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Ahead of the Curve: Pivotal Partners Weigh in on Venture Capital Trends for 2025
As we all settle into the new year, the venture capital industry is at an inflection point. It’s no secret that the market for emerging managers has been challenging, with first-time fundraising at its lowest point in a decade. This slowdown hurts underrepresented founders the most. Earlier this month, for example, PitchBook reported that women founders took in just 22.7 percent of total venture capital deals—the smallest share since 2017.
Photos courtesy of Ellen DaSilva, Rebecca Egger, Lan Xuezhao, Rachel Holt, Julia Huang
At the same time, we see unprecedented opportunities for growth, from AI and climate tech solutions to professional sports and digital healthcare. At Pivotal Ventures, we are committed to the idea that funds and companies led by women are positioned to serve overlooked markets and seize the potential for breakthrough innovation across sectors—driving growth not just in individual industries but entire economies.
Our investments strategy focuses on emerging fund managers—in particular women—who back technical experts in frontier industries like AI, climate, and deep tech, as well as Series A start-ups working to fill key gaps in our care economy and build financial resilience for families and small businesses.
As we think about the year ahead, we asked several leaders for their predictions about innovation and trends to look out for. Here’s some of what we heard:
Digital Healthcare with a Human Touch
Photo courtesy of Ellen DaSilva
Ellen DaSilva, Founder and CEO, Summer Health
Pediatric healthcare is set to see major innovation in AI-based at-home diagnostics. How transformative would it be if you could take a photo of the back of your throat and get a strep diagnosis, or a quick scan of your ear with your phone and get an ear infection diagnosis, all without going into the doctor's office? However, while AI and automation can elevate healthcare, the human touch remains essential. There is market fatigue for generic telehealth services, with families facing a revolving door of providers. We are working to bridge this gap by combining state-of-the-art technology with the consistency of care from a trusted, dedicated provider.
Photo courtesy of Rebecca Egger
Rebecca Egger, Co-Founder and CEO, Little Otter
AI tools are becoming indispensable in behavioral health—a standard part of every company’s tech stack. Companies and tools that make it easy to leverage your own data to develop proprietary AI solutions are going to be in demand across behavioral health (and all of healthcare). These tools enable more personalized and effective care solutions.
The era of one-size-fits-all solutions is fading. The behavioral health field is recognizing the importance of specialized care tailored to specific groups like children and families. Generic solutions have often failed to meet the unique needs of these groups. Companies that offer customized approaches are stepping in to fill this critical gap.
Unlocking Productivity for Companies and People
Photo courtesy of Lan Xuezhao
Lan Xuezhao, Founding and Managing Partner, Basis Set Ventures
Deep tech is set to see a major influx of investment, particularly in defense, space, and robotics. Meanwhile, robotics continues to drive efficiency and productivity across industries. This funding boom aligns with U.S. goals to foster innovation, create high-value jobs, and stay globally competitive. The crypto and AI intersection is also poised for significant growth, opening up new opportunities for innovation. We invest in companies that fundamentally transform the way people work, recognizing the power of AI to improve productivity across all sectors of the economy.
Photo courtesy of Rachel Holt
Rachel Holt, Co-Founder and General Partner, Construct Capital
2025 will be the year of physical AI, especially in foundational industries like manufacturing, supply chain, and energy. Declining sensor costs, cloud infrastructure adoption, and expanding robotic autonomy have created the groundwork for new foundation models paired with agentic AI. These technologies will connect, automate, and transform labor-intensive physical environments like the shop floor, marking a major technological inflection point. Our investment strategy remains AI-first, focusing on emerging physical AI models and capabilities that are now ready to be applied across industrial, manufacturing, and other physical sector landscapes.
Photo courtesy of Julia Huang
Julia Huang, Founding Partner, Vesey Ventures
Imagine a world where businesses have instantaneous visibility and control over the flow of transactions, cash, and overall financial health—this is the future we’re building toward. We’re committed to growing our investments in optimizing this “CFO stack,” building on advancements in cloud, data, and AI over the past decade. Looking ahead to 2025, two emerging verticals stand out: CFO tech and wealth tech. These areas are gaining momentum, driven by societal shifts, increased data availability, and transformative technological advancements. By investing in these spaces, we’re enabling businesses to unlock unprecedented financial clarity and control.
This article originally appeared on LinkedIn.
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