New lead in town: How corporate VCs are reshaping startup funding

As institutional venture capital continues to pull back, one group of investors is stepping into a more central role: Corporate Venture Capital (CVC). Long seen as a valuable syndicate partner – often bringing strategic insight and follow-on potential – CVCs were rarely viewed as the lead actor in a round. That’s changing fast.

In 2024, CVCs increased their capital deployment even as broader VC deal activity declined. In Q1 2025, they continued to show up in places traditional funds didn’t – not just as participants, but increasingly as leads, and often with a level of conviction that has real weight in a difficult market.

This isn’t a short-term shift in behaviour – it’s the start of a structural realignment. Why? Because corporates are increasingly looking for strategic exposure to disruptive technologies - especially AI. Because traditional VCs are writing fewer cheques. And because many founders are now open to slower-burning capital relationships if it means unlocking scale and validation.

For founders, this means CVCs now deserve a much more deliberate role in the fundraising strategy. Pulling in a corporate investor still takes time – internal alignment, strategic fit, and deal process are rarely fast – but increasingly, they may be the difference between a round that comes together and one that stalls.

Using the latest market data from CB Insights and Pitchbook, here's the lowdown:


1. CVCs are becoming a bigger share of the market

As many institutional VCs slow down their investment pace, corporate venture capital is taking a more prominent role. In 2024, CVC-backed funding increased 20% globally, reaching $65.9B – even as global venture deal volume hit a new 3-year low.

This isn’t just about CVCs gaining share because others are pulling back – it’s a real surge in absolute capital. Corporates are writing bigger cheques and playing more active roles in deal formation across all stages of the venture lifecycle.

It reflects a broader strategic shift: corporates are no longer passive co-investors tagging onto hot deals. They are now leading funding rounds, underwriting growth, and building deeper links to the innovation economy.

Founders who once treated CVC as a secondary option – or a late-stage ally – now need to think of them as core to the funding strategy, especially in sectors where traditional VCs have become more cautious.


2. AI is now the centre of gravity for CVC dollars

Of all the capital that corporates are deploying on a global basis, a disproportionate amount is flowing into AI. In 2024, AI startups received 37% of all CVC-backed funding and 21% of deals – both record highs.

This shouldn’t come as a surprise. In last week’s briefing note, we highlighted how AI is now absorbing more than one in four venture investments in Europe. CVCs are amplifying this shift, driven not by hype but by strategic necessity. For many large companies, AI isn’t just an opportunity – it’s a competitive threat.

CVC arms are becoming their front line for accessing new models, infrastructure, data plays, and application-layer breakthroughs. This includes foundational model work, robotics, customer automation, logistics optimisation – and more.

For AI-native founders, this is an open door. Many of the fastest-moving investors in early AI rounds today are corporate. And unlike traditional funds, they often bring distribution, data, and domain expertise to the table – not just capital.


3. Mega-rounds increasingly depend on CVC participation

As late-stage capital becomes harder to access, many of the largest rounds in 2024 and Q1 2025 included one or more CVCs – in some cases, they made the difference between a deal happening or not.

In Q4 2024, 46% of all global CVC funding went into mega-rounds of $100M or more. These deals included household names like OpenAI, Anthropic, Saronic, and Isomorphic Labs, and featured multiple CVCs including Microsoft, Google Ventures, Salesforce Ventures, and NVentures.

CVCs are playing a critical role in unlocking these rounds. Not just by bringing capital, but by providing commercial validation. When a corporate backs a $100M+ raise, it sends a signal to the market that the startup’s technology isn’t just exciting – it’s needed.

Founders raising large rounds should treat CVCs as core strategic partners, not last-minute adds.


4. CVC behaviour is strategic – but not predictable

One of the myths around CVC is that it inevitably leads to acquisition. In reality, fewer than 4% of startups backed by a corporate venture arm are ever acquired by the parent company, according to Pitchbook.

So why do corporates invest?

Some want early access to emerging tech. Others use venture arms to learn about new markets, hedge against disruption, or build optionality for future commercial partnerships. In some cases, CVC teams operate with nearly full independence from the parent business.

This makes due diligence on them just as important as the reverse. Founders should seek clarity on a CVC’s mandate: are they investing for financial return, internal roadmap alignment, or market intelligence? What’s their track record on follow-ons? Can they lead? Will they be active at board level?

Treating CVCs like traditional VCs can be a mistake. They play by different rules. But if you understand their rules, they can be powerful allies.

We explore some of the key risks and rewards of CVC involvement in point 7 below.


5. Europe’s CVC market is quietly strengthening

It’s tempting to lump Europe in with the global VC slowdown. But the data tells a more nuanced story.

Yes, deal count in Europe was down overall in 2024 – but so was every other region. The more important metric is capital invested. Whilst overall funding plateaued, Europe saw a meaningful rebound in CVC funding of 18% across the year and a QoQ surge of 57% in Q4 2024, defying the global trend.

More encouragingly, CVC deal count in Europe also grew in Q4, even as it declined at the global level. This suggests growing CVC confidence in the European tech ecosystem – particularly in verticals like AI, biotech, and sustainability.

But there’s a catch: much of the capital behind Europe’s largest CVC-backed rounds didn’t come from European corporates. It came from the US, Japan, and Korea. Names like Google Ventures, Samsung NEXT, Citi Ventures, and Capital One Ventures continue to be the most active CVC players in European deals.

The implication for founders? Don’t limit your CVC outreach to companies headquartered in your own country – or even your own continent.


6. CVCs are leading, not just following, in 2025

Historically, many CVCs took a passive approach: joining rounds led by traditional VCs and sticking to small cheque sizes. That’s changed.

In Q1 2025, CVCs played a more prominent role in early-stage rounds – in some cases stepping in where traditional VCs were absent or hesitant. They are moving faster, taking greater ownership, and in some cases, writing the first cheque.

Part of this shift is structural. CVC arms have become more professionalised, often staffed by former VCs or operators. And in some cases, they have dedicated funds and independent decision-making processes.

For founders, this means you can now think of CVCs as credible lead investors – particularly in pre-Seed to Series A rounds where strategic alignment is strong and where traditional VC interest may be slower to materialise.


7. The pros and cons of taking CVC money

CVCs can bring more than capital – they often offer market credibility, channel access, technical resources, and real commercial insight. But there are trade-offs.

Some corporates ask for terms that make future rounds harder (e.g. rights of first refusal, vetoes, or exclusivity). Others may move slowly or have strategic interests that don’t fully align with yours. And while some founders benefit from deep product partnerships, others find themselves navigating internal politics at the parent company.

The key is understanding the CVC’s structure, incentives, and history – and negotiating terms that preserve your ability to raise and operate independently.

If you're considering CVC, we’ve written more about the practical realities in our earlier newsletter: CVC investment into startups – pros and cons.


8. What this means for you

The CVC landscape in 2025 is not an add-on – it’s a primary path to capital. Founders who engage early, understand the incentives, and tailor their narrative stand to benefit. Those who ignore it may find themselves shut out of increasingly concentrated capital flows.

This doesn’t mean you should bend your pitch to chase corporate interest. But it does mean you should think carefully about which corporates might view your company as strategically relevant – and how to position accordingly.

Done well, CVCs can bring more than money. They can bring market insight, data partnerships, commercial pilots, and distribution channels. They can also unlock rounds that might not happen otherwise.

But CVCs are not all the same. Some move quickly. Others are slow. Some require internal business unit alignment. Others invest off their own P&L. Some will follow in your next round. Others won’t.

What matters is understanding who you’re dealing with, and building a fundraising strategy that reflects that.

CVC isn’t a silver bullet. But in 2025, it’s no longer a fringe player. It’s at the centre of the funding game. Founders who treat it that way will be better positioned to survive – and scale – in a market where traditional VC funding continues to tighten.

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