Inside the VC Pulse: Making Sense of US Funding Trends in October 2025
In our previous post, we analyzed key insights from September’s funding trends. The October data offers further perspective into capital allocation patterns, sector concentration, and how AI continues to shape the startup funding industry.
Funding by Sector Classification
Figure 1: Heatmap of Funding Raised by Sector, Data source: Crunchbase
Heatmap shows the industries that raised the most capital in the pre-seed, seed, and Series A stages were operating in Internet, Generative AI, and Biotechnology, respectively. Payment startups and AI also consistently demonstrated the ability to attract larger funding across these early stages.
Quantifying the AI Impact
Figure 2: AI vs Non-AI funding characteristics, Data source: Crunchbase
In the pre-seed round, seed round, and series A, AI startups represented roughly 55%, 38% and 35% respectively. While they comprised about 55% of the cohort in pre-seed, they demonstrated the ability to raise 75% of the total capital in this segment. The median AI deal in the pre-seed stage was 11x higher than non-AI, an amazing display of dominance.
In the seed stage, AI companies, on an overall basis, were overshadowed owing to a few large deals that skewed the data. While AI companies comprised 38% of the seed stage, they attracted only 21.6% of the capital. However, on a median basis, they exhibited a 30% + premium to non-AI companies in terms of average money raised.
Further, in the Series A stage, AI businesses made up roughly 35% of companies but commanded 48.8% of total funding. The median deal size in this segment was slightly below that of non-AI peers.
10 Cities Contribute 48.2% of the US deals
Figure 3: Top 10 Cities by funds raised, Data source: Crunchbase
As noticed in the previous post as well, San Francisco and New York together contribute a large bulk of the deals. However, this dominance in October was a bit shallower, with the two cities capturing 30% of the entire pre-seed,seed, and series A fundraise.
From Founded to Funded Timelines
Data on the funding timeline offers a crisp understanding of how capital raising is panning out in the life cycle of a startup. October data shows that on a median basis it took business:
- 1.3 years to raise Pre-Seed investment
- 2.7 years to raise Seed
- 3.8 years to raise Series A
Figure 4: Funded from the founded timeline, Data source: Crunchbase
The AI industry exhibited a shorter tenure of 1 year in pre-seed, 1.9 years for the seed stage, and 2.8 years in Series A fundraising. It was among the fastest to progress in each stage.
This progression, however, varies sharply across industries.
In the pre-seed stage, October data showed that Financial and AI companies had the shortest duration of 0.8 and 1 years respectively. On the other hand, Fintech and SaaS took the longest, 4.8 years and 1.9 years, respectively.
In Seed funding, Apps and AI led the pack, raising seed rounds on a median basis time of 0.8 and 1.9 years, respectively. In contrast, medical devices and e-commerce were trailing behind and took 5.3 and 4.4 years, respectively.
In Series A, Information Technology and SaaS were the fastest to be funded, taking 2.7 years vs the longest tenure taken by Financial services and biotechnology, which took 6.8 years and 4.8 years respectively.
Conclusion
While one month of data is never sufficient to draw broad conclusions, the October 2025 data shows funding getting slightly more broader in the US and not as heavily concentrated in San Francisco and New York as it was in September.
October data underscores that, while certain industries convert innovation into funding velocity, others follow an extended validation cycle before attracting capital.
On a month-on-month basis, the number of companies funded fell by 27%, and was 12% lower on a yearly basis. It was a quieter month overall — a pause in momentum that may reflect temporary seasonality or the start of a more measured investment climate.
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