Watch out, fintech is on the come-up 📈
Apr 2, 2025
Kaley Ubellacker
Market Stirrings 🚩
Here's what the week looked like in pre-seed:
$2.2M
2
Data aggregated from proprietary research and Crunchbase; valuation estimate based on 10-20% ownership stake.
PRE-SEED’S ODE TO KATY PERRY
Is pre-seed in its flop era? The number of deals closed in Q1 has been steadily declining from 2021 to 2025. 2021 and 2022 saw strong early activity, but the years since have been more hot and cold, with 2025 bringing an especially sharp drop-off. The brief rebound in Q1 2024 hasn’t carried over, at least not yet. There’s still a chance late-reporting deals could change the story, and the reality of the strong rise of “stealth rounds.”
Good Reads 📖
For the rushed reader …
While venture capital investments have been declining, 2024 witnessed a jump in median pre-money valuations for fintech companies, soaring by 94.4% year-over-year across all funding stages.
Construct Capital, an early-stage firm laser-focused on tech for manufacturing, transportation, and defense sectors, announced the closing of its third fund with $300 million.
DeepMind's biotech prodigy, Isomorphic Labs, announced a $600 million raise in its first external funding round.
For the less rushed reader …
One way, exit only
After three years of the fintech sector doing the financial equivalent of ghosting, it is finally showing signs of a rebound. While venture capital investments have been declining, 2024 witnessed a jump in median pre-money valuations for fintech companies, soaring by 94.4% year-over-year across all funding stages. Later-stage deals and exits also point to a resurgence, including multibillion-dollar tender offers from enterprise giants like Stripe and Ramp. On the exit front, while the number of fintech exits saw a modest 5.3% increase in 2024, the cumulative exit value skyrocketed by 140.7% compared to the previous year. There's a watchful eye on whether these are sustainable trends, especially considering future Federal Reserve actions and potential market volatility in 2025. With investors watching fintech’s every move, it should be called an eye-PO.
Not another social construct
Move over, Bob the Builder; there’s a new construction crew on site. Construct Capital, an early-stage firm laser-focused on tech for manufacturing, transportation, and defense sectors, announced the closing of its third fund with $300 million. This new fund follows a $225 million second fund and a $75 million later-stage capital pool raised in 2022. The successful fundraise reflects a growing investor appetite for defense tech, likely spurred by geopolitical factors and policy shifts. Founded by a powerhouse duo from NEA and Uber, Construct is already backing innovators like Hadrian (think software supercharging aerospace manufacturing) and Veho (making sure even industrial supplies get that speedy last-mile delivery). Talk about building up a portfolio.
Compounding success
Looks like having enough protein does, in fact, pay off. DeepMind's biotech prodigy, Isomorphic Labs, announced a $600 million raise in its first external funding round. This capital infusion will fuel the company’s R&D efforts, advancing its next-generation AI drug design engine and enabling the expansion of their team with top-tier talent. Founded with the ambitious goal of revolutionizing disease treatment through AI, Isomorphic Labs has already established notable collaborations with pharmaceutical giants Eli Lilly and Novartis, focusing on multiple drug targets across oncology and immunology. If that wasn’t enough to make your neurons fire, their advisory board includes CRISPR wizard and Nobel laureate Jennifer Doudna. You could say Isomorphic is wearing the right genes for the job.
Fire Up the Pre-Seeds🔥
Highlights from this week’s pre-seed raises:
SaaS
Flight Science AI - Putting the pilot in autopilot.
Pepsales raised $1.5 million led by Outsiders Fund. Flight Science AI is building an AI aircraft situation display (ASD) that makes flight monitoring as easy as takeoff.
AI
Podonos - The eval-ution of testing.
Podonos raised $680k from Kaist Venture Investment Holdings and Serac Ventures. Podonos is developing an AI model evaluation platform for speech models that streamlines the process while reducing cost and time by 12x.
Outro🚪
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