There's a mutation in the IPO market 🧪
Aug 20, 2025
Kaley Ubellacker
Happy Wednesday!
Happy Wednesday! If you’re new here, welcome to Necessary Nuggets, your one-stop pre-seed shop. We deliver updates from Necessary Ventures and helpful tidbits on our little corner of the world. Every edition is also on our blog.
Good Reads 📖
For the rushed reader …
Founded by three former tech professionals, early-stage startup Dex is tackling a longstanding problem in children’s education: how to teach languages without relying on passive screen time.
First-time VC managers who raised their debut funds in the record-breaking years of 2021 and 2022 are finding follow-on fundraising much tougher.
The U.S. biotech IPO market is cooling sharply in 2025, with just 16 biotech, medtech, and drug discovery startups going public so far.
For the less rushed reader …
Pixel perfect
Is it time to say bye-bye to Barnie? Founded by three former tech professionals, early-stage startup Dex is tackling a longstanding problem in children’s education: how to teach languages without relying on passive screen time. Their AI-powered camera device uses real-world object recognition to translate vocabulary into multiple languages and dialects, while also offering interactive stories, games, and a safe, guided chatbot. The device emphasizes hands-on, immersive learning and provides parents with detailed progress tracking, strong safety measures, and zero data retention. Dex recently raised $4.8M from investors including Ben Silbermann and Lillian Weng, showing strong early confidence in both the technology and the founders’ vision. If you want your kids to trade gibberish for their own secret language, it sounds like Dex could be for you.
Power law and order
The sequel is just never as good as the original, is it? First-time VC managers who raised their debut funds in the record-breaking years of 2021 and 2022 are finding follow-on fundraising much tougher. Only about a third of 2021 funds and 12% of 2022 funds have closed a second vehicle. Economic uncertainty, political shifts, and sector-specific headwinds, like rollbacks in clean energy policy, are spooking LPs, who now favor proven power-law bets over emerging managers. Moreover, a handful of large firms are raising more than half of all VC capital, concentrating influence and potentially limiting the flow of fresh ideas. With the median gap between funds historically under three years, this slowdown is unprecedented and raises longer-term concerns about nurturing the next generation of investor talent. The current environment is putting the “limited” in Limited Partner.
Mutations in the market
Nothing is IPO-ssible, but that certainly doesn’t make it easy. The U.S. biotech IPO market is cooling sharply in 2025, with just 16 biotech, medtech, and drug discovery startups going public so far. The slowdown is driven by investor caution, federal research cuts, regulatory upheaval, and uncertainty around drug pricing. Venture funding has also dipped, with $16 billion raised through growth-stage rounds, down 25% from last year. Yet the IPOs that have happened are notable for their size: Caris Life Sciences went public with a $9 billion valuation, and Metsera and Heartflow debuted above $2 billion each, showing that marquee exits still attract attention. For early-stage founders, the climate may actually present opportunities, as fewer startups mean less competition for talent and resources, making this a paradoxically promising moment to launch new biotech ventures. It might just be a gene-ius move.
Market Stirrings 🚩
Here's what the week looked like in pre-seed:
$4.1M
7
Data aggregated from proprietary research and Crunchbase; valuation estimate based on 10-20% ownership stake.
LOSING STEAM?
It’s no secret that climate tech hit some obstacles, but deal activity paints a far more intense picture. As of Q2 2025, total funding for carbon and emissions tech is on track to decline 10%, while the number of deals is set to drop 41%. Compared with the 2023 peaks, that’s a staggering 87% drop in dollars raised and a 49% decline in deal count.
Fire Up the Pre-Seeds🔥
Highlights from this week’s pre-seed raises:
climatetech
EcoPulse - Bonding with the supply chain.
EcoPulse raised $180k from ATX Venture Partners and Sputnik ATX at a $3.5 million pre-money valuation. EcoPulse is developing an enterprise platform that uses LLMs and a proprietary knowledge base to manage chemical risks across global supply chains.
AI
Spike AI - Making MAGIc.
Spike AI raised $1.9 million led by Sorin Investments. Spike AI is building MAGI, an AI operating system that orchestrates marketing end-to-end, replacing guesswork with measurable growth.
AI
Emblematic - Ledger-dary efficiency.
Emblematic raised $1.9 million. Emblematic is building AI agents that fully automate finance and accounting workflows, from invoice processing and reconciliations to compliance and anomaly detection.
JOBORTUNITIES
| Senior Embedded Systems Engineer | - Copper:
Rethinking the induction stove and making kitchen electrification more accessible than ever. Picture a fossil-free future, without sacrificing aesthetics.
| Production Engineer | - Infinite Machine:
Envisioning the future of transportation beyond cars and into the realm of personal electric vehicles. Its first product, P1, is the ultimate tool for city navigation.
Outro🚪
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Thanks for reading, and see you next week!
