Tiger Global Management and SoftBank Vision Fund slashed their large-deal activity by more than 95% between 2021 and 2025, ceding mega-round leadership back to traditional venture capital firms. Crunchbase data shows just 1,440 companies raised rounds of $50 million or more in 2025, roughly half the 2021 cohort.
The dramatic pullback by crossover investors has restructured dealmaking dynamics. Venture capital firms now dominate large financing rounds as private equity players, overindexed in private companies during the 2021 boom, scale back significantly. Established VCs are leveraging AI-wave momentum to deploy capital at elevated valuations, filling the void left by retreating mega-investors.
Tiger Global and SoftBank's withdrawal marks a reversal from their 2021 peak, when rapid deployment strategies pushed valuations to unprecedented levels. The firms' near-total exit from mega-rounds reflects broader caution about stretched exit timelines and uncertain return prospects for highly-valued private companies.
The current market raises fundamental questions about returns. Crunchbase notes: "Will this new cohort of highly valued companies deliver outsized returns in the coming years?" Extended holding periods and persistent IPO market challenges complicate exit scenarios for investors backing companies at premium prices.
Institutional allocators are adjusting strategies accordingly. Makena Capital, managing over $10 billion, exemplifies the hedge-oriented approach emerging among limited partners. The firm's exposure to Stripe serves as a portfolio hedge against Visa, since Stripe could potentially use crypto rails to disrupt Visa's payment network, according to Makena's Lara Banks.
The shift toward VC-led dealmaking coincides with AI sector concentration. Venture firms with domain expertise and longer investment horizons are positioning themselves as preferred partners for AI-focused startups, displacing the spray-and-pray strategies that characterized 2021's frothy market.
Market observers note the sustainability of current valuations remains uncertain. The halving of mega-round volume since 2021 suggests disciplined capital deployment, but pricing in AI deals continues to test historical benchmarks. Whether 2025's cohort generates returns matching their valuations will determine if venture capital's resurgence represents structural improvement or another cycle peak.