Q3 2025 State of Private Markets

Authors:

Ashley Neville, Kevin Dowd

Read time:

4 minutes

Published date:

November 21, 2025

The industry continued to grow, marked by key trends: Early-stage valuations keep rising, down rounds are growing less frequent, and the Bay Area still reigns supreme. See all the best data in our latest report.

Contents

• Q3 2025 State of Private Markets
• Q3 highlights
• Key trends
• Full report available: Start reading now for free

The slow but steady growth of the U.S. venture capital industry continued in the third quarter of 2025. Startups on Carta combined to raise $27.3 billion in new funding in Q3, the highest quarterly sum in the past three years.

Compared to the same period one year ago, total cash raised is up 5% in Q3. Compared to two years ago, it’s up 48%.

Venture fundraising numbers experienced a sharp decline during the significant shakeup that occurred in 2022 and early 2023, as investors and startups alike grappled with new market realities brought on by a widespread reset in tech valuations. Since then, the market has proven its resilience, with the total cash raised inching higher and higher with each new quarter.

Even as most of the market is raising at more measured levels, a notable number of very large rounds—which, in many cases, are being raised by startups on the cutting edge of AI—continue to drive much of the growth in dollars invested. These mega-checks, sometimes reaching hundreds of millions or even billions, are meaningfully influencing quarterly fundraising totals and valuation benchmarks.

The $27.3 billion in total cash raised during Q3 was distributed fairly evenly across the fundraising spectrum. About 25% of all funding raised in the quarter went to Series A investments, while Series C rounds were responsible for another 20% of cash raised. Nearly 40% of all new venture rounds in Q3 were seed investments—but those seed rounds accounted for just 9.4% of cash raised.

In terms of sectors, the SaaS space remains dominant. Software startups on Carta brought in $8.98 billion in new funding in Q3, nearly twice as much as any other sector. Hardware ranked second, at $4.52 billion. In Q3, those two sectors alone combined to account for nearly half of all venture funding raised.

Q3 highlights

• Early-stage valuations keep rising: The median pre-money valuation on new primary seed rounds on Carta rose to a new high of $16 million in Q3, an increase of 14% from the same period last year. The median pre-money valuation at Series A also climbed to its highest point ever in Q3, landing at $49.3 million.

• Down rounds are growing less frequent: About 17% of all new venture rounds in Q3 were down rounds, the lowest quarterly rate of down rounds in nearly three years. From Q2 2023 through Q1 2025, the down-round rate was higher than 20% in seven out of eight quarters.

• The Bay Area still reigns supreme: Startups on Carta that are based in the San Francisco metropolitan area combined to bring in $8.1 billion in new venture funding in Q3, up more than 100% from the same period two years ago. Thanks in no small part to the city’s central role in the AI industry, San Francisco was home to more venture fundraising in Q3 than the New York, Boston, and Los Angeles metros combined.

Key trends

Through the first three quarters of the year, startups on Carta combined to raise $79.8 billion in new funding. That’s about 80% of the total venture funding raised during 2024, meaning this year’s market is on pace to surpass last year’s fundraising total. Startups have already raised more new capital in the first nine months of 2025 than they did during the full year of 2023.

That $79.8 billion in funding through Q3 2025 was spread across 3,620 venture rounds, lagging slightly behind the dealmaking pace of the previous two years. This combination of more capital raised across fewer rounds means the average venture funding in 2025 has been slightly larger than in 2024.

For the past two years, quarterly totals for cash raised by startups on Carta have been steadily trending up. Companies combined to bring in $27.3 billion in Q3, a 5% increase year over year and a 48% increase compared to the same period two years ago.

The number of new rounds, however, continues to fall, with just 1,131 new funding events in Q3. That number may continue to rise as more funding events are logged on the Carta platform, but for now, Q3 was the second-slowest quarter for dealmaking in the past six years. The only quarter that saw fewer transactions was Q1 2025, with 1,119 new rounds taking place.

In Q3, VCs invested more capital in Series A deals (24.9%) than at any other stage, with Series C (20%) and Series B (18.9%) trailing closely behind. In total, about 63.8% of all venture capital invested last quarter went to transactions at one of these three stages.

In terms of deal count, nearly 40% of all new funding events on Carta were seed rounds. But those rounds accounted for just 9.4% of all cash raised in the quarter, reflecting the fact that seed rounds tend to be significantly smaller than later-stage financings. On the other end of the spectrum, just 2% of all new rounds in Q3 were at Series E and beyond. Yet these rounds were responsible for 13.4% of all cash raised.

Full report available: Start reading now for free

Our complete State of Private Markets Q3 2025 report includes 20 additional charts and analysis on fundraising and valuation at all stages, deal terms, dilution, geographical trends, and more.