Figma IPO & AI Spark Hope Amid Flat Startup Funding

The global venture funding landscape presented a nuanced picture in July 2025, with total investment reaching $29.7 billion. While this figure remained flat compared to the same period last year, it marked a notable decline from the $43 billion deployed in June. Despite the month-over-month dip in capital, the market showed promising undercurrents, largely driven by the continued dominance of artificial intelligence as a funding magnet and the stellar public debut of Figma, which many hope will unlock the long-stalled IPO market for a host of mature, high-growth technology companies.

A closer look at funding distribution reveals a concentration of capital in later stages, with approximately 60% of last month’s venture funding directed towards late-stage rounds. Early-stage deals accounted for roughly 30% of investment, while seed-stage companies received about 10%. This trend underscores a broader market preference for established ventures, as funding continued to gravitate towards larger rounds, particularly those exceeding $200 million. Corporate entities and private equity firms predominantly led these substantial deals. Overall, the first seven months of 2025 have seen a 23% increase in global venture funding, largely propelled by a series of multi-billion-dollar investments within the burgeoning AI sector.

The most significant event in the venture world last month was undoubtedly Figma’s blockbuster Initial Public Offering. The San Francisco-based design collaboration platform, a 13-year-old company that matured through an earlier technology wave while adeptly integrating with the shift to AI, priced its shares at $33. By the close of its first trading day, Figma’s stock had soared to more than three times its IPO price, cementing its status as arguably the most impactful tech brand to debut on public markets since 2022. This resounding success could serve as a powerful catalyst, encouraging more tech companies that have been patiently waiting on the sidelines – those still demonstrating robust growth, substantial revenue, and profitability or a clear path to it – to pursue their own public listings.

Artificial intelligence continued its unparalleled ascent, attracting the largest funding rounds in July. The most substantial investment of the month was a staggering $5 billion infusion into xAI, an Elon Musk-backed venture, with lead funding provided by another of his companies, SpaceX. This colossal deal stands as the third-largest funding round globally this year, trailing only OpenAI’s $40 billion SoftBank-led round announced in March and Meta’s $14.3 billion investment in Scale AI in June. Collectively, large rounds of $200 million or more contributed $11.4 billion to the July total, representing approximately 38% of all private financing directed towards venture-backed companies. These massive investments were predominantly orchestrated by corporate entities, private equity firms, and other alternative investors, with only two rounds above $200 million—OpenEvidence and Lovable—being solely led by traditional venture capital firms.

Geographically, the United States maintained its dominant position in startup funding, securing $17 billion in July. This figure represents 58% of the total global venture investment for the month. Within the sectoral breakdown, AI remained the undisputed leader, commanding $11 billion in funding, which accounted for a significant 37% of all investments. Healthcare and biotechnology followed, attracting $5.7 billion, while financial services saw a substantial boost, doubling its year-ago figures to reach $4.6 billion last month.

Figma’s IPO delivered a substantial victory for its early investors, including Index Ventures, Greylock, Kleiner Perkins, and Sequoia Capital, whose strategic investments from seed through Series C rounds yielded billions in exit value, enough to return multiple funds. However, the broader market still faces the challenge of unlocking significant value. With an estimated $1 trillion of capital invested across more than 1,600 companies valued at unicorn status, a vast amount of wealth remains tied up in private entities, eagerly awaiting viable exit pathways to return capital to investors.