US Venture Funding Highly Concentrated
Venture funding in the United States became more geographically concentrated in 2025, with only California and Washington gaining market share year-over-year. The data from Crunchbase highlights the competitive landscape for startups, including InsurTechs, located outside of these primary technology hubs.
- The intense concentration of capital in 2025 meant that in the fourth quarter, just 8% of all venture capital deals accounted for 75% of the total funding. - Artificial intelligence was the primary driver of this trend, with five major AI companies—OpenAI, Scale AI, Anthropic, Project Prometheus, and xAI—alone raising a combined $84 billion. - Global InsurTech funding bucked some broader trends by increasing nearly 20% year-over-year to $5.08 billion in 2025, a surge driven by a near-doubling of mega-round deals. - Within the InsurTech sector, AI-focused companies were paramount, attracting two-thirds of all investment in 2025, totaling approximately $3.3 billion across 227 deals. - While overall venture capital is consolidating in West Coast hubs, the InsurTech sector is experiencing a geographic shift, with New York emerging as a prominent hub while Silicon Valley's influence in the sector declines. - A record number of insurance and reinsurance companies made direct investments in InsurTech startups in 2025, participating in 162 deals. - The focus for InsurTech investment has increasingly shifted to B2B Software-as-a-Service (SaaS) platforms, which captured the highest-ever share of VC funding in the sector. - For startups outside of the primary tech centers of California, New York, and Massachusetts, the median venture fund size was $10 million, which is less than half of the overall U.S. median fund size of $21.3 million.
