VCA#010: Raising is Easy. Raising Right is Hard. 📬
The week’s clearest signals—from mega rounds to red flags no one’s talking about.
💸 This Week’s Biggest Funding Rounds
xAI raises $10B as the AI arms race escalates to trillion-dollar stakes
Elon Musk’s xAI just locked in $10B in a mix of debt and equity, propelling its valuation well past $20B as it builds out the Grok chatbot and expands compute infrastructure. The raise includes a $5B strategic equity infusion and highlights the continuing capital intensity of foundational AI models.
With OpenAI, Anthropic, and xAI now securing tens of billions, the race to dominate the frontier model layer is entering unprecedented financial territory.
This week’s funding activity across sectors reflects this high-conviction capital environment:
Cato Networks secured $359M in Series G funding led by LightSpeed Venture Partners. The Israeli SASE (Secure Access Service Edge) company is expanding its global cloud network as enterprise cybersecurity spending intensifies.
Klar raised $170M in growth funding from General Atlantic, Santander, and others. The Mexican fintech platform is now valued at over $800M as it scales its digital banking services across LATAM.
Climeworks secured $162M to advance its direct air capture (DAC) technology, backed by Microsoft’s Climate Innovation Fund and other major sustainability investors. The Swiss startup remains a key player in the carbon removal ecosystem.
Savvy Wealth closed a $72M Series B round led by Industry Ventures. The AI-driven wealth management platform is building out tools for modern financial advisors in the U.S.
Levelpath raised $55M in Series B funding led by Battery Ventures. The San Francisco-based startup helps companies streamline procurement using AI, as enterprise efficiency tools gain traction.
Terrana Biosciences launched with $50M in Series A funding from Flagship Pioneering. The agtech company is pioneering RNA-enabled traits to drive agricultural resilience and crop yield innovation.
Genesis AI secured $105M in seed funding co-led by Eclipse and Khosla Ventures. The company is developing next-gen AI models for robotics, continuing momentum in the embodied AI space.
🐣 New Venture Funds
America’s Frontier Fund announced Frontier Fund I, targeting $315M to invest in national-security-critical technologies including AI, quantum, semiconductors, and biotech. Backed by $140M in private capital and $175M in SBA-guaranteed loans, the Arlington-based fund is part of a growing wave of U.S. government-aligned venture initiatives.
Khosla Ventures is raising $4.45B across three new vehicles: a $1.95B flagship Fund IX, $1.25B Growth Fund III, and $750M Seed Fund VII. The firm will continue backing high-conviction bets in AI, deep tech, and category-defining software across stages from seed to late growth.
Menlo Ventures is targeting $1.5B across two funds—$650M for its early-stage Menlo XVII and $850M for growth-stage Menlo Inflection IV. With strong exposure to firms like Anthropic, Menlo plans to concentrate capital on AI-first startups and infrastructure.
Greenoaks Capital closed Fund VI at $2.5B, increasing from its prior $2.1B raise. The San Francisco-based firm, known for backing late-stage winners like Stripe and Databricks, will continue investing with a concentrated, high-conviction strategy.
Catalio Capital closed Nexus Fund IV at over $400M to back 30–35 startups in biotech, medtech, and diagnostics. Based in New York, the firm specializes in life sciences and will focus on science-led, IP-heavy teams across North America.
📉 Signals & Red Flags
Early signs of trouble: layoffs, executive exits, investor shakeups
Intel halts auto‑chip ops, exits 15–20% of workforce
Intel announced it will shut down its Munich automotive chip division and cut 15–20% of global staff—over 100 roles in Santa Clara already notified under WARN. This marks a significant pivot back to core data‑center and AI investments.
Microsoft prepping third round of layoffs, sales chief takes sabbatical
Microsoft is planning another wave of workforce reductions in sales and marketing this week, following around 6,000 cuts in May and June. CCO Judson Althoff is also out on sabbatical amid the AI-driven restructuring.
Tech layoffs continue through June—47,999 U.S. roles cut
June logged nearly 48,000 U.S. job losses—the highest Q2 total since 2020—with 2025 on track to beat last year’s figures, per Challenger Gray & Christmas.
Biotech layoff wave in Q2—1,300+ jobs lost in Mass. alone
At least 18 Massachusetts biotech firms announced layoffs totaling 1,300+ jobs, signaling persistent stress in life-sciences startups.
👑 Who Got Rich This Week? Exits, IPOs & Liquidity Moments
Figma (IPO)
• Raised: ~$660M (estimated) | Valuation: ~$12.5B–14B | Market: United States
Design giant Figma made its long-anticipated public debut. CEO Dylan Field retained 56.5M Class B shares (51.1% voting power), securing his position as controlling shareholder. Key VC firms like Index Ventures (65.9M shares), Greylock (61.5M), and KPCB (55.1M) also cashed in on the moment.
🔗 Dylan Field | Mamoon Hamid | Andrew Reed | Praveer Melwani | Shaunt Voskanian | Kelly Kramer | John Lilly | William McDermott | Lyn Vojvodich Radakovich | Wu-Wallace Family Trust
Chime Financial (IPO)
• Raised: $864M | Valuation: ~$11.4B | Market: United States
Digital banking platform Chime debuted at $27/share, closing up 37% in its first session.
🔗 Christopher Britt (Co-founder, ~$3.2B stake) | Ryan King (Co-founder, ~$2.8B stake)
Cirsa (IPO)
• Raised: €453–521M | Valuation: ~$3.0B | Market: Spain
Spanish gaming company Cirsa, backed by Blackstone, launched a successful IPO after months of anticipation.
🔗 Joaquim Agut (CEO) | Lionel Assant (Blackstone)
CentML (Acquisition by Nvidia)
• Deal Value: ~$400M | Market: Canada
Nvidia acquired Toronto-based AI optimization startup CentML in a quiet but lucrative deal.
🔗 Gennady Pekhimenko (Co-founder & CEO) | Nvidia M&A Team
Accelerant (IPO Filing)
• Target Raise: ~$100M | Market: United States
Specialty insurtech Accelerant, backed by Todd Boehly’s Eldridge, filed to list on the NYSE this week.
🔗 Jeff Radke (CEO & Co-founder) | Todd Boehly
🌍 Regional Highlights
🇺🇸 United States
VC activity in the U.S. remained steady this week, with total deal volume estimated at ~$1.5B. While mega-rounds dominated headlines, early-stage deal flow slowed, with founders reporting longer fundraising cycles. Series B+ deals saw modest rebounds, particularly in fintech, AI infra, and healthcare. U.S. startups still captured over half of global VC allocation.
🇸🇦 MENA
MENA's venture ecosystem showed consistent momentum, supported by sovereign funds and sector-specific accelerators. Q2 deal activity is up 18% QoQ, with the UAE and Saudi Arabia driving over 70% of funding volume. Fintech, logistics, and AI-led health startups remain key focus areas. Investor caution persists at the pre-seed stage due to LP pressure and exits uncertainty.
🇲🇽 LATAM
Latin America's funding pace remained soft, with weekly totals under $200M and YoY deal activity down nearly 30%. Currency instability and limited exit pathways continue to challenge VC confidence. Still, niche sectors like agritech, climate tech, and fintech saw continued traction. Founders increasingly explore debt and revenue-based financing over equity rounds.
🇪🇺 Europe
European VC pulled in ~$850M across 80+ deals this week, with growing interest in defense-tech and deeptech. Germany, France, and the Nordics led the activity, while Portugal and Eastern Europe saw rising investor attention. IPO markets remain stalled, but evergreen funds and private secondaries are offering alternative liquidity paths. AI and quantum remain top thematic bets.
📊 Recent Publications & Reports
Signs of a Pick-Up in Venture Capital Exits – Financial Times
VC exit volume reached $67.7B in Q2 2025—the strongest since 2021—but still lags healthy return ratios. Read more
AI is Eating Venture Capital – Axios / PitchBook
AI startups received 53% of global VC in H1 2025, rising to 64% in the U.S.—a historic allocation shift. Read more
IPO Market Shifts in 2025 as Venture Capital Outperforms Private Equity – ECM Pulse
VC-backed IPOs posted average returns of 450%, far outperforming PE-backed listings at 18%. Read more
Q1 2025 CVC Roundtable Survey – Morgan Lewis
Corporate VC rounds were all up-rounds, offering 1× liquidation and non-participating preferred terms. Read more
How AI is Transforming Venture Capital in 2025 – Capix
LLMs are now embedded in VC workflows—powering sourcing, diligence, and portfolio ops. Read more
🎙️ Voices in Venture
Insights from Industry Leaders
Investor Stories 411: Lessons Learned – The Full Ratchet
Neal Patil, Mathias Schilling, and Godard Abel share hard-won lessons in early-stage investing—from conviction to founder dynamics. Listen here
From Power Law to Proprietary Insight: Unlocking Early‑Stage Alpha – The Full Ratchet
645 Ventures joins Nick to explore how top investors shift from pattern matching to proprietary, insight-driven sourcing. Listen here
Figma’s IPO & Melio’s $2.5B Acquisition – 20VC
Harry Stebbings breaks down Figma’s blockbuster IPO, Melio’s low-exit signals, and Oracle’s evolving AI strategy. Listen here
KKR’s Philipp Freise on Europe, AI, and Competing with A16Z – 20VC
Freise discusses PE vs. VC dynamics, Europe’s under penetration, and AI’s reshaping of global capital flows. Listen here
E2147: Startup Valuations, Biotech’s Crunch & AI’s Expanding TAM – This Week in Startups
A sharp roundtable unpacking valuation resets, biotech challenges, and why AI is the industry's most bankable theme. Listen here
E2146: Grammarly–Superhuman Deal, TWiST 500 Interviews – This Week in Startups
Jason breaks down the Superhuman acquisition and features founders from Labelbox and Apptronik on scaling and storytelling. Listen here
✍️ Our Take
Narrative Premiums Are Getting Marked Down:
Startups raised billions selling “vision,” not performance. But the market is correcting. Secondary VC shares are now trading at 40–60% discounts, especially in climate, AI, and B2B SaaS — revealing what portfolios are really worth when hype is stripped away.
The VC Reality Check Is Here:
Despite ~$88B in global VC deployment in Q2 alone, exit value continues to stall. Just 4 VC-backed IPOs closed in June, none with meaningful aftermarket gains. Unicorn creation is slowing — but markdowns are accelerating. The narrative: growth ≠ liquidity.
Co-Founder Drama Now Kills Deals:
VCs are quietly walking away from cap tables with silent cofounders and equity ghosts. One investor this week warned: undisclosed splits and founder fallouts are “deal killers.” LPs are pushing for tighter governance — and founders can’t fake alignment.
EIR ≠ Guaranteed Check:
Entrepreneur-in-Residence roles once opened doors to partner funding. Now? Not so much. Even Itamar Novick admitted many EIRs never raise from the firms they work with. The bar is higher: traction, trust, and timing matter more than proximity.
The Green VC Glow Is Fading:
Green tech is facing a chill. Reuters reported that many clean-energy VC funds are changing hands at steep discounts, as projected returns fail to materialize. ESG dollars are still flowing — but the blind bets are over. VCs want scalable climate wins, not moral victories.
LPs Are Nervous — and Rightfully So:
LPs are staring down vintage 2021 portfolios with poor DPI and zero exits. Internal rates of return on AI and climate-heavy funds have dipped below 10%, and the secondary bid-ask spread is growing. Many are re-allocating to infra, secondaries, and cash-flowing growth equity.
The vibe era is dead.
We’re entering a “proof over pitch” cycle. Startups that can't show efficiency, governance, and real market pull will be culled. The rest? They're raising from leaner, more skeptical VCs who demand skin in the game and a clear path to return.
It’s not a downturn. It’s a detox.
And founders — especially the ones with inflated 2021 term sheets — should act accordingly.
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