Dmitrii Khasanov: 2025 Growth Drivers for Venture Capital in an Era of Macroeconomic Instability

When it comes to venture investments in an unpredictable global economy, the most valuable insights often come from experienced practitioners who have faced both challenges and successes firsthand. Today, Dmitrii Khasanov, investor and founder of the Arrow Star investment fund, shares his perspective on how the market has evolved after the downturns of 2023 and 2024—and which sectors may emerge as the next big growth drivers.

“To understand what lies ahead, we need to look at what data leaders are saying about the past. It’s no secret that 2024 was a tough year for the industry—venture capital saw a noticeable decline, hitting its lowest point in six years. To understand more, I refer to the findings published by Venture Capital Journal,” states Dmitrii Khasanov.

A Year of Contraction

According to exclusive data from Venture Capital Journal, global venture funds raised $104.7 billion across 865 funds in 2024—a sharp decline from $128 billion raised by 1,029 funds in 2023. This marks an 18% drop in total capital raised and a 16% reduction in the number of funds, reflecting how difficult it has been for fund managers to attract new capital. Many previous funds struggled to generate sufficient exits for their limited partners, making fresh fundraising more challenging.

This trend isn’t limited to venture capital. The private equity (PE) market also faced funding difficulties. According to Private Equity International (PEI), PE funds—including buyout, growth, and venture strategies—raised $746.48 billion in 2024, down 18% from the $911.85 billion raised in 2023. This marks the lowest total in the last four years, just slightly above the pandemic-era figures.

However, one surprising trend emerged: the average size of funds hit a record high of $155.1 million in 2024, up from $141.5 million in 2023 and surpassing $154.8 million in 2022. This suggests that fund managers are shifting their strategy—focusing on larger rounds and attracting more stable, long-term partners rather than chasing a higher volume of smaller investments.

Dmitrii Khasanov thinks that the biggest challenges in 2024 stemmed from prolonged liquidity constraints and the overvaluation of assets in previous years. Many fund managers struggled to close new rounds because LPs weren’t seeing sufficient returns from past funds, limiting their ability to reinvest. When returns aren’t backed by timely exits, investor confidence declines, creating a chain reaction where new funds become harder to launch, and startups receive less capital at critical growth stages. A more measured approach to valuation assessments and enhanced cost management probably might have helped ease this situation, enabling both funds and startups to navigate the downturn more smoothly.

Sectors Poised for Growth in 2025

Despite the challenges of the past year, industry sentiment began to shift by the end of 2024, with moderate optimism returning to the market. This change was largely driven by the fact that the most resilient startups successfully adapted and demonstrated solid growth. As Dmitrii Khasanov says, LPs are once again showing willingness to invest in new funds, recognizing that “the downturn in 2024 was more a correction of previous market excesses than a reason to abandon venture strategies altogether.”

Some institutional investors have already allocated additional budgets for projects that proved their viability under last year’s stress test. At the same time, they are increasingly looking at earlier-stage investments, hoping to secure more attractive entry points into high-potential companies.

As the venture market recovers, the key question is: which sectors hold the most potential for growth? Some of the most promising areas include:

1. Automation and Artificial Intelligence are among the key areas of interest for investors, especially as modern generative models and automation tools continue to influence industries by optimizing routine tasks and reducing reliance on manual labor.

2. Climate-oriented policies and business sustainability goals are pushing money in clean energy, carbon capture, and resource-efficient technologies. With both government incentives and corporate buy-in, ESG-based innovations are gaining strong presence.

The Role of Venture Capital

When the global economic environment is uncertain, venture investors must be especially adaptable and open to unconventional strategies. History shows that some of the most groundbreaking companies emerge during downturns—when limited access to “easy money” forces founders to focus on real product value and rigorously test their business models from day one.

At the same time, experienced Limited Partners (aka LPs) and fund managers are shifting towards more balanced portfolios, carefully assessing risks across sectors and regions. Their goal is not simply to chase the latest hype but to identify teams that can withstand several years of market turbulence and successfully scale to the next funding rounds. This more thoughtful and strategic approach may help investors steer clear of overinflated valuations while supporting entrepreneurs who focus on building and growing a sustainable business, rather than relying only on compelling narratives to raise capital.

If macroeconomic conditions remain stable, 2025 could mark a turning point. Strategic and institutional investors will once again seek out breakthrough technologies and business models capable of weathering economic turbulence.

“Venture capital thrives on cycles,” notes Dmitrii Khasanov. “Those who can recognize where the next wave of innovation will emerge—and invest wisely—will be the ones who define the next decade of success stories.”