"Investors are being stingy in San Diego. Cash-poor venture capitalists are consolidating their money into what they believe will yield the biggest payoff startups in big cities building AI. Now, head south down the California coast to see local life science startups feel the squeeze. San Diego companies hit a six-year low for fundraising in 2025. San Diego County startups raised $897 million in the last three months of 2025, down 36% from a year ago and this was the best quarter of the year."
"It's sort of analogous to what's going on in the world economy, where you have that Magnificent Seven' carrying the market, said Mike Krenn, managing director for Prebys Ventures. Out of nearly 15,000 deals completed in 2025, over half of all funding went to just seven companies, according to PitchBook, an industry research firm. The largest deal of the quarter San Francisco-based Anthropic's $14 billion raise was equal to what every San Diego startup has raised since 2023."
"Everything's AI AI companies dominated the fundraising landscape in 2025, drawing over $3.3 trillion 45% of total investment this year with most capital flowing to the Bay Area, New York and Los Angeles, respectively. Meanwhile, life sciences and health tech startups, the industries that dominate San Diego, were among the smallest raising verticals at $6 billion each. It's not like San Diego companies aren't integrating AI into life science research; it's just harder, explained Peter Stockburger, partner at Dentons Venture in San Diego."
San Diego startups hit a six-year low in fundraising in 2025, with San Diego County companies raising $897 million in Q4, down 36% year-over-year despite that quarter being the best of the year. National venture capital activity remained strong, with over $510 billion in U.S. deals in Q4 and AI companies drawing about $3.3 trillion—roughly 45% of 2025 investment—mainly flowing to the Bay Area, New York and Los Angeles. Over half of 2025 venture funding went to seven companies, and the largest single raise, $14 billion for Anthropic, equaled total San Diego startup funding since 2023. Life sciences and health tech raised relatively little, around $6 billion each, making capital harder to secure for San Diego life science firms even as they work to integrate AI into research.
Read at www.sandiegouniontribune.com
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