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Q2 venture funding climbs on AI deals while PE stuck on sidelines

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Greetings, Term Sheeters. This is finance reporter Luisa Beltran, subbing for Allie.

It’s time to take the temperature of the venture and private equity sectors, and we’ve got some new numbers. 

VC investing in startups is on the upswing, with venture firms pouring $91 billion into companies during the second quarter, a roughly 11% increase year-over-year, according to business data and predictive intelligence firm Crunchbase. Second quarter’s $91 billion represents a 20% drop from the first quarter when startups raised $114 billion. However, Q1 was the strongest quarter for venture investment since Q2 2022. (First quarter also included OpenAI’s $40 billion financing, the largest private round ever.) 

Nearly half of Q2’s $91 billion came from one sector: AI, which kicked in $40 billion. (Meta’s $14.3 billion investment in Scale AI in June generated more than one-third of AI sector funding.) Healthcare and biotech came in second with $14.8 billion in funding, while financial services delivered $11.3 billion for third place.

“Global funding has increased year over year for the past three quarters, driven primarily by billion-dollar-plus rounds into AI research labs as well as data and infrastructure providers in the sector,” Crunchbase said in the report.

Nearly one-third of all capital in Q2 went to 16 companies—including Anduril Industries’ $2.5 billion round, and the separate $2 billion fund rounds for Thinking Machine Labs and Safe Superintelligence.

Startup M&A was also active. Q2 saw $50 billion in reported exit value, the second strongest quarter since 2021. The total was down from $71 billion in the first quarter, which included Google’s $32 billion buy of Wiz. OpenAI was the most active and largest acquirer of startups in Q2, scooping up four companies, including Jony Ive’s io for $6 billion and Windsurf for $3 billion.

PE on the sidelines

On the private equity side of things, fundraising among PE firms continues to drag. Global PE funds have collected $223 billion so far in 2025, on pace to fall short of last year’s performance, when PE pools accumulated $551 billion for all of 2024, according to research and data firm PitchBook. US funds have raised $149 billion so far in 2025, also below last year’s pace, when PE pools collected $333.4 billion.

The slowdown in PE fundraising is due to fewer mergers and a decline in IPOs. PE firms have struggled to sell their investments, which means they can’t send money back to their investors and this causes their own fundraising to stall. PE firms entered 2025 expecting a strong year, or at least a rebound, in mergers. But volatility due to President Trump’s Liberation Day tariffs caused many deals and IPOs to be put on hold in April. While new issues began rebounding in June, M&A remains sluggish.

U.S. private equity managers have more than $1 trillion in dry powder, or uninvested, committed capital, according to Kyle Walters, private equity research analyst at PitchBook. Many PE firms are “[sitting] on the sidelines, choosing not to sell most of their assets in what they deem to be an unfavorable exit market,” Walters said. (The PE dry powder total figure is as of Sept. 30, 2024, and has likely dropped since then, Walters said. Venture firms had $701.2 billion in uninvested capital, he said.)

So far in 2025, PE funds have clinched $339.8 billion in total exit value, which is on pace to surpass last year’s total of $384.2 billion. A handful of large deals, including natural gas exporter Venture Global’s $58.7 billion IPO and WorldPay’s $24.3 billion sale to Global Payments, have helped boost exit value this year.

“We need to see a strong pick-up in terms of exit count if we want to see the fundraising slowdown come to an end. And given that most exit activity is in a wait-and-see mode, you likely won’t see fundraising activity pick back up until 2026,” Walters said.

See you Wednesday,

Luisa Beltran
X:
@LuisaRBeltran
Email: luisa.beltran@fortune.com
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Venture Deals

Talon.One, a Berlin-based enterprise loyalty and promotion software company, raised $135 million in funding. Silversmith Capital Partners and Meritech Partners led the round and were joined by existing investor CRV

CarOnSale, a Berlin-based B2B marketplace for used car trading, raised €70 million ($82 million) in Series C funding. Northzone led the round and was joined by existing investors HV Capital, Insight Partners, Stripes, and Creandum

QEDMA, a Tel Aviv-based quantum computing company, raised $26 million in Series A funding. Glilot Capital Partners led the round and was joined by IBM, Korea Investment Partners, existing investor TPY Capital, and others. 

Bumo, a Pasadena, Calif.-based child care marketplace, raised $10 million in seed funding. Offline Ventures and True Ventures led the fund and were joined by Goodwater Capital, Marketplace Capital, and others. 

Fantasy Life, a New York City-based online sports and gaming company, raised $7 million in seed funding. LRMR Ventures and SC Holdings led the round and were joined by Eberg Capital, Bolt Ventures, Wasserman Ventures, and others. 

BridgePort, a New York City-based middleware software provider for crypto trading, raised $3.2 million in seed funding. Further Ventures led the round and was joined by Virtu, XBTO, Blockchain Founders Fund, Fun Fair Ventures, and Humla Ventures

Private Equity

Thoma Bravo agreed to acquire Olo, a New York City-based SaaS restaurant platform, in an all-cash deal valuing the company at approximately $2 billion. 

Tikehau Capital raised €1 billion ($1.17 billion) for its portfolio company Egis, a Paris-based architectural and civil engineering firm. 

Development Partners International, agreed to acquire a $190 million minority stake in Alameda Healthcare, an Cairo-based private healthcare group. 

TEAM Technologies, backed by Arlington Capital Partners, acquired Duke Empirical, a Morgan Hill, Calif.-based developer and manufacturer of cardiovascular medical devices. Financial terms were not disclosed. 

ORIX USA, a subsidiary of Japan-based ORIX Corporation, agreed to acquire a majority stake in Hilco Global, a Northbrook, Ill.-based diversified financial services company. Financial terms were not disclosed. 

Exits

The Chamberlain Group, backed by Blackstone, agreed to acquire Arrow Tru-Line, an Archbold, Ohio-based manufacturer and supplier of garage door hardware, from MiddleGround Capital. Financial terms were not disclosed. 

OTHER

– TPG Capital acquired a 70% stake in DIRECTV, an El Segundo, Calif-based satellite television company, from AT&T for $7.6 billion in cash.

Lightcast acquired Rhetorik, a Wokingham, UK-based B2B organizational intelligence and data provider. Financial terms were not disclosed. 

FUNDS + FUNDS OF FUNDS

Red Dot Capital Partners, a Tel Aviv-based venture capital firm, raised $320 million for its third fund focused on early-stage growth companies across various sectors. 

PEOPLE

Olympus Partners, a Stamford, Conn.-based private equity firm, promoted Matt Bujor to principal, Connor Wood to principal, Courtney Dunne to vice president, and Marty Durkin to vice president. 

Partech, a Paris-based venture capital firm, promoted Alison Imbert to partner, Moritz Steinbrecher to principal, and Ariadne Lemieux-Cumberlege to senior associate on the Seed team. The firm promoted Simone Riva to partner and Julia Najman to senior associate on the Venture team. 

Stonepeak, a New York City-based private equity firm, added Cindy Marrs as a senior advisor. Previously, she was at Wellington Management.



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Mark Zuckerberg says the ‘most important thing’ he built at Harvard was a prank website

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For Mark Zuckerberg, the most significant creation from his two years at Harvard University wasn’t the precursor to a global social network, but a prank website that nearly got him expelled.

The Meta CEO said in a 2017 commencement address at his alma mater that the controversial site, Facemash, was “the most important thing I built in my time here” for one simple reason: it led him to his wife, Priscilla Chan.

“Without Facemash I wouldn’t have met Priscilla, and she’s the most important person in my life,” Zuckerberg said during the speech.

In 2003, Zuckerberg, then a sophomore, created Facemash by hacking into Harvard’s online student directories and using the photos to create a site where users could rank students’ attractiveness. The site went viral, but it was quickly shut down by the university. Zuckerberg was called before Harvard’s Administrative Board, facing accusations of breaching security, violating copyrights, and infringing on individual privacy.

“Everyone thought I was going to get kicked out,” Zuckerberg recalled in his speech. “My parents came to help me pack. My friends threw me a going-away party.”

It was at this party, thrown by friends who believed his expulsion was imminent, where he met Chan, another Harvard undergraduate. “We met in line for the bathroom in the Pfoho Belltower, and in what must be one of the all time romantic lines, I said: ‘I’m going to get kicked out in three days, so we need to go on a date quickly,’” Zuckerberg said.

Chan, who described her now-husband to The New Yorker as “this nerdy guy who was just a little bit out there,” went on the date with him. Zuckerberg did not get expelled from Harvard after all, but he did famously drop out the following year to focus on building Facebook.

While the 2010 film The Social Network portrayed Facemash as a critical stepping stone to the creation of Facebook, Zuckerberg himself has downplayed its technical or conceptual importance.

“And, you know, that movie made it seem like Facemash was so important to creating Facebook. It wasn’t,” he said during his commencement speech. But he did confirm that the series of events it set in motion—the administrative hearing, the “going-away” party, the line for the bathroom—ultimately connected him with the mother of his three children.

Chan, for her part, went on to graduate from Harvard in 2007, taught science, and then attended medical school at the University of California, San Francisco, becoming a pediatrician.

She and Zuckerberg got married in 2012, and in 2015, they co-founded the Chan Zuckerberg Initiative, a philanthropic organization focused on leveraging technology to address major world challenges in health, education, and science. Chan serves as co-CEO of the initiative, which has pledged to give away 99% of the couple’s shares in Meta Platforms to fund its work.

You can watch the entirety of Zuckerberg’s Harvard commencement speech below:

For this story, Fortune journalists used generative AI as a research tool. An editor verified the accuracy of the information before publishing. 



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Senate Dems’ plan to fix Obamacare premiums adds nearly $300 billion to deficit, CRFB says

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The Committee for a Responsible Federal Budget (CRFB) is a nonpartisan watchdog that regularly estimates how much the U.S. Congress is adding to the $38 trillion national debt.

With enhanced Affordable Care Act (ACA) subsidies due to expire within days, some Senate Democrats are scrambling to protect millions of Americans from getting the unpleasant holiday gift of spiking health insurance premiums. The CRFB says there’s just one problem with the plan: It’s not funded.

“With the national debt as large as the economy and interest payments costing $1 trillion annually, it is absurd to suggest adding hundreds of billions more to the debt,” CRFB President Maya MacGuineas wrote in a statement on Friday afternoon.

The proposal, backed by members of the Senate Democratic caucus, would fully extend the enhanced ACA subsidies for three years, from 2026 through 2028, with no additional income limits on who can qualify. Those subsidies, originally boosted during the pandemic and later renewed, were designed to lower premiums and prevent coverage losses for middle‑ and lower‑income households purchasing insurance on the ACA exchanges.

CRFB estimated that even this three‑year extension alone would add roughly $300 billion to federal deficits over the next decade, largely because the federal government would continue to shoulder a larger share of premium costs while enrollment and subsidy amounts remain elevated. If Congress ultimately moves to make the enhanced subsidies permanent—as many advocates have urged—the total cost could swell to nearly $550 billion in additional borrowing over the next decade.

Reversing recent guardrails

MacGuineas called the Senate bill “far worse than even a debt-financed extension” as it would roll back several “program integrity” measures that were enacted as part of a 2025 reconciliation law and were intended to tighten oversight of ACA subsidies. On top of that, it would be funded by borrowing even more. “This is a bad idea made worse,” MacGuineas added.

The watchdog group’s central critique is that the new Senate plan does not attempt to offset its costs through spending cuts or new revenue and, in their view, goes beyond a simple extension by expanding the underlying subsidy structure.

The legislation would permanently repeal restrictions that eliminated subsidies for certain groups enrolling during special enrollment periods and would scrap rules requiring full repayment of excess advance subsidies and stricter verification of eligibility and tax reconciliation. The bill would also nullify portions of a 2025 federal regulation that loosened limits on the actuarial value of exchange plans and altered how subsidies are calculated, effectively reshaping how generous plans can be and how federal support is determined. CRFB warned these reversals would increase costs further while weakening safeguards designed to reduce misuse and error in the subsidy system.

MacGuineas said that any subsidy extension should be paired with broader reforms to curb health spending and reduce overall borrowing. In her view, lawmakers are missing a chance to redesign ACA support in a way that lowers premiums while also improving the long‑term budget outlook.

The debate over ACA subsidies recently contributed to a government funding standoff, and CRFB argued that the new Senate bill reflects a political compromise that prioritizes short‑term relief over long‑term fiscal responsibility.

“After a pointless government shutdown over this issue, it is beyond disappointing that this is the preferred solution to such an important issue,” MacGuineas wrote.

The off-year elections cast the government shutdown and cost-of-living arguments in a different light. Democrats made stunning gains and almost flipped a deep-red district in Tennessee as politicians from the far left and center coalesced around “affordability.”

Senate Minority Leader Chuck Schumer is reportedly smelling blood in the water and doubling down on the theme heading into the pivotal midterm elections of 2026. President Donald Trump is scheduled to visit Pennsylvania soon to discuss pocketbook anxieties. But he is repeating predecessor Joe Biden’s habit of dismissing inflation, despite widespread evidence to the contrary.

“We fixed inflation, and we fixed almost everything,” Trump said in a Tuesday cabinet meeting, in which he also dismissed affordability as a “hoax” pushed by Democrats.​

Lawmakers on both sides of the aisle now face a politically fraught choice: allow premiums to jump sharply—including in swing states like Pennsylvania where ACA enrollees face double‑digit increases—or pass an expensive subsidy extension that would, as CRFB calculates, explode the deficit without addressing underlying health care costs.



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Netflix–Warner Bros. deal sets up $72 billion antitrust test

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Netflix Inc. has won the heated takeover battle for Warner Bros. Discovery Inc. Now it must convince global antitrust regulators that the deal won’t give it an illegal advantage in the streaming market. 

The $72 billion tie-up joins the world’s dominant paid streaming service with one of Hollywood’s most iconic movie studios. It would reshape the market for online video content by combining the No. 1 streaming player with the No. 4 service HBO Max and its blockbuster hits such as Game Of ThronesFriends, and the DC Universe comics characters franchise.  

That could raise red flags for global antitrust regulators over concerns that Netflix would have too much control over the streaming market. The company faces a lengthy Justice Department review and a possible US lawsuit seeking to block the deal if it doesn’t adopt some remedies to get it cleared, analysts said.

“Netflix will have an uphill climb unless it agrees to divest HBO Max as well as additional behavioral commitments — particularly on licensing content,” said Bloomberg Intelligence analyst Jennifer Rie. “The streaming overlap is significant,” she added, saying the argument that “the market should be viewed more broadly is a tough one to win.”

By choosing Netflix, Warner Bros. has jilted another bidder, Paramount Skydance Corp., a move that risks touching off a political battle in Washington. Paramount is backed by the world’s second-richest man, Larry Ellison, and his son, David Ellison, and the company has touted their longstanding close ties to President Donald Trump. Their acquisition of Paramount, which closed in August, has won public praise from Trump. 

Comcast Corp. also made a bid for Warner Bros., looking to merge it with its NBCUniversal division.

The Justice Department’s antitrust division, which would review the transaction in the US, could argue that the deal is illegal on its face because the combined market share would put Netflix well over a 30% threshold.

The White House, the Justice Department and Comcast didn’t immediately respond to requests for comment. 

US lawmakers from both parties, including Republican Representative Darrell Issa and Democratic Senator Elizabeth Warren have already faulted the transaction — which would create a global streaming giant with 450 million users — as harmful to consumers.

“This deal looks like an anti-monopoly nightmare,” Warren said after the Netflix announcement. Utah Senator Mike Lee, a Republican, said in a social media post earlier this week that a Warner Bros.-Netflix tie-up would raise more serious competition questions “than any transaction I’ve seen in about a decade.”

European Union regulators are also likely to subject the Netflix proposal to an intensive review amid pressure from legislators. In the UK, the deal has already drawn scrutiny before the announcement, with House of Lords member Baroness Luciana Berger pressing the government on how the transaction would impact competition and consumer prices.

The combined company could raise prices and broadly impact “culture, film, cinemas and theater releases,”said Andreas Schwab, a leading member of the European Parliament on competition issues, after the announcement.

Paramount has sought to frame the Netflix deal as a non-starter. “The simple truth is that a deal with Netflix as the buyer likely will never close, due to antitrust and regulatory challenges in the United States and in most jurisdictions abroad,” Paramount’s antitrust lawyers wrote to their counterparts at Warner Bros. on Dec. 1.

Appealing directly to Trump could help Netflix avoid intense antitrust scrutiny, New Street Research’s Blair Levin wrote in a note on Friday. Levin said it’s possible that Trump could come to see the benefit of switching from a pro-Paramount position to a pro-Netflix position. “And if he does so, we believe the DOJ will follow suit,” Levin wrote.

Netflix co-Chief Executive Officer Ted Sarandos had dinner with Trump at the president’s Mar-a-Lago resort in Florida last December, a move other CEOs made after the election in order to win over the administration. In a call with investors Friday morning, Sarandos said that he’s “highly confident in the regulatory process,” contending the deal favors consumers, workers and innovation. 

“Our plans here are to work really closely with all the appropriate governments and regulators, but really confident that we’re going to get all the necessary approvals that we need,” he said.

Netflix will likely argue to regulators that other video services such as Google’s YouTube and ByteDance Ltd.’s TikTok should be included in any analysis of the market, which would dramatically shrink the company’s perceived dominance.

The US Federal Communications Commission, which regulates the transfer of broadcast-TV licenses, isn’t expected to play a role in the deal, as neither hold such licenses. Warner Bros. plans to spin off its cable TV division, which includes channels such as CNN, TBS and TNT, before the sale.

Even if antitrust reviews just focus on streaming, Netflix believes it will ultimately prevail, pointing to Amazon.com Inc.’s Prime and Walt Disney Co. as other major competitors, according to people familiar with the company’s thinking. 

Netflix is expected to argue that more than 75% of HBO Max subscribers already subscribe to Netflix, making them complementary offerings rather than competitors, said the people, who asked not to be named discussing confidential deliberations. The company is expected to make the case that reducing its content costs through owning Warner Bros., eliminating redundant back-end technology and bundling Netflix with Max will yield lower prices.



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