Jul 2, 2025
Kaley Ubellacker
Market Stirrings 🚩
Here's what the week looked like in pre-seed:
$29.6M
17
Data aggregated from proprietary research and Crunchbase; valuation estimate based on 10-20% ownership stake.
FULL STEAM AI-HEAD
AI & Data remained the dominant sector in June, capturing nearly 40% of all pre-seed capital raised, nearly double that of fintech, which held steady at 22%. Travel & Hospitality also made a surprise appearance, gaining traction as a new entrant to the pre-seed landscape. While fintech continues to attract consistent funding, AI is the clear winner, widening the gap in what’s become an ongoing race for early-stage investor attention.
Good Reads 📖
For the rushed reader …
Menlo Ventures just dropped its "2025: State of Consumer AI" report, putting data behind how AI has officially gone mainstream.
Two months after raising its $5.3 million pre-seed round, Cluely, an AI startup marketing itself as a tool to help users “cheat on everything,” just announced a $15 million Series A led by Andreessen Horowitz.
Venture capital investments in climate tech continue to decline globally, dropping to $37.8 billion in 2024, a 38% fall from the 2021 peak.
For the less rushed reader …
Saying the big "AI do"
There’s one concept no one is fighting anymore: the bots are hot. Menlo Ventures just dropped its "2025: State of Consumer AI" report, putting data behind how AI has officially gone mainstream. 61% of U.S. adults have used it in the past six months, with nearly 20% using it daily. However, the $12B consumer AI market is still early, with only 3% of users currently paying for AI tools, highlighting a huge monetization gap and opportunity for founders. Surprisingly, millennial parents are power users, and everyday utility, like emails, to-do lists, and meal planning, is driving widespread adoption. Default tools like ChatGPT dominate today, but switching costs are low, which leaves room for specialized products that deliver 10x better experiences to steal share and shape new habits. Just because ChatGPT is the prom queen now doesn’t mean another company can’t snatch the real crown.
Cheat codes
Are we sure the ex Carrie Underwood keyed a car for wasn’t just a deceptive AI bot? Two months after raising its $5.3 million pre-seed round, Cluely, an AI startup marketing itself as a tool to help users “cheat on everything,” just announced a $15 million Series A led by Andreessen Horowitz. The company, founded by Roy Lee, uses AI to generate deceptive content for social and professional scenarios, a controversial approach that has sparked both buzz and criticism. Despite having a minimal functional product at launch, Cluely built momentum through provocative marketing and viral content, reaching over 70,000 users and $3 million in annual recurring revenue before its full product release. Andreessen Horowitz backs Cluely as a new model for AI startups where speed, aggressive go-to-market tactics, and viral growth can be a stronger moat than a fully built product, highlighting a shift in how AI startups succeed in a crowded market. Maybe being a cheater cheater pumpkin eater is not such an insult after all.
Climate change for climate tech
Climate tech is feeling the heat, and it has nothing to do with climate change. Venture capital investments in climate tech continue to decline globally, dropping to $37.8 billion in 2024, a 38% fall from the 2021 peak. Within that, North America’s deal value dipped 7.5% to $16 billion. According to PitchBook, uncertainty due to shifting U.S. energy policies and supply chain issues has led many VCs to adopt a cautious “wait and see” stance, holding back capital despite North America historically propping up the sector. However, pockets of strength remain, notably in nuclear fusion and alternative energy, highlighted by Pacific Fusion’s $900 million Series A in March, which helped stabilize Q1 deal value at $9 billion despite fewer deals overall. As Energy Capital Ventures’ Vic Pascucci notes, energy expansion and efficiency is attracting support, while pure climate decarbonization faces a tougher fundraising environment. So while some startups face a drought, you could say energy funding is current-ly strong.
Fire Up the Pre-Seeds🔥
Highlights from this week’s pre-seed raises:
fintech
Jarsy - Jar-dropping investments.
Jarsy raised $5 million led by Breyer Capital. Jarsy is creating a digital investment platform where anyone can invest in top private tech companies, for as little as $10.
fintech
Castle - Building bit by bit.
Castle raised $1 million led by Boost VC. Castle is building an automated bitcoin treasury platform for SMBs to grow their cash reserves by converting revenue into bitcoin.
SaaS
Waypoint AI - Putting the AI in maintenance.
Waypoint AI raised $3.1 million led by 42CAP and Dreamcraft Ventures. Waypoint AI is building an AI support engineer that automates software maintenance, like defect triage, investigation, and resolution, so engineers can focus on actual development.
Outro🚪
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