Top Venture Capital Trends To Watch in 2025

The venture capital landscape has changed dramatically over the past few years, with VC investment slowing due to significant economic uncertainty that started with the COVID-19 pandemic’s onset in 2020.

The pandemic reshaped global economic conditions and had a lasting effect on venture capital. Persistent inflation dented consumer spending and drove the Federal Reserve to raise interest rates 11 times between March 2022 and July 2023. Fears of recession peaked, and initial public offerings (IPOs) stalled in those years, creating the worst IPO market since the 2008 financial crisis, according to EY. These years of ongoing uncertainty caused some VCs to tighten their wallets.

But signs of optimism began to emerge in the second half of 2024, which—coupled with fervent excitement about innovation in artificial intelligence (AI)—gave rise to new trends in venture capital investing. These trends look set to continue into 2025, says Michael Duda, cofounder and managing partner of Bullish, a venture capital firm that has invested in companies like Warby Parker, Peloton, and Harry’s. Here are five venture capital market trends for ecommerce companies to watch in 2025.

Venture capital trends to watch in 2025

1. More money, fewer deals
2. Emergence of new VC managers and additional funding sources
3. AI’s rise (and potential peak)
4. Increased focus on capital efficiency
5. Growth of the creator economy and social selling

1. More money, fewer deals

After a period of tighter purse strings in the venture capital industry, Michael says he noticed a shift in the fall of 2024 toward more bullish sentiments. “People are optimistic we’ll see more IPO activity and acquisitions, and it’s exit activity that gets venture capitalists wanting to jump in.”

The total amount of global venture capital investment rose to $368.5 billion in 2024, up 5.4% from 2023, according to Pitchbook-NVCA. But the number of deals declined by 17% in the same period, showing that fewer companies benefited from that increased venture capital activity.

“It’s the haves and have-nots,” Michael says. “The concentration of VC money is changing overall, with a lot in the larger venture funds: The five or so biggest funds have raised an oversized amount of capital, and then some smaller funds are fizzling out.”

This could have an effect in the future, as larger funds sometimes tend to wait longer and invest in late-stage startups—willing to take a smaller return in exchange for the proven track record of established companies. Still, Michael notes, that doesn’t mean early-stage companies are out of luck. More money is flowing into the market, and that ultimately creates more opportunities for all kinds of entrepreneurs.

2. Emergence of new VC funds and private funding sources

Meanwhile, a new generation of VC funds is emerging—with investors leaving big firms to spin up their own funds. Michael says this trend began around 2020 and has been heating up lately. “There will be a lot of new funds out there looking to make their mark. That can be a good opportunity for smaller companies.”

Startups may also find new opportunities outside of institutional investors and VCs, as interest and investment from private wealth is on the rise. Varied options provide more potential funding sources for entrepreneurs, which Michael says is “very encouraging.”

“We’re seeing an incredible amount of wealthy clients from banks and family offices looking to invest in really early stage companies. It’s not a totally novel concept, but it feels more popular now. People are willing to write that $75,000 check, and then you almost have to recruit the VC—where in the past it was that you get the VC first and then they tap their networks.”

3. AI’s rise (and potential peak)

Artificial intelligence remains a major contributor to recent VC fundraising. In Q4 2024, AI-driven deals increased fivefold over the year—and represented more than 60% of all VC fundraising in that quarter, according to EY.

“We might be looking at peak AI investment at this point,” Michael says. “It’s gargantuan amounts of money, to the point that some people are worried about dot-com vibes. But AI is a huge focus right now, and it will continue to be for the foreseeable future. I’ve never seen something move this quickly in my entire career.”

Ecommerce businesses don’t need to be generative AI startups to secure investments, but entrepreneurs should know how to leverage automation and machine learning to optimize operations.

“You need to be prepared to discuss how AI helps to contribute to your success,” Michael says. “If you’re starting a dog-walking service I don’t expect to hear ‘AI’ every other word, but in that case, it’s, ‘Here’s how we’re using AI to help coordinate walkers and set calendars.’ You don’t need to be an AI company, but you can’t ignore AI either.”

4. Increased focus on capital efficiency

VCs tend to focus on different metrics at different times. In the 2010s, for example, many sought companies with the potential for rapid growth and scalability. In 2022 and 2023, it was profitability, Michael says. In 2025, many investors are looking for capital efficiency, a measure of how well your company generates revenue relative to how much you spend to achieve that growth, he explains.

“Show me that you know how to put the money to work,” he says. “Are you doing it in a thoughtful, strategic way when things are going well? And can you maneuver and adjust when things don’t go to plan?”

Michael says there are a few factors behind this shift. In the long term, a focus on capital efficiency is “one of the continued antidotes” to a period in 2021 and 2022 when too much money went toward fast-growing VC-backed companies that had high valuations yet lacked scalable business models.

Politics is another major factor startups have to navigate. Uncertainty about changes in trade policy—such as tariffs—and their impacts on supply chains creates unexpected challenges that highlight the importance of capital efficiency. “That wasn’t on anyone’s bingo board when they raised capital, right?” Michael says. “But it happened, and unexpected things will always happen. Successful companies need to be able to survive that time and time again.”

5. Growth of the creator economy and social selling

With Gen Z poised to become a primary audience for some new startups, venture investors want to see that entrepreneurs know how to sell to this generation. These younger shoppers grew up online, and they seek social proof—especially in the form of recommendations from sources like content creators, who have built their trust over time. In fact, 54% of 18- to 29-year-old social media users say influencers impact their purchasing decisions a lot or a little, according to Pew Research.

Entrepreneurs need to show VC investors that they know how to capture these valuable young consumers. You can tap into the rise of social selling by partnering with relevant content creators and influencers in your space on campaigns that feel authentic for everyone involved: The magic happens when a creator uses their unique personality, connection with their audience, and storytelling power to build trust and drive action.

For all the trends that may wax and wane, the ability to find and connect to your audience is an evergreen essential. VCs will always favor a clear marketing strategy that meets customers where they are, while remaining true to your brand—in 2025 and beyond.