Crunchbase Data Reveals VC Frenzy in 2025

By John Pranay (Editor)

A frenzied year in venture capital (VC) has come to a close, with nearly 700 seed-stage rounds of $10 million or more in 2025, according to Crunchbase data. The hottest AI companies have raised hundreds of millions in fresh capital every few months, and founders with promising ideas have commanded multibillion-dollar valuations. However, some VCs are warning of a potential reckoning in 2026, citing concerns about the sustainability of the current market.

The VC landscape has been marked by a frenzy of activity, with VCs writing big checks into AI startups. Despite concerns about a bubble, many VCs remain bullish about the potential of AI and expect to see huge winners emerge. However, the market has been rattled by concerns about the trillions of dollars spent on AI data centers, with stocks like Coreweave and Nvidia experiencing sharp declines. Firms are on track for their worst year of fundraising since 2017, according to Venture Capital Journal.

• 2025: Nearly 700 seed-stage rounds of $10 million or more, an all-time high according to Crunchbase data.

• Summer 2025: Former OpenAI Chief Technology Officer Mira Murati raises $2 billion at a $10 billion valuation.

• September 2025: Eric Zelikman, a top AI researcher, departs xAI and begins raising $1 billion at a $4 billion valuation for his new startup.

• This month: Naveen Rao, former head of AI at Databricks, announces $475 million in seed funding at a $4.5 billion valuation for his new startup, Unconventional AI.

The current VC landscape is reminiscent of the dot-com boom of the late 1990s, with many VCs warning of a potential bubble. However, this is not the first time the VC industry has experienced a frenzy of activity. In the early 2000s, the rise of social media and e-commerce led to a surge in VC funding, with many startups raising large sums of money without generating significant revenue. This period

The VC industry's focus on AI has led to a surge in funding for startups in this space. However, this has also created a sense of FOMO (fear of missing out) among VCs, who are eager to invest in the next big thing. This has led to a situation where VCs are writing big checks into AI startups without fully understanding the potential risks and rewards. As a result, the market has become increasingly frothy, with many startups raising large sums of money without generating significant revenue.

The current VC landscape is characterized by a frenzied pace of activity, with VCs writing big checks into AI startups. However, this pace of change is unsustainable, and a correction is likely to occur in 2026. Crucially, this correction will not be limited to AI startups, but will also affect the broader VC industry. As the market becomes increasingly frothy, VCs will need to reassess their investment strategies and focus on more sustainable opportunities. This suggests that the VC industry will undergo a significant shift in 2026, with a greater emphasis on long-term value creation rather than short-term gains.

Overall, the medium-term sentiment around this story is Bearish.

1. 2025 was the year of VC FOMO. A 'reckoning' might be coming in 2026. — https://www.businessinsider.com/vc-fomo-a-reckoning-might-be-coming-in-2026-2025-12

Methodology: This analysis combines real-time data aggregation from manually selected global sources with advanced AI synthesis, engineered to provide neutral and data-driven insights.