Philly ends 2025 strong with $1.17B in Q4 VC, but total still trails 2024

After an uncertain year, Philly’s venture capital market ended 2025 strong, an improvement from trends during the first half of the year. 

The region brought in $1.17 billion across 116 deals in Q4 2025, according to the latest Venture Monitor report, released quarterly by PitchBook and the National Venture Capital Association. 

The final data for the year show sustained deal activity, Antonia Dean, partner at Black Operator Ventures, told Technical.ly. The total amount of VC raised for the year was $3.76 billion across 469 deals, less than what the region brought in in 2024, though it still shows consistency in the region’s venture activity.

“That speaks to a point around durability of what’s happening here in the ecosystem,” Dean said. “The companies that are raising here are building durable solutions that can really sustain ups and downs of different market conditions and market cycles.” 

Revised data shows that Philly startups raised $867 million across 123 deals in Q1, $934.8 million over 109 deals in Q2 and $785.3 million and 121 deals in Q3. As it came out in real time, PitchBook reported much lower figures in the first half of the year, but data is subject to change from quarter to quarter as the most up-to-date figures trickle in. 

Year over year, 2025 saw both less money raised and fewer deals, though the deals themselves were worth more, which aligns with national trends, according to Dean Miller, president and CEO of the Philadelphia Alliance for Capital and Technologies. 

Philly also differentiated itself from overarching trends in Pennsylvania. Across the commonwealth, deal flow activity took a dip in Q3 and rebounded later in the year, finishing out with more funding raised than in 2024. 

However, Philadelphia is a good representation of national venture capital trends, Miller said. Its wide variety of sectors represents many entrepreneurs and strong companies that will continue to grow, he said. 

Philly added some new investors last year, too, like the launch of Proofpoint Capital and a new angel investment group started by the Chester County Economic Development Corporation. 

The region also ranked in the top 10 venture capital markets globally last year, according to PitchBook. 

“We have hundreds of deals that close on an annual basis across all those sectors,” Miller said. “We are not a tiny player that does a few deals over here. We’re a big player and a growing player nationally.”

Late-stage deals helped VC rebound 

Part of the VC rebound in the second half of 2025, in Philly and nationally, was driven by a handful of large, later-stage deals rather than widespread investment activity, Howard Lubert, regional president of Keiretsu Forum Mid-Atlantic, told Technical.ly. 

Last quarter in Philadelphia, those large deals included Gopuff’s $250 million raise and Impulse Dynamics’ $242 million raise, which were the top two deals of the quarter. 

National VC activity was buoyed by large deals in AI, but Philly isn’t home to many of those major players.

Venture capital recovery nationally is also due to an improvement in macroeconomic conditions. At the start of 2025, deal flow was slow because of uncertainty associated with the incoming Trump administration, Miller said. Macroeconomic conditions like federal funding cuts and tariffs caused investors to be more cautious with their money. 

Now that uncertainty is the new normal, investors are learning how to factor it in, he said. 

This year also solidified that the highs of 2021 and 2022 were an anomaly, according to Miller. Instead, deal flow is steadying in Philly.

“2025 was a year of regrowth, but not a return to previous practices,” Lubert said. “The year did not revive the 2021 approach. Instead, it confirmed a new standard: demonstrate value quickly or risk being left behind.” 

Increased deal activity expected in 2026

Going into 2026, Miller is optimistic that the region will see more deal activity. 

Private equity had a really good year last year, whereas venture capital did not, Miller said. Later-stage private equity deals generated exits that allowed investors to recoup capital and reinvest it, a dynamic VC investors largely did not experience.

It matters what’s happening in private equity, though, because it shows that there is activity, Miller said. In order to get back to consistent deal flow, there needs to be more exits. 

“We’ve seen capital start flowing. We’ve got some good economic indicators that would suggest we’re not going to be thrown into recession. You’ve got the private equity market, which is a little later, is seeing some really good exits,” he said. 

Lubert, however, doesn’t expect things to change much in 2026. Deal activity should increase, but the trend of activity being driven by fewer larger deals will continue, he said. 

Founders preparing to raise in 2026 should be aware that the standards for investments have changed, Lubert said. Investors are taking more time to explore companies and make sure they can present clear goals, execution and customer traction.

This is a return to fundamentals, Dean from Black Operator Ventures said. Companies have to prove they have strong growth potential to secure funding. 

“Investors have raised the bar, and that means that companies have to meet that bar and be much more sustainable,” Dean said. “Philly is not a hyped town. The companies that are built here, that get to those later rounds of financing, Series B, C, D and beyond, they know that.”