But you already knew that—one of the key narratives in the venture capital marketplace from the first day that I started covering the space, is that not only are VCs raising more capital, as billion dollar funds become dime-a-dozen, but that there are more VCs. (My favorite ZIRP era statistic to this end: According to the National Venture Capital Association, in 2019, there were about 1,900 venture capital firms. By early 2024, that number had ballooned to 3,417.)

It follows then, that assets under management in VC would also be growing: According to PitchBook, VC AUM in North America doubled between 2019 and 2024, and is projected to grow about 38% over the next five years. The picture is actually a bit more complicated than it might seem, according to Kyle Stanford, PitchBook director of research for US venture. Stanford pointed out via email that current VC AUM is actually flat as compared to 2021—the year VC AUM grew from $850 billion to $1.31 trillion—and since then, the market has been resetting after warping through the flood of capital and sky-high valuations.

“The past four years have almost been a ‘catch-up’ phase for North American VC,” Stanford said. “What ultimately drives AUM growth again is going to be the ability for companies to realize the value the market has placed on startups. That seems easy to say, but we know that liquidity and returns will expand the interest of LPs and again put up more money for VC. Unicorns are aging, and so are many funds holding onto companies in hopes that they produce that fund-defining exit.”

The numbers break down like so: PitchBook estimates that VC AUM in North America will increase from $1.36 trillion at the end of last year to $1.81 trillion in 2029. California, per PitchBook, contains 54% of the VC AUM in North America, while the Mid-Atlantic consists of 20% of current AUM. (Notably, market share in the Mid-Atlantic grew 2.6x from 2019 to 2024.) What will drive growth moving forward—or limit it—is the exit environment, said Stanford. 

“It’s easy to get excited about the exits that have occurred this year,” he wrote. “There have been some strong IPOs, and eight unicorns have exited so far. I’d say I am more cautiously optimistic than others in the market, though. Eight unicorns represent about 1% of the total number of billion-dollar companies, and there isn’t a large pipeline of IPOs building up for immediate listings because market uncertainty is so high. I think that the best-case scenario in the current environment is that we see an increase in companies registering for public offerings in Q4, with Q1 listings beginning to drive a liquidity surge.”

There’s an argument here that AUM shouldn’t matter—that VC isn’t an AUM game, but a returns game, which I personally think is true. That being said, AUM is an interesting indicator in that it suggests the ways in which venture capital has ultimately become mainstream. 

“Every large bank and institutional investor is adding alternative investments to their portfolio and offering them to clients,” said Stanford. “A growing AUM is probably the lagging indicator of a strong market that is generating the returns to sustain an increase in cash flowing into the strategy. A market with a growing AUM is going to be generating returns for investors, which will subsequently provide the cash for new deals, benefiting new startups and entrepreneurs. A growing AUM is better for the entire ecosystem.”

Windsurfing… I broke the news on Friday that Windsurf was stepping away from the OpenAI deal—vaulting into Google’s arms in a $2.4 billion acquihire that stirred quite a bit of social media discourse about what it means to treat employees fairly. The saga took another stunning turn today, as AI startup Cognition, led by Scott Wu, swept in to buy Windsurf’s remaining assets for undisclosed terms.  

See you tomorrow,

Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
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Venture Deals

- Island, a Dallas-based enterprise workspace and application delivery platform, raised $250 million in previously announced Series E funding. Coatue Management led the round and was joined by J.P. Morgan Growth Equity Partners. 

- Moonvalley, a Toronto-based AI research company, raised $84 million in additional funding. General Catalyst led the round and was joined by Creative Artists Agency (CAA), AI Cloud CoreWeave, Comcast Ventures, and existing investors Khosla Ventures and YCombinator. 

- CertifID, an Austin-based wire fraud protection platform for the real estate industry, raised $47.5 million in Series C funding. Centana Growth Partners led the round and was joined by existing investor Arthur Ventures.

- NetBox Labs, a New York City-based commercial steward of open source NetBox, raised $35 million in Series B funding. NGP Capital led the round and was joined by Sorenson Capital, Headline, existing investors Flybridge Capital, Notable Capital, Mango Capital, and more. 

- Amogy, a Brooklyn-based clean tech company building solutions to use ammonia as a fuel, raised $23 million in funding. Korea Development Bank and KDB Silicon Valley led the round and were joined by BonAngels Venture Partners, Pathway Investment and JB Investment. 

- Datavations, a New York City-based intelligence provider for the building materials and home improvement industries, raised $17 million in Series A funding. Forestay Capital led the round and was joined by Morpheus Ventures, existing investors Sage Venture Partners, Nevcaut Ventures, and others. 

- Murphy, a Barcelona-based AI-native platform for debt servicing, raised $15 million in seed funding. Northzone led the round and was joined by ElevenLabs, Lakestar, Seedcamp, and others. 

- Zip Security, a New York City-based security, compliance, and IT automation company, raised $13.5 million in Series A funding. Ballistic Ventures led the round and was joined by Silver Buckshot, Mantis VC, and existing investors General Catalyst, Human Capital and Box Group. 

- Cogent Security, a San Francisco-based AI taskforce for vulnerability management within in-house security, raised $11 million in funding. Greylock Partners led the round and was joined by Lockstep and others. 

- Collate, a Saratoga, California-based AI-platform to organize data, improve quality, and automate governance, raised $10 million in Series A funding. Venrock led the round and was joined by Unusual Ventures and Karman Ventures.

- Duranta, a Seattle-based software platform for landscapers and lawn care professionals, raised $7 million in seed funding. Base10 Partners, Pear, Coalition Operators and Sunshine Lake led the round. 

- ProductNow, a Palo-Alto based AI-native operating system for product teams, raised $6 million in seed funding. Sierra Ventures led the round and was joined by Parameter Ventures. 

- Juno, a corporate travel operations and expense management platform, raised $4 million in seed funding. Avid Ventures led the round and was joined by Matchstick Ventures and existing investors Madrona Ventures and Bungalow Capital.

- Asepha, a Toronto-based startup leveraging AI agents for pharmacy automation, raised $4 million in seed funding. Glasswing Ventures and Core Innovation Capital led the round and were joined by Panache, RedBud, MGV, and others. 

- Bidbus, a Los Angeles-based pre-owned car marketplace, raised $3.3 in seed funding. Mucker Capital led the round. 

- Trupeer, a Bengaluru, India-based AI video platform for software and business workflows, raised $3 million in seed funding. RTP Global led the round and was joined by Salesforce Ventures and others. 

Exits

- Mutares agreed to acquire Fuentes, a Murcia, Spain-based food transportation company, from Lineage Group. Financial terms were not disclosed. 

FUNDS + FUNDS OF FUNDS

- Stone Point Capital, a Greenwich, Connecticut-based private equity firm, raised $11.5 billion for its tenth fund focused on owner-operators in and around the global financial services industry.

PEOPLE

- Rainier Partners, a Seattle-based private equity firm investing in lower middle-market services businesses, promoted Henry Anderson and Luke Bench to principal.