What's Getting Funded in 2025

Hey y’all — what will get funded in 2025?

This week I’m sharing some predictions for what directions investors will look in the year to come.

These are based on my conversations with investors and founders over the last few weeks, along with what I’m seeing folks post publicly online.

If you’re looking to start something new, or wondering what direction to take your existing startup, here are some to consider:

On the Pod: Pujun Bhatnagar

You know when you meet someone and you just get inspired?

That’s how I felt when I first met Pujun a few years ago, when he dropped out of Harvard’s MBA program to join my accelerator, Launch House, and build a new startup.

Since then he successfully sold the the startup he started during our program, and has now gone on to see the beginnings of true hockey stick growth with his new one, Kintsugi.

We chatted about founder psychology, hypergrowth, and a lot more.

Check it out below on YouTube, Spotify, or Apple Podcasts.

12 Areas Getting Funded in 2025

Voice AI

It’ll come as a surprise to no one that AI will continue to be heavily funded in 2025.

But consumer preferences have already changed significantly from the launch of ChatGPT in November 2022 — we continue to run on the hedonic treadmill, and our bar for being impressed has risen substantially.

Novelty fades quickly.

So, what’s the next thing? It’s voice.

Your kids might think it’s weird you ever typed… into a computer… using your fingers.

Domestic Manufacturing

Yes, really.

It’s been decades since manufacturing was hot in the US, but that is changing.

American dynamism is going mainstream.

Some of the most ambitious people I know are now thinking about how to build factories, rather than software.

When you think of a factory you might think of something dirty, run down, etc.

These will be the opposite — hyper efficient with full-automation to drive costs down, extremely modern and impressive.

And, as these get built, entire supply chains will need to rapidly adjust themselves.

Get ready.

Cities

Did you know there are multiple projects happening right now, with significant funding, that are optimistic about federal support to help them establish entire new cities in the US?

You’ve probably heard of Praxis, which raised $525M in financing for a new city in the Mediterranean, but other efforts are happening inside the US.

I’m not going to burst their launch announcement bubbles, but real action is happening (one is even diligencing a location right outside SF). Another has secured land already.

I’ll admit it was weird to see a pitch deck for a city, but I’m all for this. America has a lot of land — let’s make use of more of it, give people more space, and build new frontiers here at home.

AI-powered Social Media

The dead internet theory says that the majority of the interest is actually just bots, and most of the time people don’t even know they’re interacting with bots (I’m not a bot — I promise).

But maybe interacting with AI in a social way online isn’t inherently a bad thing.

Look, it’s been 5 years since TikTok blew up in the US early on in the pandemic and, since then, there’s been a major technological shift.

Yet no new social app with true stickiness has emerged since.

I can’t tell you what it will look like, and yes this does feel like the type of prediction that’s easy to make every year, but especially now that we’re seeing agentic capabilities for AIs unlocked, don’t be surprised if this is the year.

Personalized Software

In a few weeks you’ll see the Founding Journey podcast episode with Luke Sophinos, a friend and Thiel Fellow who’s one of the most

We talked about how, at first, SaaS was horizontal — it was able to meet customer expectations, even in b2b, regardless of the type of customer without changing the product.

VCs liked this because it was obvious these markets were huge, if you hit on software that added value.

But customer expectations have risen (there’s the hedonic treadmill again) and in the last few years we’ve seen vertical SaaS, where the software is specifically build for that type of customer, become their first choice.

These markets appear smaller at first, but you can actually own more of the value chain and offer a multi-product company to reach venture scale.

The logical next step, that LLMs now enable, is personalized software. Or, at the very least, company-specific software.

Klarna recently ditched major SaaS contracts with Workday and Salesforce to build their own, Klarna-specific internal tools. Agencies have already popped up offering this as a service to startups.

Some VCs will be skeptical that these markets are able to be captured, given that each customer within them is being treated as unique, but I think we’ll see that solving that is much easier than in the pre-LLM past.

I expect startups that solve this for companies, as well as ones that solve it for consumers, will get funded.

Government Efficiency

Elon has committed to guiding a dramatic cutting of government spending. Ironically, this means opportunity and budget for startups.

Selling to governments has typically been avoided by startups because of all the red tape, but without as much of that and with a mandate to reduce cost, well… I smell automation.

My advice here? Find a co-founder who’s worked in the government, understands where the bottlenecks are, and knows the people who are making decisions of what to cut/replace.

B2B Stablecoins

Bitcoin’s worth $100k, Pudgy Penguins did a $1.5 billion airdrop, and a “decentralized trading card” company just raised $4 million.

Needless to say, we are so back.

More seriously, we’re likely going to see companies looking to help businesses handle crypto. Stripe is trying to get ahead of this, but I think we’ll see some interesting options from startups.

Inflation has changed the lives of millions since the last crypto bull cycle. Combine that with what’s sure to be a crypto-friendly next four years from a regulatory perspective and you get both an appetite and opportunity to build viable rails outside of fiat currency.

Let me pay my bills with $PEPE already.

Data-as-a-service

Building products is getting easier, but getting the right data will get increasingly hard in 2025.

Value will accrue around companies that service others by delivering that data to them on-demand.

Legacy players like ZoomInfo, Crunchbase, etc will begin to get out-competed by new entrants with more specific use cases and friendlier relationships with their customers.

AI’s iPhone Moment

The AI phone won’t be a phone. It’ll likely be headgear (but, you know, not a headset).

The first truly magical device since the iPhone will make you use your eyes, ears, and voice — not your fingers.

While the device itself will likely come from OpenAI, every time there’s a new platform that millions of people use, startups are needed to build software for those platforms (like the App Store on the iPhone).

The future’s hazy here, but I’m hopeful we’ll see this delivered in 2025.

Small Cap Startups

Traditional VCs won’t be interested in this, but with more founders eschewing VC due to the lower cost to get a startup off the ground, and the amount of opportunity for “Silicon Valley Small Businesses,” we’re going to see alternative funding structures become more common.

Nothing gives an investor confidence in writing a check like trusting the founder knows what they’re doing, so it follows that investors will find a reason and a way to back founders going this route — even if the founder isn’t planning to build a traditionally venture scale business.

Robots

I invested in Figure.ai a couple years ago, and they just announced commercial delivery of their humanoid robot for the first time — after only 31 months.

This is arguably the largest market in history, and there are tons of more companies needed to support and expand it.

I recommend starting by just following Figure’s founder, Brett, on LinkedIn or X/Twitter to get inspired.

Agentic Applications

This one’s a no brainer at this point so I won’t spend much time on it, but we’re going to continue to see startups building specialized agents (or supporting them / facilitating their use) get funded.

It’s easy to forget that OpenAI released o1 just 3 months ago.

We haven’t yet begun to see the second and third order impact of agents.

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