Carta’s latest data through Q2 2025 shows the venture market stabilizing with significant valuation recovery over the past 18 months, even as deal selectivity continues tightening.
2025 vs 2024: Valuations Up 15-25 Points, Deal Volume Down Another 5-13%
2025 vs 2024 Changes
Seed Stage:
- Valuations: +15 percentage points better
- Deal volume: 13 percentage points worse
Series A:
- Valuations: +17 percentage points better
- Deal volume: 10 percentage points worse
Series B:
- Valuations: +25 percentage points better
- Deal volume: 5 percentage points worse
2025 vs 2023 Context
The valuation recovery is even more dramatic when compared to 2023 lows:
Series B hit bottom around -50% in late 2023, now recovered to -20% – a 30 percentage point swing upward.
Series A bottomed around -25% in 2023, now positive at +2% – a 27 percentage point recovery.
Seed maintained relative strength throughout, never dropping below flat vs 2021 levels.
What’s Driving The Recovery
Valuation stabilization suggests investors have recalibrated expectations and are paying market rates for quality companies again, rather than the deep discounts seen in 2022-2023.
Continued deal volume decline indicates the quality bar remains high – VCs are comfortable paying fair valuations but only for exceptional companies.
Series B leading recovery makes sense: these companies have 2-3 years of performance data through the downturn, proving resilience and model durability.
Current Market Reality
The 2025 market operates on fundamentally different parameters than 2023:
- Higher valuations for companies that clear the quality bar
- Much lower deal volume – roughly half as many deals as 2023 levels
- Faster decision cycles for clear winners, longer for borderline cases
- Greater focus on profitability timelines and capital efficiency
Looking Forward
The data suggests we’ve moved past the correction phase into a “new normal” characterized by:
- Selective but fair pricing
- Quality-focused deal making
- Stabilized (though elevated) valuation standards
- Permanent reduction in overall deal activity
The 2021 comparison provides historical context, but the relevant comparison for founders is 2024 vs 2025: valuations recovering significantly — but for even fewer, “better” deals.
