2025 promises to be as challenging as this year in terms of fundraising and navigating market volatility for both venture capital funds and startups. Predictions made by venture capital funds a year ago seem partially accurate: AI and deeptech continue to expand, while investors remain cautious with late-stage deals.
To understand if this year fully aligned with expectations and which trends will continue into the new year, Vestbee spoke with the leading regional VCs: Presto Tech Horizons, Roosh Ventures, Eleven, and Orbit Capital. They shared their perspectives on what venture capital and startup ecosystems should prepare for, how the US might influence their development, and which sectors are expected to continue rising.
Adam Hashchyshyn, Principal at Roosh Ventures
2024 was challenging for fundraising from LPs, but it proved to be a strong year for pre-seed and seed deals. Valuations were reasonable, and the investment process was more thoughtful, with founders being open to investor-friendly term sheets and taking the time to build relationships — a stark contrast to the rushed dynamics of recent years. It was also an opportunistic year for buying secondary shares of late-stage tech companies at steep discounts (10–50% off last round valuations), though this falls outside our core strategy and was more of a side value-add for LPs.
European VC, in general, was defined by a lack of liquidity and reduced later-stage activity, but two sectors stood out: AI and cleantech. AI continued its upward trajectory, accounting for a record 18% of venture funding driven by increasingly specialized applications in fintech, healthtech, and automation. Cleantech gained momentum thanks to Europe's favourable regulatory environment and sustainability goals, positioning it as a magnet for global talent and investment. These sectors showed good traction in 2024, and they will keep this pace in 2025, with cleantech particularly benefiting from the opportunity to attract US-based founders seeking a more supportive market environment.
Raising funds in 2025 will likely be as challenging, if not harder, than in 2024. Conversations with VCs — particularly those in their second, third, or fourth funds and planning to raise a new round next year — make the sentiment clear: securing capital will be difficult if you’re not a Tier 1 firm. With the stakes high, LPs gravitate toward safer investments like bonds rather than committing to higher-risk ventures.
At the same time, the difficulty in achieving exits through M&A and IPOs will continue to weigh on the market, placing significant pressure on VC firms and limiting active investments, especially in later-stage rounds like Series A and beyond. On the downside, we anticipated more deal and M&A activity and hoped the IPO market would rebound.
For startups, things will likely remain the same as in 2024, which is a positive outlook — not pessimistic. There is still a significant amount of dry powder available, and the market should stay relatively stable. For VC investors, this is a plus, as valuations are more reasonable now compared to the inflated levels seen in 2021/2022.
Valeri Petrov, Partner at Eleven
The venture capital landscape in 2024 has been characterized by a cautious recovery following a challenging period in 2023. The overall VC funding environment saw a decline in deal volume and valuations, primarily due to economic uncertainties, high inflation rates, and rising interest rates affecting investor sentiment. Access to later-stage capital remains scarce, with most funding events being bridge rounds. However, we saw some positive signals in the pre-seed stage in which we operate, most notably the normalisation of valuation and alignment between founder and investor expectations.
Generally, the European startup ecosystem shows remarkable maturity and resilience, particularly in CEE. While funding may be more selective than during the 2021 peak, the quality of opportunities and strength of the ecosystem have never been better. This has caused a notable rise in interest from US and Western European investors, evidenced by their growing participation in regional events and the establishment of small, localized teams (1-2 individuals) on the ground.
For 2025, we're optimistically realistic. The market has found its equilibrium with consistent quarterly funding levels; several positive indicators stand out. We anticipate:
- Continued emphasis on profitability and sustainable growth metrics
- More realistic valuations, particularly in late-stage rounds
- Increasing M&A activity and exit opportunities
- CEE's venture capital market still represents <1% of total EU fundraising, suggesting significant growth potential
We expect bridge rounds to decrease as the market stabilizes while maintaining robust early-stage activity. The growing presence of international growth investors in CEE should also help address the historical Series B/C funding gap.
Orbit Capital's Partners
As a scaleup investor, we saw 2024 as a year of good opportunities to invest in stronger, more healthy companies after the challenges of 2022/23. This happened a lot — scaleups applied cost-cutting measures, optimized development projects, and rationalized sales efforts. It was a good overall efficiency reset for the ecosystem. For our Growth Debt financing, it was a great year, too – scarce and expensive growth equity capital made founders look for efficient alternatives, and venture debt became a popular option.
In general, 2024 turned out to be a year of hype, volatility and big surprises. To name a few:
- Growth in AI is ultra-fast-paced, with big-pocket investors making huge bets, and Europe is falling behind. Companies applying AI to their niches still need to show more workflow value to their customers to be attractive to growth investors.
- The energy transition, so much needed and expected, has faced many obstacles (changing regulations, imports) and left many companies struggling with unexpected price changes and cash flow issues — EV sales are struggling, and battery companies are going insolvent.
- And the crypto comes back with increased force despite still proving its value beyond the speculative component.
Regarding other trends, geopolitical instability fuels growing interest in the defence and space sector. Here, there are many immediate opportunities, but the longer-term outlook is less clear – we want all the wars to stop, so the market should be smaller over time, but on the other side, you need a strong defence system to prevent new wars from happening. Dual-use, therefore, is critical, and it can move from defence to security, protection and civil use cases.
High volatility in cleantech and new energy space brought (hopefully temporary) investment winter into this space. As a result, interesting deals for consolidators are very likely as the demand for green energy remains in light of high energy costs.
In 2025, valuations of market-leading scaleups may experience upticks as fiscal and monetary uncertainties push more capital into robust and defensible equities. Additionally, US administration and geopolitical instability have the potential to generate unexpected accelerants and decelerants, causing volatility in public markets. Thus, holding strong growth equities can be a big win.
Check sizes are going up — also due to the fact that fund sizes are getting bigger. We will see a jump in growth debt financing, stand-alone or in the mix with equity rounds, mostly to drive AI tools penetration and strengthen balance sheets ahead of M&A prospects.
Billions of euros have been announced to flow into French and German tech ecosystems. We have yet to create financing means for startups and scaleups in CEE. There is a pressing necessity to open up our pension systems for alternative investments to increase their returns in the long term and fuel economic growth. Otherwise, we will keep falling behind Western Europe more and more, not to mention the US.
Vojta Rocek, Partner at Presto Tech Horizons
What nobody predicted, though, was how huge an impact VCs would have on the US election and Donald Trump’s decision-making – like naming David Sacks his ‘AI czar’, for instance. No one had that on their bingo cards, that’s for sure. These developments only reinforce our bet on everything related to deeptech and defence tech — Presto Tech Horizons thesis reflects this direction.
B2B SaaS is slowly dying and will continue declining for years. The future lies in the combination of hardware and software, deeptech and resilience tech, and startups that bring these elements together. AI is already eliminating jobs left and right, and this trend will only accelerate. We’re looking for people who don’t just adapt to this new reality – but who shape it and lead it.
Talking about trends, I expect a linear continuation of the ones we saw in 2024. Regulations continue to hold back European deeptech. If EU policies don’t change – which, unfortunately, seems to be the default – it will lead to stagnation of tech and innovation, making Europe increasingly less relevant. Some initiatives are emerging, but I remain skeptical for now. For the sake of European competitiveness and resilience, I truly hope I’m proven wrong.
And to anyone in the EU bureaucracy reading this: you are the main reason why this continent is currently headed for an economic death over the next 20 years. Recognize the problem and act fast to fix it, or step aside.
If the US jumpstarts their economy, it could have some positive effects on Europe as well, but I think 2025 might be too soon to observe significant changes.
