The administration has also announced plans to fire more than 10,000 workers, though a judge has temporarily blocked the move, calling it politically motivated
Economically, the shutdown could shave 0.1–0.2 percentage points off GDP growth per week, potentially reducing quarterly growth by up to 2.4 points if it lasts the full quarter
The travel industry is losing around $1 billion per week, while Small Business Administration loans worth $860 million weekly are frozen, halting new business lending
The Trump administration has paused or canceled roughly $25.6 billion in infrastructure and clean energy grants, many in Democratic states
IPO & EXITS
VC secondaries continue to grow, but GP-led deals are lagging (PitchBook, 2 min read)
Venture capital secondaries are surging, with GP-led deals reaching $14.6 billion annually and projected to climb another $1.5 billion within two years. Direct secondaries remain the dominant force at around $60 billion a year, up from $50 billion in 2024. Analysts say growth in GP-led continuation funds, where venture firms spin out existing assets, stems from a broader exit stalemate, but the market remains limited to a small number of large firms capable of raising $500 million+ vehicles
Direct secondaries are favored for being cheaper and faster to execute, while portfolio “strip” sales face less demand
However, funds holding stakes in top AI startups continue to attract strong buyer interest
Shutdown Stalemate Brings US IPO Holdouts Off the Sidelines (Bloomberg, 4 min read)
Despite the ongoing U.S. government shutdown, several companies are pushing ahead with unconventional IPO workarounds, surprising Wall Street and signaling strong market momentum. Travel software firm Navan Inc. and electric aircraft maker Beta Technologies Inc. are among seven companies using a 20-day SEC marketing window workaround to proceed with offerings before Thanksgiving
Navan plans to raise up to $960 million at $24–$26 per share, while Beta targets $825 million at $27–$33. Together, the IPOs could add $2.9 billion to U.S. proceeds, which have already hit $34.7 billion in 2025, exceeding last year’s total
Advisers say companies are acting fast to capitalize on favorable market conditions and a record-high S&P 500, even if it means taking on risk during regulatory uncertainty
Others, like Andersen Group and BitGo, are weighing whether to follow suit or wait until 2026, given the narrow window between Thanksgiving and year-end
WHAT A TIME TO BE ALIVE
Women-led venture funds seek to reshape Silicon Valley (Axios, 3 min read)
A growing wave of women-led venture capital (VC) funds is reshaping the startup ecosystem by channeling more investment toward female founders and diversifying decision-making in finance. Since early 2022, over 280 women-led funds in the U.S. have raised $12.6 billion, according to All Raise, still a small fraction of the $76.8 billion raised by all U.S. VC firms in 2024, but a sign of progress
Despite this momentum, women still hold less than 20% of decision-making roles at VC firms, and startups founded or co-founded by women continue to receive a declining share of total venture deals
Leaders say that systemic biases, lack of access to VC networks, and even harassment remain barriers to raising capital
The movement is also entering mainstream awareness through initiatives like the documentary Show Her the Money (2023), which highlights the challenges and triumphs of women founders
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Happy reading,
8alpha.ai’s Research & Investment Team
