The True Cost of Tariffs
Week of March 3rd, 2025
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STARTUPS
ROUNDS AND UNICORNS
The Week’s Biggest Funding Rounds: NinjaOne Cuts To The Top (Crunchbase, 5 minute read)
NinjaOne (cybersecurity): Raised $500M in Series C extensions at a $5B valuation, more than doubling its value in a year. Funding led by Iconiq Growth and Google’s CapitalG
Eikon Therapeutics (biotech): Secured $351M in Series D from Lux Capital and Alexandria Venture Investments. The company uses super-resolution microscopy for drug discovery
Bitwise (crypto): the crypto asset manager raised $70M led by Electric Capital. The company manages over $12B in assets, offering index funds and ETFs
Raise (loyalty): raised $63M led by Haun Ventures. The company focuses on blockchain-backed gift cards through its Smart Cards program
Taktile (fintech): the company raised $54M in Series B led by Balderton Capital. Taktile provides AI-powered risk decisioning automation for fintechs
Why US startups had a decade-high level of flat and down rounds in 2024 (Pitchbook, 3 minute read)
Despite the ongoing market downturn, inflated startup valuations from 2021 continue to impact companies. In 2024, nearly 25% of U.S. venture rounds were flat or down—the highest in a decade—compared to 12% in 2022. While median startup valuations have risen, this growth is misleading, driven by lingering high valuations from the low-interest-rate era. Startups are taking longer between funding rounds, with minimal valuation increases. However, sectors like climate tech have seen sharp growth, with late-stage median valuations reaching $82.8 million in 2024
The lack of public listings continues to limit liquidity, though investors remain hopeful about lower interest rates improving IPO prospects
Despite three rate cuts in 2024, they "barely moved the needle" on venture exits
Still, the aggregate valuation of all U.S. startups now exceeds $4 trillion, more than double 2020’s $1.7 trillion
ECONOMIC SNAPSHOT
Trump says 25% tariffs on Mexican and Canadian imports will start Tuesday, with ‘no room’ for delay (AP, 3 minute read)
Former President Donald Trump confirmed that new tariffs of 25% on imports from Mexico and Canada would begin Tuesday, escalating trade tensions and raising fears of economic disruption. The move is part of his broader strategy to curb fentanyl trafficking, illegal immigration, and trade imbalances while encouraging U.S. manufacturing. Trump declared that a 25% tariff would apply to imports from Mexico and Canada. Canadian energy products like oil and electricity would be taxed at a lower 10% rate
Canada plans to impose 25% tariffs on $155 billion CAD worth of American goods, starting with $30 billion CAD in taxes immediately after midnight Tuesday
President Claudia Sheinbaum said Mexico would make its own decisions in response but did not immediately announce specific countermeasures
Economists predict an average U.S. family could face price increases exceeding $1,000 due to rising costs of groceries, gas, and cars
Trump plans to introduce “reciprocal” tariffs in April, matching other countries’ tax rates on U.S. goods
Exemptions from his 2018 steel and aluminum tariffs have been removed, and additional tariffs will be placed on autos, computer chips, copper, and pharmaceuticals
Markets sink as Trump confirms tariffs on Canada, Mexico and China (BBC, 4 minute read)
Former President Donald Trump’s announcement of 25% tariffs on imports from Canada and Mexico, along with an additional 10% tariff on Chinese goods, sent U.S. stock markets into a sharp decline. The Dow Jones Industrial Average fell 1.4%, the S&P 500 dropped 1.75%, and the Nasdaq plunged 2.6%, reflecting investor concerns over rising inflation, supply chain disruptions, and slower economic growth
Businesses with strong North American trade ties, including automakers and retailers, face mounting uncertainty as increased costs could cut into profits
Despite the market downturn, Trump dismissed economic concerns, insisting that the tariffs would push companies to relocate manufacturing to the U.S
However, financial experts caution that the policy could strain corporate earnings and weaken economic stability in the long run
Trump may put US into a recession, former adviser Anthony Scaramucci warns (Yahoo finance, 3 minute read)
Anthony Scaramucci, former White House Communications Director and founder of SkyBridge Capital, warns that tariffs function as a regressive tax, disproportionately impacting lower-income consumers. Despite economic risks, Trump is moving forward with 25% tariffs on Mexico and Canada, additional tariffs on China, and a 25% tax on imported steel. Warren Buffett likened tariffs to an "act of war," emphasizing that they ultimately burden consumers. Economic projections indicate potential harm:
The Tax Foundation estimates a 0.4% GDP decline, while EY forecasts contractions of 1.5% in 2025 and 2.1% in 2026, alongside a 0.7% inflation increase
Consumer confidence has dropped for three consecutive months, with concerns over tariffs reaching levels last seen in 2019
Apollo Global’s Torsten Sløk warns that a full-scale trade war could create a "stagflationary shock" to the U.S. economy
Jobless claims spike, in worrisome sign for the US labor market (CNN, 4 minute read)
First-time applications for unemployment benefits rose more than expected last week, with 242,000 claims filed, marking a 22,000 increase from the previous week. This represents the largest spike in claims in over four months, potentially signaling cracks in the U.S. labor market, though some of the increase may be due to temporary factors like a winter storm and a holiday week
The increase could also be tied to layoffs, particularly within the federal government, as the Trump administration’s workforce cuts take effect, although the full impact will become clearer in the coming weeks
Economists note that while these layoffs may not significantly impact the overall economy immediately, they could affect local economies and lead to decreased consumer spending
Despite these concerns, economists expect the February jobs report to show moderate employment growth, with around 160,000 jobs added
Tariff threats and uncertainty could weigh on consumers, drag down US economy, gov't report suggests (Yahoo Finance, 5 minute read)
Ongoing tariff threats and potential government job cuts are contributing to consumer caution, despite otherwise solid economic indicators. Data released Friday showed that Americans reduced their spending in January by 0.2%, the largest decline since February 2021, even as their incomes rose by 0.9%. This retreat in spending is partially attributed to unseasonably cold weather, but it also reflects growing uncertainty over rising tariffs and government layoffs
Inflation moderated, falling to 2.5% from 2.6% in December, but the threat of new tariffs could push prices higher
Some companies, like World Emblem, are already preparing to raise prices in response, potentially affecting job numbers and investment
The Fed’s efforts to control inflation by maintaining high interest rates have led to higher borrowing costs, but some economists worry that tariffs could undermine these efforts and slow economic growth
IMPACT & CLIMATE RESILIENCE
Former DEI Chief Urges Corporations to Uphold Diversity Initiatives (Business Insider, 4 minute read)
Dr. Alaysia Black Hackett, former chief diversity and equity officer for the Department of Labor, recently called on corporations to remain steadfast in their commitment to diversity, equity, and inclusion (DEI) despite growing political and social challenges. She emphasized that, in times of change, companies should not reduce their DEI efforts, as these initiatives play a crucial role in fostering a more productive and inclusive workplace
Hackett pointed out that DEI is a strategic advantage, contributing directly to improved employee satisfaction, innovation, and overall business performance
Hackett mentioned that over 70% of companies in the U.S. still report implementing DEI programs, but she warned that political pressure could cause many to scale back or abandon these efforts
Hackett’s advice comes in the wake of regulatory shifts under the Trump administration that have affected many companies' approach to DEI
IPO & EXITS
IPO Market Slump Drags On As Unicorns Multiply. Why There's Hope For More IPOs In 2025 (Investor’s Business Daily, 6 minute read)
The IPO market in 2025 is showing cautious optimism after a three-year slump, with tech investors hoping for a revival. While early-year activity has been slow, cloud computing startup CoreWeave is preparing a major IPO, aiming for a valuation of over $35 billion, signaling potential market appetite for AI-related stocks. Higher interest rates and economic uncertainties have restrained IPOs since 2022, with 51 U.S. and European tech IPOs that year, dropping to 25 in 2023 and 26 in 2024
However, expectations of rate cuts and a stronger stock market could boost new listings, companies like Klarna, Chime, and Databricks are considering IPOs
Nonetheless, many unicorns, including SpaceX ($350 billion valuation) and OpenAI ($157 billion valuation), have ample private funding and are delaying public offerings
If stock market conditions improve, IPO activity is expected to rise, with 155–195 U.S. listings projected for 2025, compared to 146 in 2024, which raised $29 billion, an increase from $19.4 billion in 2023, though still far from the $142.4 billion raised in 2021
AI8 VENTURES HIGHLIGHT
Trumponomics 2.0
Following President-elect Donald J. Trump’s victory over Kamala Harris, the financial world witnessed an immediate response. In just one week, the S&P 500’s value surged by $1.9 trillion, pushing stocks to record highs. The U.S. dollar strengthened globally and Bitcoin achieved unprecedented highs.
Wall Street is preparing for more government spending, lighter regulation, bigger deficits, and accelerating growth under a Trump administration and a Republican-led Congress.
Biden’s Economic Legacy
The Biden era was marked by headlines of massive layoffs and a cost of living crisis. The average worker faced double-digit increases in food, energy, housing, and other essential expenses that impacted middle-class families the most and consumed the bulk of household budgets. Despite record highs in the stock market, nearly half of Americans believed the nation was in a recession. Is this Biden’s fault? No. Global supply chain disruptions, stimulus checks, the aftermath of COVID-19 lockdowns, and the ripple effects of geopolitical tensions all contributed to soaring prices. Did Americans blame Biden? Election results suggest they did. Two-thirds of voters believed the economy was on the wrong track.
Hence, Trumponomics 2.0.
Trump’s campaign capitalized on promises of economic revival, pledging to deliver low taxes, low regulations, low energy costs, low interest rates, and low inflation -Trumponomics.
Don’t forget to take a look at Alpha Insights Special Edition: Trumponomics Report. Understand everything VC-related that happened in 2024 and how profit will shift under Trump 2.0
(Trumponomics 2.0 Special Edition starts on page 22)
Alpha Insights: 2024 Venture Capital Report
Alpha Impact 8 Ventures is thrilled to share our latest insights into the dynamic world of investments with our 2024 Venture Capital Report.
Last year, Michael Burry, the legendary fund manager who famously profited from shorting the US housing market in 2008, bet more than $1.6 billion on a Wall Street crash by shorting the S&P 500 and Nasdaq-100. Nothing happened.
This year, Warren Buffett’s cash reserves reached a record $276.9 billion as Berkshire Hathaway trimmed its stock holdings in Apple. Some view it as a routine adjustment, while others speculate that Buffett perceives an overheated, overvalued market.
Everyone talks about a soft landing, but warning signs are flashing and the world seems to be teetering on a delicate balance. Is there something we’re missing? Is there an unseen factor at play?
Alpha Impact 8 Ventures is disrupting the industry, generating wealth, creating technology, providing access, leveling the play field, reducing systemic barriers, and building a resilient world.
Become part of the our revolution.
Happy reading,
AI8 Ventures’ Research & Investment Team
