Big Startup Funding Now Focuses on Fewer, Larger Deals

Startup funding was once known for backing small, early-stage companies with big ideas. But today, the landscape is shifting. While smaller rounds still exist, the majority of startup funding now flows into a few companies already seen as major players.

The most extreme example came in early 2025, when a single $40 billion round for OpenAI accounted for nearly half of all U.S. startup funding for the quarter.

This trend isn’t new—it’s been growing steadily over the past few years. The largest 10 funding rounds now account for a rising percentage of all venture dollars, pointing to a clear concentration of capital.

AI Companies Dominate the Biggest Startup Funding Rounds

Artificial intelligence startups are leading the pack when it comes to raising huge rounds. Companies like OpenAI, xAI, and Anthropic have all secured multibillion-dollar investments in recent years.

Others, such as Databricks, Waymo, and Anduril, also raised large amounts, even though their focus isn’t solely on building language models. Their work still heavily involves AI technology, which continues to attract the most capital.

By contrast, health and life sciences startups are less represented among the biggest deals. In fact, none of the top 20 funding rounds over the past two years came from this sector—though there have been notable exceptions, such as a $1 billion investment in Xaira, a biotech firm focused on AI-driven drug discovery.

Non-AI Companies Still Attracting Large Investments

While AI remains dominant, several non-AI companies have also landed major startup funding this year. Saronic, which makes autonomous surface vessels, raised $600 million in a Series C round.

Remote IT management firm Nerdio and cybersecurity company NinjaOne each closed $500 million Series C rounds, showing that interest in large-scale funding extends beyond AI.

Why Startup Funding Is Shifting Toward Fewer, Bigger Bets

This growing focus on large rounds reflects a shift in investor strategy. Rather than placing lots of small bets on early-stage startups, many investors now prefer to fund more mature companies that have already gained traction.

Historically, early-stage investments have delivered the highest returns—like the early investments in Facebook and Google. But these success stories are rare. Many seed-stage startups never scale, and the risk of failure remains high.

For venture capital firms, especially those backed by limited partners, consistent returns are essential. Backing a startup that’s already proven its value (though not always profitability) feels safer, even if it means investing at a much higher valuation.

Valuations Are High, and Risks Remain

The downside? These mega-deals often come with sky-high valuations. OpenAI’s recent $300 billion post-money valuation, for example, surpasses that of major global companies like Toyota, Samsung, and McDonald’s.

There’s always the risk that these valuations won’t hold, but investors believe the payoff justifies the price. In the case of OpenAI, demand for its products shows no signs of slowing.

The New Face of Startup Funding

Startup funding is no longer just about finding the next big thing at the seed stage. Today, it’s just as much about backing known winners with massive checks. As mega-rounds continue to shape the landscape, early-stage startups may find it harder to stand out—but the potential rewards for those who do remain as high as ever.