With 2024 coming to a close, investors may be wondering what the next 2025 trend could be. Which industries should investors keep an eye on as the year begins? 2024 witnessed the advancement and growth of artificial intelligence, clean energy, electric vehicles, and more, but what could be the highlights of next year?

2025 Trends and Industries

Debt Financing

With the Federal Reserve cutting interest rates by 50 basis points in September[1] and another 25 basis points in November[2], it’s possible that private credit could ramp up in 2025 as interest rates are expected to continue gradually decreasing.[3] Private credit saw a decrease in deal volume in 2024 after a slight increase in 2023[4], and venture debt decreased over the course of the year as well.[5] As interest rates cool, debt financing is a potential 2025 trend to keep an eye on.

Initial Public Offerings

While the last couple of years have seen a frigid Initial Public Offering (IPO) market, Nasdaq’s CEO Adena Friedman expects that IPOs will regain momentum through 2025.[6] 2024 saw certain companies finally make their move, including MicroVentures portfolio companies Reddit and Rubrik, while other companies are updating or submitting filings as they wait for markets to improve. Cerebras, ServiceTitan, and Turo are MicroVentures portfolio companies that have filed for an IPO when the timing is right.

2025 Industries to Watch

Artificial Intelligence

If 2023 was the year of artificial intelligence (AI) hype, 2024 is the year of AI maturation. The accomplishments “biggest”, “fastest”, and “most advanced” seemed to bounce from company to company. Cerebras, Groq, SambaNova, OpenAI, Anthropic, and xAI all reported one of these titles at one point or another through the year. The rapid development of supercomputers, large language models (LLMs), inference processors, and semiconductors all contributed to the “great AI race”.

With ChatGPT, Claude, Gemini, Copilot, and Grok all fighting for first place in AI chatbots and many other companies seeking to take the lead on AI hardware, 2025 could be the year we see a clear winner emerge in the great AI race. While artificial general intelligence (AGI) still hasn’t been achieved, will 2025 be the year that we see AI having capabilities that rival humans?

Quantum Computing

Similar to the technological advancements for artificial intelligence, quantum computing is another industry that positioned itself for growth in 2025. Promising to solve complex problems beyond the capabilities of today’s computers, quantum computing made several breakthroughs in 2024. From increased qubit stability and error correction to commercial quantum cloud services, quantum computing is becoming more accessible. For example,Defense Tech

With geopolitical tensions, defense tech is another industry to keep an eye on in 2025. The U.S. has an $850 billion proposed defense budget for next year while aiming to leverage cutting-edge technologies and fostering relationships between public and private contractors. This could mean private market investment opportunities in defense tech companies like Anduril, SpaceX, or Gecko Robotics as they bid to win government contracts.

Cryptocurrency

Bitcoin reached an all time high of $99,655.50 on November 22, 2024[7] after experiencing significant growth in 2024 compared to 2023. It’s likely that as we get into 2025, there could be a renewed interest in backing cryptocurrency startups. From Q1 – Q3 2024, venture capitalists put $8 billion into crypto startups, on track to meet or slightly exceed 2023. Will 2025 see an increased interest for Bitcoin or kickstarted investments?

CleanTech

CleanTech applications like fusion technology made progress in 2024, beginning the transition from basic research to commercial application. As fusion reactors are completed and tested with anticipated 2025 dates, CleanTech is another area for investors to keep an eye on in 2025.

Final Thoughts

There may be many exciting opportunities for private market investors in 2025. Artificial intelligence, quantum computing, defense tech, crypto, and more could be industries to watch based on milestones achieved in 2024. Investors may want to consider keeping an eye on these industries and staying up-to-date on the latest developments.

Are you looking to invest in startups? Sign up for a MicroVentures account to start investing!

Want to learn more about industries investors should keep on an eye on? Check out the following MicroVentures blogs to learn more:

• Beyond the Battlefield: Defense Technology
• The Sky’s The Limit: Drones and Autonomous Vehicles
• The AI Wave: The History and Growth of the Semiconductor Industry
• The Final Frontier: The History and Growth of Space
• The Great AI Race: Understanding the Artificial Intelligence Landscape

 

[1] https://www.cnbc.com/2024/09/18/fed-cuts-rates-september-2024-.html

[2] https://www.cnbc.com/2024/11/07/federal-reserve-cut-interest-rates-what-will-get-cheaper.html

[3] https://www.cnbc.com/2024/11/26/fed-officials-see-interest-rate-cuts-ahead-but-only-gradually-minutes-show-.html

[4] https://www.jtcgroup.com/insights/is-private-credit-poised-for-a-rebound

[5] https://www.capitaladvisors.com/research/debt-market-update-q1-2024

[6] https://www.pymnts.com/news/ipo/2024/nasdaq-ceo-expects-ipos-to-pick-up-steam-in-2025/

[7] https://finance.yahoo.com/quote/BTC-USD/history/?period1=1717357260&period2=1733097600&interval=1d&filter=history&frequency=1d&includeAdjustedClose=true&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAA-7rxBdpPvycbR2ntewx7tMPCGzTUe4r5MV9-RQbmMElIobCeTsx7ev9mY9QXiP3u_ShMOVXMt77pQY6Dcdp4WvF49M-wYkURi5CaeYHUdY5k3R5RzKKvsSiFomzq6sbsxzUFCsPNnryZRkZC-Z6-f2XO4EVADEvnPWFOoREw3b

 

*****

The information presented here is for general informational purposes only and is not intended to be, nor should it be construed or used as, comprehensive offering documentation for any security, investment, tax or legal advice, a recommendation, or an offer to sell, or a solicitation of an offer to buy, an interest, directly or indirectly, in any company. Investing in both early-stage and later-stage companies carries a high degree of risk. A loss of an investor’s entire investment is possible, and no profit may be realized. Investors should be aware that these types of investments are illiquid and should anticipate holding until an exit occurs.