5 Trends In Tech And Startups We’re Watching In 2025, From An M&A Rebound To A Defense Tech Boom
Will the M&A market, and with it the IPO pipeline, pick up next year?
What about the tech job market? Tens of thousands of workers are out of work in the United States alone 2024?
Every year, we make some predictions about the startup world for the coming year. Sometimes we’re right – like last year, when we predict correctly IPOs won’t make a comeback in 2024.
So, take it with a grain of salt, here are the five key trends we’re keeping an eye on in the new year.
M&A rebound?
There is optimism that an administrative change in the federal government will kick-start a slow-moving M&A environment that many view as overly regulated.
M&A deals involving venture capital-backed startups have Slowing down over the past few years — Author: Crunchbase data – This significantly affects the ability of venture capitalists to provide returns to limited partners and therefore raise new capital.
Many venture capital firms hope to change the status quo Federal Trade Commission and U.S. Department of Justice M&A activity to kick off after years of overzealous regulatory environment Cancel transaction For example AmazonPlanned acquisition for US$1.4 billion love robots.
While the big reviews-related deals make the headlines, other smaller, secret deals fail to materialize because they become more expensive and are deemed not worth the money and trouble.
However, while regulatory changes are inevitable, there are still concerns about the economy and how friendly the new administration will be to tech and M&A.
President-elect raises tariffs Donald Trump Already promised – could cause inflation to spike again, pushing interest rates higher. Additionally, while Trump has talked about reducing regulation, he has also criticized the power wielded by big tech companies. He nominated Gail Slater, a frequent critic of big tech companies, to lead the project Ministry of JusticeAntitrust action may have given Silicon Valley some pause.
Still, many are hopeful that the M&A market will pick up — and with it the IPO pipeline — and that the liquidity of past investments will flow freely.
Is 2025 the year of IPO comeback?
back 2024 is another slow year For new technology listings, the IPO market is expected to pick up in 2025. The outlook is not optimistic. What has changed?
“I think the market is very confident. Stocks are trading at all-time highs. Ran Benzur legal consulting firm Fenwick & West LLP. And “there’s a shift toward growth, which is obviously a good thing for the tech industry.”
Currently, two well-known companies have applied: Headquartered in Sweden Klarnaa buy now, pay later provider, has offered Securities and Exchange Commissionand brain systems inc.an AI chip company that filed in September.
“We should see companies begin testing public markets across industries in 2025 – fintech, internet, artificial intelligence, SaaS, etc.,” he said. Nina Achajianpartner Index Venturesvia email.
“We’re going to start seeing momentum at the beginning of the year and really accelerate as the year goes on,” Ben-Tzur predicted. He saw early momentum in 2024 but then tapered off.
Artificial Intelligence and Blockchain May Equal Big Money
Artificial intelligence funds continue to maintain rapid growth momentum. The total global venture capital investment last month was US$28 billion, more than half of which Go to companies in the field of artificial intelligence, which are raising funds in everything from robotics to marketing to health care.
Generative AI companies that build models, e.g. xAI and Anthropic selectionIncrease lots of rounds It seems haphazard, and many apps and proxy AI seem to have little problem raising still large sums of money.
Just last month, San Francisco-based writeris the creator of rapid-fire AI applications and agents for healthcare, retail, and financial services workflows, locked down US$200 million Series C financing The company values its enterprise-focused generative artificial intelligence platform at $1.9 billion.
However, some are looking at the intersection of tech’s new big thing – artificial intelligence – and its last big thing – Web3.
More specifically, what role can blockchain play in developing an AI economy, especially with so many new startups creating AI agents? Some investors see huge potential between the two, especially as cryptocurrency prices explode and blockchain and Web3 return to people’s consciousness.
Artificial intelligence agents have the potential to work faster on blockchains because security is already built-in — rather than an afterthought like on our current Web 2.0 platforms. This efficiency can make artificial intelligence more dynamic, while being more user-friendly and less expensive for businesses.
The intersection of blockchain and artificial intelligence is still in its early stages, but it’s definitely one to watch.
The white-collar recession will continue
During the height of the 2021 unicorn boom, deep-pocketed startups went on a recruiting spree. This allows skilled workers to enjoy high-paying jobs and a degree of career mobility in areas ranging from programming to marketing to project management.
Of course, this didn’t last long. Starting in 2022, things started to get worse, with dozens of once-ambitious businesses laying off employees, while more and more people who were still working chose to stay put. It’s hard to tell where we are in the cycle right now, but according to media reports Reportit seems harder than usual to find a well-paying job at an established tech company or a funded startup.
By 2025, we predict that the job market will remain challenging in many once-hot tech recruiting areas. Established startups and public companies, in particular, will be wary of ballooning costs and avoid the kind of moonshots many once pursued.
One might say that generative AI, where funding and recruitment remains high, is an exception. The counterargument, however, is that the technologies developed by these companies are best suited to displacing manpower in other white-collar industries. So what’s good for them, might be bad for the careers of the rest of us.
Space and defense technology will boom
The days of Silicon Valley being squeamish about developing military technology are apparently over.
As of mid-November, defense technology startups (defined as startups in the military, national security and law enforcement sectors) Has raised nearly $3 billion through 85 rounds of financingprovided by Crunchbase data. This set a new record for venture capital investment in the industry, surpassing the $2.6 billion raised by such startups in all of 2022.
The tech industry’s new enthusiasm for defense technology is influenced by a variety of factors. As conflict spreads from Ukraine to the Middle East, governments are scrambling to incorporate state-of-the-art artificial intelligence technology into their weapons and defense systems. Tensions between China and the United States are likely to continue to rise under the incoming Trump administration, especially regarding China’s ambitions for Taiwan.
There is also significant overlap between defense technology, aerospace and industrial technology, areas that are likely to receive significant support from the White House and allies, such as Space Exploration Technologies Corporation CEO Musk.
this PentagonThe 2025 budget request is $850 billion, with significant allocations for unmanned systems and artificial intelligence. Spurred by the conflict between Ukraine and Russia, Europe also spends billions Defense technology research, including new artificial intelligence-driven smart weapons, more advanced drones and better radar technology.
Through 2025, we predict that venture capital investment in defense technology will continue to grow, driven by government spending and the warm relationship between Silicon Valley and Washington
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Illustration: Dom Guzman
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2024-12-19 12:00:49