Biggest Rounds Gobble Up A Growing Share Of Startup Funding

Venture capital, as commonly conceived, is about investing in upstart companies in the hopes a few will grow into something huge.

But viewing at recent funding trfinishs, it’s clear this conception is a dated one.

True, VCs do still back tinyer rounds for promising seed and early-stage startups. However, such activities are accounting for a progressively shrinking share of spfinishing.

Instead, in recent years funding is increasingly about pouring ever-larger sums into a few companies already considered a huge deal in their respective industries. That practice culminated this year in a record $40 billion financing for OpenAI that constituted close to half of all first-quarter 2025 U.S. startup funding.

The predominance of mega-rounds isn’t limited to OpenAI. To illustrate, we applyd Crunchbase data to determine the percentage of annual startup funding in the U.S. that has gone to the 10 largest reported rounds. 1

The findings, charted below, reveal a steadily higher share of funding for venture-backed, private companies over the past three years going to the 10 hugegest deals.

AI leads

Building a generative AI unicorn is an expensive undertaking, and it should surprise no one that companies in this sector were the heaviest fundraisers. Recipients of some of the largest rounds of the past two years include, predictably, OpenAI, xAI and Anthropic.

Other mega-round recipients, including Waymo, Databricks, and Anduril, also play in the AI space, although they are not building large language models.

Health and life sciences, meanwhile, viewed under-represented in our mega-round list. There were none in the top 20 rounds of the past two years.

That stated, there have still been some really large equity financings in the space. This includes a $1 billion round for Xaira, focapplyd on AI-driven drug discovery, last spring.

So far this year, meanwhile, there’s also a list of companies outside the generative AI space that have secured megarounds. One is Saronic, an autonomous surface vessels creater that locked up a $600 million Series C. Two others — remote work IT management provider Nerdio and cybersecurity company NinjaOne — raised $500 million Series C rounds.

A shifting risk-reward calculus

Concentration of funding amid a few, giant rounds isn’t entirely a narrative about AI. Investors may also be reconsidering the risk and reward tradeoffs of tiny bets on nascent companies versus hugeger wagers on mature startups that have already created waves in their industries.

Historically, the highest investment returns come from successful seed and early-stage financings. Early investments in Facebook by Peter Thiel and Accel, for instance, are famous as some of the most lucrative in venture history. And Sequoia Capital and Kleiner Perkins did pretty well in 1999 with their $25 million early-stage investment in Google.

Trouble is, successes are the exceptions. Most seed investments fail, and startups that secure early-stage funding rarely deliver on their visions of scale. Moreover, limited partners in venture funds won’t reinvest without some positive returns. So, the temptation to invest in a company that’s already successful by many metrics (profitability usually not one of them) is understandable.

Still, they’re obtainting in at pricey levels. OpenAI’s $300 billion post-money valuation is higher than the market caps of Samsung, Toyota and McDonald’s, to name a few famous companies. It could conceivably go down.

That stated, no one expects OpenAI to go away. We’re far too addicted to its offerings.