My 10 PREDICTIONS for VC in 2025
2025 could go one way or the other, but innovation is constant regardless of market cycles. It's shaping up to be a wild year for VC and the world in general.
#01 | 💸 | Supply/demand shift further toward LPs - funding levels in 2024 were back to 2018/2019, yet LP commitments hit a decade low. GPs will face increased fundraising scrutiny around edge as wider liquidity caution remains.
#02 | 🚀 | A tale of two sides - The largest funds dominated funding in 2024 and are set up to aggressively compete on entry price. Smaller funds look where others aren’t and will price-sensitively invest in great talent. Expecting outperformance here, even if the overall vintage lags.
#03 | 💰 | GP secondaries to reshape liquidity – earlier liquidity opportunities will become mainstream, with $70B of GP secondaries and intra-LP secondary purchases (Sequoia x Stripe). Of particular benefit to sub $100m funds with early entry points.
#04 | 📉 | Bearish on Europe – innovation is the predecessor of regulation. Europe is facing significant regulatory hurdles that will affect competitiveness. Regulation is up, innovation is down. Once funding innovation at 4% of GDP and now just 0.5%, Europe will fall behind.
#05 | 🏆 | Hyper-specialist VC bull – hyper-specialists carry the definition of looking where others don't. Armed with deep domain expertise and outbound deal flow, if you want to underwrite 5x funds, this is a pretty good place to start.
#06 | 🔎 | IPOs in sight - IPO volumes will inch upward from 2024’s lows but depend on VC’s bigger brother PE accepting some valuation corrections. The U.S. will bring the recovery as Europe and Asia struggle to bring a quantum of globally competitive companies.
#07 | 🪐 | Space takes off - Space is entering its golden age. SpaceX’s Starship is slashing launch costs and the US pro-growth / light-touch regulation stance will fuel investment in space startups, particularly in dual-use technologies.
#08 | 🌍 | Middle East is the next DeepTech hub - regulatory clarity, government support, and infrastructure investment will bring talent and companies to the region. Cross-border collaborations with the U.S. will further cement the Middle East’s role as the next leader.
#09 | 🐒 | Crypto’s comeback – although a personal crypto bear, crypto funds were among the fastest to raise in 2024 and are primed for deployment in 2025. Institutional interest will grow, with banks exploring digital wallets and stablecoins. Watch for advancements in blockchain infrastructure.
#10 | 🔒 | A cyber siege - 2024 saw record-breaking ransomware attacks. Startups focused on proactive threat detection, response systems, and data security will attract significant VC interest. Expect big spending from both governments and enterprises under pressure to reinforce digital defences.