Americas

VC investors in the US were more cautious with their capital in Q2’25, driven in part by uncertainties, including shifting US tariff policies, potential exposure to counter tariffs by other jurisdictions, the economic impact of major headcount reductions within the federal government, and rapidly evolving geopolitical conflicts and tensions. Deal speeds slowed considerably as some VC investors — particularly corporates — extended their due diligence processes or decided to hold back from making major investments until the market becomes more predictable. Seed and early-stage deals saw the biggest slowdown in activity during Q2’25 as VC investors focused heavily on the profitability and growth trajectories of potential target companies. 

Within the Americas, there was some bifurcation of investment trends in Q2’25, with startups in a number of sectors feeling a lot more pressure than others. This was most prominent in the US, where sectors viewed as critical to the national benefit — including defencetech and AI infrastructure — continued to attract robust levels of VC investment, while sectors like electronics, automotive manufacturing, and consumer goods saw much more of a funding pinch. 

The level of VC investment in Canada held steady quarter-over-quarter, helped by a diversity of investments, including the $160 million raise by Tailscale, the $80 million raise by Destiny Copper, and a $76 million raise by small-business finance platform Keep; medtech company Lungpacer also raised $75 during Q2’25. VC investors in Canada were quite conservative with their capital in Q2’25, focusing heavily on cash management, cost management, and late-stage companies within reach of breaking even or becoming cash flow positive.

During Q2’25, fintech, cleantech, healthtech, and alternative energy remained the most attractive sectors for venture capital investment in Canada. Interest in defence technology is also gaining momentum, as Ottawa and allied nations prepare to boost military spending in response to America’s new isolationist foreign policy stance. The Canadian government also continued with its efforts to enable AI development; during the quarter, it opened applications for the AI Compute Access Fund — a $300 million fund aimed at making it more affordable for small and medium sized businesses in Canada to access the computing power needed to develop AI applications.¹

Within Mexico, VC investment was very quiet in Q2’25. Car sales platform Kavak was one notable exception; the company raised $127 million during the quarter, although the raise was a down round which saw its valuation cut sharply from $8.7 billion (in 2021) to just $2.2 billion.² VC deal volume was also weak in Q2’25 as VC investors showed great reluctance to invest in Mexico given the amount of geopolitical volatility, uncertainties related to US tariffs, and concerns relating to judicial reforms within the country.

The fintech sector saw a significant amount of attention in the Americas during Q2’25, with fintechs across the region raising solid funding rounds, including US-based open-banking platform Plaid ($575 million), Brazil-based corporate expense management firm Clara ($80 million), and Canada-based small business finance platform Keep ($76 million). 

Within the fintech sector, there was also a noticeable uptick in interest in crypto during Q2’25, helped by the successful US-based IPOs of stablecoin issuer Circle and crypo investment platform eToro. The US also saw continued movement to build out and institutionalize the crypo ecosystem, driven in part by the new administration’s pro crypto stance and by regulators moving to provide clarity around the definition of securities, the treatment of stablecoins, and the accounting rules related to the holding of digital assets.