Is a "Trumpcession" on the Horizon?
Week of March 17th, 2025
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STARTUPS
ROUNDS AND UNICORNS
The Week’s Biggest Funding Rounds: Flock Raises Big As Investors Swarm To Public Safety (Crunchbase, 5 minute read)
Flock Safety (Safety): Atlanta-based Flock Safety raised $275 million in a round led by Andreessen Horowitz, valuing the startup at $7.5 billion. The company offers an integrated safety platform with license plate readers, gunshot detection, AI-powered cameras, and drone-first responder tech
Celestial AI (Semiconductor): Optical interconnectivity startup Celestial AI secured a $250 million Series C1 led by Fidelity Management & Research, bringing its valuation to $2.5 billion. The company’s photonic fabric platform accelerates AI processing and enhances energy efficiency
Lila Sciences (Life Sciences): Cambridge-based Lila Sciences raised a massive $200 million seed round from Flagship Pioneering and others. The startup is developing a scientific superintelligence platform with autonomous labs for life, chemical, and materials sciences
Cybereason ($120M, Cybersecurity): Boston-based cybersecurity firm Cybereason secured $120 million from SoftBank, SoftBank Vision Fund 2, and Liberty Strategic Capital. Once valued at $5 billion, the company has faced financial struggles but continues operations with new CEO Manish Narula
Dexterity ($95M, Robotics): Robotics startup Dexterity raised $95 million, bringing its valuation to $1.65 billion. The Redwood City-based company builds robots for logistics tasks like sorting and loading parcels
INDUSTRY
As SF Bay Area eats up 52% of all AI and ML VC dollars, foreign VCs warn of waste (Pitchbook, 3 minute read)
At the HumanX conference in Las Vegas, investors debated not just the future of AI but also where it should develop. While the Bay Area attracted more than half of all VC funding in AI and machine learning in 2024—$69.8 billion of the global $134.6 billion—some investors cautioned that more money doesn’t always mean better outcomes. Stephen Nundy of Lakestar pointed out that massive investments can also lead to waste
Esther Wong of 3C AGI Partners highlighted China’s approach, where government-backed startups must quickly prove profitability, contrasting it with Silicon Valley’s long, high-burn growth cycles
Stricter regulations in some regions can also help startups expand globally, as companies that adapt early to tough regulatory environments may find it easier to scale
Ultimately, investors stressed the need for AI innovation beyond Silicon Valley, warning that over-concentration in one region could lead to stagnation rather than progress
DeepSeek AI cranks open the spigots on Chinese venture capital (CNBC, 4 minute read)
DeepSeek’s AI breakthrough has reignited interest in China’s VC market after three years of decline. China’s AI sector is seeing a resurgence similar to the U.S., with regulatory clarity encouraging investment. Venture funding for Chinese companies hit a record low in 2024 at $137.7 billion, but sentiment is improving. The Chinese government is also supporting the AI sector, with President Xi Jinping’s recent meeting with business leaders and a new 1 trillion yuan ($137.7 billion) central government tech investment fund in the works
Alibaba Cloud and a Hangzhou city-backed fund invested $137.68 million in robotics firm LimX Dynamics
However, U.S.-China tensions, especially in tech and tariffs, remain a challenge for foreign investors looking at China’s AI market
Funding To US Chip Startups Spikes As Global Dollars Fall Amid Trade Uncertainty (Crunchbase, 3 minute read)
Global venture investment in semiconductor startups declined in 2024, with total funding dropping 24% to $10.5 billion from $13.8 billion in 2023, while deal volume fell 27%. However, U.S.-based chip startups bucked this trend, securing nearly $3 billion, a 123% increase from the previous year, marking their best performance since 2021’s $3.2 billion record
The semiconductor industry remains a key geopolitical battleground, with the U.S. focusing on domestic production while China counters with a $140 billion tech fund
AI remains the primary driver of chip investments, as startups work to enhance computing efficiency for advanced AI models
However, challenges persist, as semiconductor manufacturing is capital-intensive and dominated by industry giants like Nvidia, making it difficult for newcomers to break through
ECONOMIC SNAPSHOT
U.S. and global economic outlooks cut by OECD as Trump’s trade tariffs weigh on growth (CNBC, 5 minute read)
The OECD has lowered its global and U.S. economic growth forecasts due to President Trump’s proposed tariffs, which are increasing trade uncertainty and inflation. Global GDP growth is now projected to slow from 3.2% in 2024 to 3.1% in 2025 and 3.0% in 2026, while U.S. growth is expected to decline to 2.2% in 2025 and 1.6% in 2026
Canada and Mexico, hit by U.S. tariffs, have seen their forecasts cut sharply, with Canada now expected to grow just 0.7% and Mexico's economy projected to shrink by 1.3%
The OECD also revised inflation estimates upward, expecting U.S. inflation at 2.8% in 2025, up from a previous 2.1% forecast, and G20 inflation rising to 3.8%
The organization warned that ongoing trade tensions could weaken global growth, raise consumer prices, and reduce investment
Effects of Tariffs on U.S. Economy Pile Up (Statista, 4 minute read)
A report from The Tax Foundation estimates that the Trump administration’s current and announced tariffs could reduce U.S. GDP by up to 0.65% and cause a loss of nearly 600,000 full-time jobs. The tariffs include measures on China, steel and aluminum imports, as well as new tariffs on the EU and motor vehicles
In comparison, the 2018-2019 trade war tariffs lowered U.S. GDP by 0.25% and cost around 170,000 jobs
These tariffs are also expected to decrease after-tax incomes by 1.7-2.2% and raise costs for consumers, with U.S. households already facing an additional tax of $300-$600 in 2023
However, the government is projected to gain between $229-263 billion in tariff revenue by 2025, although this is a small portion of the overall budget
Risk of ‘Trumpcession’ rising, economists say, as global markets fall (The Guardian, 5 minute read)
The risk of a U.S. recession is rising, with economists citing President Trump's chaotic tariff policies as a significant factor. Stock markets have been hit hard, with the Dow Jones and S&P 500 falling sharply, as investors worry about the economic impact of Trump's unpredictable trade war. Trump's handling of tariffs, including the recent pause on tariffs for Canada and Mexico, has rattled global markets and increased uncertainty
Goldman Sachs has raised the chances of a U.S. recession from 15% to 20%, while Morgan Stanley revised its 2025 GDP growth forecast downward
Recent data showing a drop in consumer spending, a record trade deficit, and a significant decline in consumer confidence has fueled fears of a slowdown
Some economists believe that while the U.S. may avoid a technical recession, the risks are increasing
US annual inflation rate in February remains relatively stable at 2.8% (The Guardian, 4 minute read)
Consumer prices remained stable in February, with annualized inflation at 2.8%, down from 3% in January, according to the Bureau of Labor Statistics. Core inflation, excluding food and energy, rose by 0.2% month-over-month. While inflation has significantly dropped from its 2022 peak of over 9%, it remains above the Federal Reserve’s 2% target. The Fed, which lowered interest rates three times last year, is expected to keep them unchanged at its upcoming March meeting
However, economic stability has been disrupted by President Trump’s aggressive trade policies, including a 20% tariff on Chinese imports and 50% tariffs on Canadian steel and aluminum, with potential further tariffs on Mexico and Canada
These measures have unsettled stock markets, which have declined sharply, raising concerns about a possible recession
Fed Chair Jerome Powell has emphasized caution, stating that the economy does not require immediate intervention but acknowledging uncertainty in the economic outlook
IMPACT & CLIMATE RESILIENCE
US companies drop DEI from annual reports as Trump targets corporate values (Financial Times, 7 minute read)
Hundreds of U.S. companies have significantly reduced references to "diversity, equity, and inclusion" (DEI) in their annual reports following President Trump's administration's stance against such programs. According to FactSet data, more than 200 of America's largest corporate groups have cut mentions of DEI, with 90% of the top 400 S&P 500 companies that have filed annual reports since Trump's election removing at least some references to DEI
Many companies, including Mastercard, Salesforce, and Palantir, have eliminated the term entirely in their latest filings
Trump's executive orders, signed in January 2017, prohibited DEI "discrimination" in federal agencies and required government contractors to certify they don’t operate inclusion programs that violate federal anti-discrimination laws
While some companies have removed references to DEI, others have shifted focus to terms like "inclusion" or "belonging."
IPO & EXITS
VC-backed IPO hopefuls: All eyes on market volatility (Pitchbook, 2 minute read)
Last week’s market volatility, with the VIX spiking to 29.8 and rising 62.6% in a month, would have been disastrous for IPO hopefuls. Uncertainty from Washington, shifting tariff policies, and geopolitical instability have led to a market correction in the S&P 500 (down 10.2%), while the Nasdaq dropped 11.4%, and the Dow has fallen nearly 9% over the last month. VCs were counting on a surge in IPOs to unlock liquidity, but turbulent conditions may force companies to delay or accept lower valuations
In 2024, the top quartile of IPOs had a median debut of $618.2 million, while the bottom quartile trailed at $112 million
However, some analysts argue that volatility could benefit major unicorns like Databricks and StubHub by reducing competition
Despite concerns, companies deep into the IPO process are expected to proceed, as the long-term outlook remains unclear
Tech M&A bankers are dragging through their slowest winter in a decade (Pitchbook, 2 minute read)
M&A activity in the U.S. has had a sluggish start under the Trump administration, with January seeing the lowest deal volumes in a decade and February showing little improvement. Antitrust scrutiny, price mismatches, and market volatility have hampered strategic acquisitions, while new FTC and DOJ leadership signals a tougher stance on Big Tech consolidation. The DOJ’s antitrust office is now led by Gail Slater, a known critic of tech power, and FTC Chair Andrew Ferguson has also voiced concerns over industry dominance
With major tech companies pulling back from M&A—Microsoft hasn’t made a traditional acquisition in 18 months—startups are increasingly selling to other VC-backed firms instead
M&A is now a secondary priority for Big Tech, which is focusing on AI infrastructure investment
Meanwhile, a market sell-off has dampened dealmaking further, with the Nasdaq dropping over 2,000 points since the inauguration
While secondaries have surged, totaling about $15 billion, they are not sufficient to satisfy LPs looking for exits
Startups were buyers in more than one-third of US startup acquisitions in 2024 (Pitchbook, 3 minute read)
As public tech companies scale back on startup acquisitions, venture-backed startups are stepping in to fill the gap. In 2024, over one-third of U.S. startup acquisitions involved another VC-backed company as the buyer, up from 20.3% in 2018. This trend is driven by late-stage startups staying private longer and having more cash to fund deals
An estimated 956 venture-backed startups were acquired last year, marking the fourth-highest level on record
Meanwhile, top tech firms have significantly reduced startup acquisitions due to market conditions and regulatory scrutiny, with only 17 such deals in 2024 totaling $3.3 billion down 43 deals worth $19.2 billion in 2020
Venture-backed companies, under pressure to sustain growth, are turning to acquisitions as a strategic move, a trend expected to continue unless they go public or get acquired themselves
Klarna files to go public on NYSE (Pitchbook, 3 minute read)
Klarna, the Swedish buy now, pay later giant, has filed to go public on the New York Stock Exchange after two decades in business. The IPO will be closely watched as VC-backed companies attempt to revive public listings in 2025. Klarna has rebounded from an 85% valuation drop in 2022, reporting $2.81 billion in revenue in 2024 and turning a $21 million net profit after a $244 million loss in 2023
The company serves 93 million active consumers and 675,000 merchants across 26 countries
Klarna’s latest private valuation was $12 billion in early 2025, down from its $45.6 billion peak in 2021, when rising interest rates severely impacted lending startups
With 65 venture-backed exits in Q4 totaling $7.4 billion, analysts are monitoring other fintech firms like Chime and Plaid for potential IPOs
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.
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 our revolution.
Happy reading,
AI8 Ventures’ Research & Investment Team
