2025: Five Predictions On This Year’s Trends, Market & Benchmarks

We are barely a month into 2025 and we’ve already seen a number of major events with the potential to redefine not only the start-up, scale-up and tech sectors, but the entire economy.

The inauguration of Trump’s second term was applauded by big tech moguls and accompanied by a flurry of executive orders withdrawing the US from the main climate agreements—as well as statements potentially destabilising international relations.

Mark Zuckerberg, for one, embraced the 47th US president’s views by announcing the end of censorship and fact-checking on Meta platforms in the name of free speech.

Finally, Chinese AI start-up DeepSeek released a Large Language Model which they claim to have built with only $6m and 2,000 NVIDIA chips—a fraction of any other leading chatbot in terms of cost and efficiency—and added insult to injury by making it completely open-source, sending the whole US tech sector in a panic.

At a time like this, it’s hard to make predictions that are anything more than slightly educated guesses, but we thought we’d try anyway by gathering all that VCs and Founders had to say when asked: what does 2025 have in store for tech scale-ups?

AI Will Reinvent Processes Rather Than Products

Out of 15 Founders who shared their predictions with TechRound, more than half focused on AI. It’s unanimously considered the breakthrough technology of the decade—if not the century—so it only makes sense for it to be first on our list of 2025 predictions.

Chinese open-source LLMs aside, there is no doubt that AI is well on track to revolutionise the enterprise software sector, but how?

The twenty-odd VCs that spoke to TechCrunch about it seemed to somewhat agree that it’s not going to be about adding AI-powered features in every single product, but rather by transforming the way enterprises operate by embedding AI behind the scenes.

This will open up previously unviable opportunities for entire sectors. For example, says Northzone Partner Molly Alter, “we’re seeing AI automate so much behind-the-scenes work that sectors like accounting services, or revenue cycle management, or white-glove legal services can now command software-like margins”.

Trump Administration’s Anti-China Policies Will Free Up Billions In Investment

We know, this one’s a bit unexpected, but Chinese investors pour billions every year into the American VC market. More precisely $28bn in 2023, per Fuel Venture calculations.

Because of Trump’s strong anti-China views and policies this cash flow could soon vanish, redirected towards other western markets that Chinese investors are looking to enter. The UK is the obvious candidate, boasting a mature tech market and global leadership in sectors such as healthcare and BioTech.

Jing Jing Xu, Managing Director at Fuel Ventures Asia, said: “The UK is becoming an increasingly attractive destination for Chinese investors. The quality of UK technology and innovation stands out globally, offering more consistent growth opportunities compared to other markets.”

Fuel Venture quantifies the funding that may become available at around $33bn.

Green Energy In Europe & The UK Can Benefit From Trump’s Pro-Oil Policy

Trump didn’t wait long before signing a slew of executive orders marking the end of Biden’s green transition. While all renewable energy producers were affected negatively—with the possible exception of geothermal—Trump was particularly harsh against wind, even going out of his way to attack the UK’s push on offshore wind in the North Sea in favour of more oil and gas drilling.

While this is unequivocally bad news for climate change, the planet, and the Green Energy sector as a whole, some experts have welcomed the news urging the EU and the UK to step into the sustainability leadership void being left by the US.

Scottish Deputy First Minister Kate Forbes saw yet another positive spin for Scotland and the UK, telling Holyrood Magazine: “We have 40GW of offshore wind in the pipeline, and you’ll know if you do the maths, at peak time our needs as a country are far less than that in terms of electricity, so the opportunity to invest in data centres, all these intensive industries that rely on clean energy, is huge.”

VC Expectations For Funding Rounds Will Rise

When TechCrunch asked VCs “What does it take to raise a Series A as an enterprise startup in 2025?”, their predictions were all over the place in terms of numbers.

Team8‘s Liran Grinberg was optimistic, saying that a few hundred thousand dollars of ARR are acceptable with a good market fit and an ambitious vision. Databricks Ventures VP Andrew Ferguson was the most conservative saying that $2m to $5m in ARR may become the expectation for a good Series A Round.

Other answers laid in the middle of these two, but all VCs agreed that companies hoping to raise will face stricter scrutiny in the face of increased enterprise adoption of AI and the tech maturing. Particularly relevant metrics—other than ARR—will be growth, burn multiples and product-market fit.

M&A And IPO Markets Will Cautiously Resume Business As Usual (Yes, Even In The UK)

We’ve saved our safest prediction for last.

We’ve long known that president Trump is not a fan of strict regulatory M&A scrutiny from the SEC. As a matter of fact, he signed executive orders just days into his second presidency that strongly suggest a shift in the enforcement of antitrust laws towards a more lenient approach.

On the contrary, the CMA in the UK is likely moving away from its previous policy of clearing deals bar exceptional circumstances, towards a higher percentage of conditional approvals.

However, the general consensus seems to be that—thanks to the high amounts of dry powder that has been raised throughout 2024, as well as the influx of US buyers in UK and European markets—will result in a net-positive in terms of M&A deal flow on both sides of the pond.