Calendar says winter, VCs say spring

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Hello reader,

Is anyone else sick of the phrase “funding winter?”

I sure am, and I’m willing to bet that the founders and VCs among you are sick of it, too. Unfortunately, as the data continues to show that it’s tough for VCs and startups to get funding, it’s a phrase that continues to be relevant.

The good news we bring you today though, is that the signs of a thaw may be there. But for funding spring (can I trademark that?) to truly arrive, the ecosystem needs successful exits to keep the momentum going.

Today we look at:

• Cautious optimism among VCs
• TikTok’s appeal to the Supreme Court against a ban in the US
• Other newsy highlights such as funding for Indian SaaS firm HostBooks and SoftBank announcing plans to invest US$100 million in the US.

Premium summary

Spring on the way at last?

Image credit: Timmy Loen

At long last, there are signs that the VC funding winter is thawing.

VC activity was muted in early 2024, but things have started to pick up recently, and there are indications this could continue in 2025.

• Show, don’t tell: Data platform Preqin’s latest poll in November shows that investors are now more keen to allocate funds into VCs, in contrast to the past couple of years. However, what the market needs most is successful exits, which allow funds to be recycled into the ecosystem.
• Alternative approaches: Trade sales, where a corporation acquires a startup, are a possible exit avenue that has received more attention recently, albeit with few actual transactions. However, industry players say that while more VCs are open to this kind of exit than in the past, not all have the skills needed to prepare their portfolio companies for the process.
• Cautious optimism: With interest rates going down and IPO markets reopening, VCs are optimistic about there being greater fundraising activity in 2025. However, challenges remain around liquidity, trade sales, and post-IPO performances.

Read more: VCs eye exits in 2025 as funding winter begins to thaw

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