The innovation economy experienced steady investment in H2 2025 alongside persistent market challenges. While overall venture capital funding increased—driven largely by AI—the total number of deals declined. The J.P. Morgan Innovation Economy Update examines these trends and the factors influencing today’s venture landscape.
Key highlights from the report include:
- AI-driven capital flows: Investment in AI-focused companies surged, with top firms—especially in San Francisco—attracting outsized funding and commanding valuation premiums.
- Valuation dynamics: Both early- and late-stage AI startups saw significant increases in valuations, while overall capital became concentrated in fewer, larger transactions.
- Fundraising environment: Fundraising timelines extended, exit activity rebounded and founder-friendly deal terms continued amid elevated valuations.
- Global perspective: The U.S. led global venture investment, while China’s share contracted and the U.K. advanced in sectors like SaaS and fintech.
- Liquidity and exits: Unicorn creation rebounded, but many companies delayed IPOs, waiting for improved market conditions and greater stability.
Download the full report for a comprehensive analysis of the trends and opportunities shaping the innovation economy. Connect with a J.P. Morgan Startup Banking specialist to discuss how these developments may affect your company’s strategy.
Contributors
John China
Co-Head of Innovation Economy, J.P. Morgan Commercial Banking
Andrew Kresse
Co-Head of Innovation Economy, J.P. Morgan Commercial Banking
JPMorgan Chase Bank, N.A. Member FDIC. Visit jpmorgan.com/commercial-banking/legal-disclaimer for disclosures and disclaimers related to this content.