MARKET BRIEF

May 3, 2025

Afternoon Update

Generated at 2:00 PM UTC•US Weekend

Highlights

U.S. judge orders Apple to allow external payment links in the App Store by June 2025, enabling Spotify and Epic Games to bypass Apple’s commission; Epic Games to launch EGS Webshops for iOS developers 1.
DOJ seeks breakup of Google ’s ad tech business, with remedies trial set for September 2025; potential divestiture of ad exchange, publisher ad server, and Chrome browser 2.
EU fines TikTok $600 million for GDPR violations related to data transfers to China; TikTok plans to appeal and highlights its European data localization efforts 3.
Temu halts direct shipping from China to the U.S. due to 145% tariffs and loss of de minimis exemption; pivots to U.S.-based warehousing and local seller recruitment 4.
Nvidia shares surge 4.5% as Microsoft , Meta , and Amazon announce $80B+ in AI infrastructure spending; Meta raises 2025 CapEx to $64–72B 5.
AI startup Decagon in talks to raise $100M at a $1.5B valuation led by a16z and Accel; strong traction in customer service automation with major enterprise clients 6.
Doppel raises $35M Series B to combat social engineering and digital fraud with AI-driven cybersecurity; led by The Values VC and Bessemer 7.
Siren Bio raises $5M via WeFunder crowdfunding for brain cancer gene therapy, supplementing $28M in prior VC; rare use of crowdfunding in biotech 8.
Stablecoin market cap hits $242B, with Tether nearing $120B in Treasuries; Bitcoin approaches $100K, and stablecoin transaction volume surpasses Visa 9.
BlackRock ’s IBIT leads spot Bitcoin ETFs with $2.8B daily volume and a 14-day inflow streak; institutional adoption broadens 10.
U.S. lawmakers urge SEC to delist 25 Chinese companies, including Alibaba and Baidu , over national security concerns 11.
Apple integrates Anthropic’s Claude Sonnet into Xcode for internal AI-powered coding; no public release yet 12.
Starlink receives Congo license, expanding satellite internet access in Africa after prior bans 13.
Zelle and Venmo outages disrupt digital payments across multiple banks due to Fiserv issues 14.
Waymo expands AV testing to Washington, D.C., claims 22% SF market share; Uber stock up 40% YTD amid driverless ride-hailing optimism 15.

Market Commentary

This week’s regulatory and platform news signals a pivotal shift in the power dynamics of the digital economy, with direct implications for venture deal flow and exit strategies. The U.S. judge’s order forcing Apple to open up App Store payment flows—combined with Epic’s zero-commission initiative—will materially alter the economics for mobile-first startups 1. This change levels the playing field for new entrants and could catalyze a wave of innovation in app-based business models, subscription services, and payments infrastructure. VC investors should anticipate increased deal activity in vertical SaaS, fintech, and developer tools as monetization friction decreases.

Antitrust scrutiny is intensifying, with the DOJ’s push to break up Google ’s ad tech stack and ongoing pressure on Chinese tech companies listed in the U.S. 2 11. Both trends could create whitespace for new entrants in ad tech, martech, and privacy-centric platforms, but also inject uncertainty into late-stage valuations and exit timelines for startups in these sectors. The regulatory risk premium is rising, particularly for companies with exposure to cross-border data flows or dependencies on Big Tech platforms 3. Investors should be vigilant about portfolio companies’ regulatory strategies and consider the potential for forced divestitures or abrupt market access changes.

The AI investment cycle remains robust, as evidenced by massive infrastructure commitments from Microsoft , Meta , and Amazon , and the strong fundraising momentum for Decagon and Doppel 5 6 7. Decagon’s rapid valuation step-up and Doppel’s successful Series B highlight continued appetite for AI-native vertical solutions, especially those driving enterprise efficiency or security. However, competition is fierce and market leaders are scaling quickly—investors should prioritize teams with clear enterprise traction and defensible data moats.

Meanwhile, the crypto and fintech sectors are showing renewed strength. Stablecoins are now a core part of global transaction flows, and institutional adoption of Bitcoin ETFs is broadening, as seen with BlackRock ’s IBIT inflows 9 10. This liquidity is likely to support further fintech innovation, but recent outages at Zelle and Venmo underscore the operational risks in digital payments—an area ripe for new infrastructure plays 14.

Finally, global expansion stories—from Starlink ’s African rollout to Waymo ’s AV push in D.C.—demonstrate the continued relevance of frontier markets and deeptech bets 13 15. The regulatory and macro environment remains volatile, but for VCs, these disruptions are creating fresh entry points and new exit paths. Watch for increased M&A as incumbents adapt, and be prepared for rapid shifts in sector leadership as regulatory and technology tailwinds realign the landscape.

Previous Updates

May 2, 2025

Afternoon Update

Generated at 2:00 PM UTC•US Trading Hours

Highlights

Epic Games to launch zero-fee initiative in June 2025, allowing Spotify, Patreon, and others to bypass Apple App Store fees; major court ruling challenges Apple’s fee structure 1.
Apple faces $900M cost increase from U.S. tariffs, accelerates supply chain shift to India and Vietnam; announces $100B stock buyback and strong services growth 4.
Movement Labs suspends co-founder after $38M MOVE token dump scandal; Coinbase to halt MOVE trading amid market manipulation concerns 2.
U.S. considers easing Nvidia AI chip sales to UAE, driving Nvidia shares up 5% as UAE pledges $1.4T in U.S. investment 3.
Amazon launches Nova Premier, a new AI model for image/video processing; Microsoft prepares to host Elon Musk’s Grok AI on Azure, signaling competitive AI platform dynamics 6.
Judge allows Elon Musk’s lawsuit against OpenAI to proceed on fraud claims, with expedited trial before March 2026 5.
UK’s FCA to ban retail investors from borrowing to buy cryptocurrencies, tightening consumer protection in digital assets 7.
Kraken posts $472M Q1 revenue (+19% YoY), $187M EBITDA, acquires NinjaTrader for $1.5B ahead of IPO; expands into traditional finance futures trading 9.
Aurora launches fully driverless trucking service in Texas, serving Uber Freight and Hirschbach; plans expansion to El Paso and Phoenix by year-end 10.
Tether mints $2B USDT , posts $1B Q1 profit, and grows treasury to nearly $120B in U.S. Treasuries; circulating supply up by $7B in Q1 11.
TikTok fined €530M by Irish regulator for illegal EU user data transfers to China, escalating regulatory scrutiny in Europe 12.
SPAC market heats up: Anthony Pompliano-led SPAC files $200M IPO; Cantor and Cartesian price $240M deals each, with April SPAC IPOs raising $2.6B—the busiest in three years 15.

Market Commentary

This week’s news cycle underscores a rapidly shifting landscape for venture investors, with regulatory, technological, and macroeconomic forces reshaping deal dynamics across sectors. The Epic Games court victory and subsequent zero-fee initiative signal a potential inflection point in the app economy, opening the door for startups and growth-stage companies to retain more revenue and challenge entrenched platform economics 1. Apple ’s supply chain pivot and tariff-driven cost pressures, coupled with robust services growth, highlight both the risks and opportunities for startups in hardware, logistics, and SaaS ecosystems as global supply chains fragment and digital services expand 4.

In crypto and fintech, the Movement Labs scandal and UK FCA’s clampdown on leveraged retail crypto investing reinforce the sector’s ongoing maturation and regulatory scrutiny 2 7. The MOVE token debacle is a stark reminder of the reputational and operational risks facing early-stage Web3 ventures, while Kraken’s strong financials and NinjaTrader acquisition show that established players are leveraging volatility and M&A to position for public market exits 2 9. Tether ’s ballooning reserves and continued dominance in stablecoins suggest that infrastructure plays in digital assets remain robust, though regulatory and compliance risks are rising, as seen in the U.S. Treasury’s action against Huione Group and the EU’s fine against TikTok 11 12.

AI remains a central theme, with Amazon and Microsoft’s moves to expand model hosting and infrastructure, and the U.S. potentially easing Nvidia chip exports to the UAE 3 6. These developments point to intensifying competition for AI talent, compute, and enterprise customers—factors that will drive valuations and deal flow in both core AI and adjacent verticals. The legal battle between Musk and OpenAI, alongside Neuralink’s FDA breakthrough, highlights the volatility and opportunity in frontier tech, where regulatory clarity and IP positioning can make or break early-stage bets 5 14.

The resurgence in SPAC issuance, led by crypto and tech influencers, signals renewed appetite for alternative exit vehicles and late-stage capital formation. Oversubscription and upsizing of deals suggest that liquidity is returning to growth-stage venture and crossover rounds, but investors should remain cautious of quality and long-term sustainability 15.

VCs should closely monitor regulatory shifts (especially in fintech/crypto and data privacy), supply chain realignments, and the evolving AI platform wars. The interplay between regulatory risk, platform economics, and technological disruption will create both headwinds and tailwinds for portfolio companies and new investments. Expect continued volatility in valuations and exit timing, with outsized opportunities for those able to anticipate and adapt to these macro and sectoral shifts.

May 1, 2025

Afternoon Update

Generated at 2:00 PM UTC•US Trading Hours

Highlights

U.S. Senate deadlocks on resolution to revoke Trump’s 10% global tariffs, leaving broad import duties in place amid economic contraction concerns1.
Dream Games (Turkey) secures $2.5B in funding from CVC and Blackstone at a $5B valuation, marking a major VC gaming exit as early investors fully cash out2.
Ripple’s $4B–$5B bid to acquire Circle (USDC issuer) rejected, with Circle pursuing a U.S. IPO and maintaining dominance in the stablecoin market3.
Galaxy Digital to list on Nasdaq May 16 (pending May 9 approval), signaling renewed U.S. crypto capital market activity and a focus on digital assets and AI4.
Sanofi sells 50% of Opella (Doliprane maker) to CD&R for €10B, with Bpifrance and ex-P&G CEO David Taylor joining; proceeds split between buybacks and AI investment5.
Merck KGaA to acquire SpringWorks for $3.9B (26% premium), while Kronos Bio is sold at a steep discount amid shareholder lawsuits, highlighting M&A volatility in biotech6.
Morgan Stanley plans to enable crypto trading for 5.2M E*Trade clients as early as 2026, potentially mainstreaming digital asset access for U.S. retail investors7.
Apple found in violation of App Store injunction, referred for possible criminal contempt; ruling forces Apple to loosen payment restrictions, boosting third-party app/payment startups8.
Huawei set to ship Ascend 910D AI chip, challenging Nvidia amid U.S. export curbs; Nvidia responds with $500B U.S. AI infrastructure investment9.
Visa and Mastercard launch pilot programs for AI agent-driven payments, partnering with major AI and fintech players to enable autonomous commerce12.
Delaware amends DGCL (SB 21), enhancing protections for interested directors and controlling stockholders, and narrowing shareholder inspection rights14.
21Shares files for first spot Sui ETF with the SEC, as institutional interest in altcoin/blockchain exposure grows15.
U.S. House and Senate move to roll back California EV/truck rules and Biden appliance standards, signaling regulatory pushback on climate/clean tech policies11.
Google and Apple in talks to integrate Gemini AI into Siri, with a potential mid-2025 deal to be announced at WWDC, aiming to close Apple ’s AI gap13.

Market Commentary

Today’s news cycle underscores a shifting macro and regulatory environment that will shape both early-stage and growth-stage venture activity. The Senate’s failure to overturn Trump’s sweeping 10% tariffs cements a more protectionist trade regime, likely increasing costs for U.S. startups reliant on global supply chains or hardware imports1. This could compress margins and slow growth for hardware, AI, and climate tech ventures, while also incentivizing domestic manufacturing and supply chain innovation—a potential tailwind for U.S.-focused industrial and logistics startups.

The Dream Games exit at a $5B valuation is a bright spot for VCs, demonstrating that significant liquidity events remain achievable for global consumer tech even as public markets remain selective2. Full exits for early backers like Index Ventures and Balderton signal strong secondary appetite and set a high-water mark for gaming sector valuations. Meanwhile, the contrasting biotech M&A—SpringWorks’ premium buyout versus Kronos Bio’s near-wipeout—highlights ongoing volatility and the importance of differentiated pipelines and regulatory clarity in healthcare investing6.

Crypto and digital assets are seeing renewed institutional momentum: Galaxy Digital’s imminent Nasdaq listing4, Morgan Stanley’s plans to open crypto trading to millions of E*Trade clients7, and the SEC-facing spot Sui ETF filing all point to deepening mainstream adoption15. However, regulatory risk remains acute, as seen in Coinbase’s Supreme Court challenge to IRS data collection and the competitive jockeying between Ripple and Circle3 10. VCs should expect continued deal flow in crypto infrastructure, compliance, and consumer-facing platforms, but with heightened diligence around regulatory trajectories.

The AI and payments landscape is rapidly evolving. Visa and Mastercard ’s AI agent commerce pilots12, coupled with Google-Apple Gemini AI integration talks13, are accelerating the convergence of fintech and generative AI. This opens new white space for startups building agentic commerce, secure digital identity, and embedded finance solutions. At the same time, Apple ’s legal setbacks on App Store practices may finally unlock distribution for third-party payment and app innovation, a boon for mobile-first fintech and SaaS startups8.

Finally, regulatory developments—from Delaware’s DGCL amendments to U.S. rollbacks of climate rules—highlight a complex legal backdrop. The new DGCL safe harbors may ease exit structuring and reduce litigation risk for Delaware-incorporated startups14, while federal pushback on state-level climate policies could chill investment in certain clean tech verticals but create arbitrage opportunities for nimble founders11.

VC investors should closely monitor: the impact of tariffs on portfolio company cost structures, the pace of AI/crypto adoption in financial services, the evolving regulatory perimeter for digital assets and app distribution, and the shifting M&A landscape in both healthcare and consumer tech. Expect deal terms, valuations, and exit timelines to remain highly sensitive to macro and policy signals in the coming quarters.