Private bio/pharma funding in 2025 totaled approximately $40.0 B across 1,045 private funding events, slightly below 2024’s $40.4 B, but substantially below 2024’s 1,367 deals (FN1). Activity was heavily front-loaded, with January 2025 alone accounting for $6.3 B and 138 deals, the single most active month of the year. 

After a mid-year lull in deal volume and capital deployment, the market saw modest late-year momentum, particularly in October ($6.0 B) and December ($3.8 B). Early-stage funding remained a central pillar of investment activity, with ~$9.6 B raised across 363 early-stage deals in 2025, but down 10-20% from 2024 (~$11.9 B across 445 deals in 2024). We think that the biotech private funding is going to make a strong recovery in 2026 (“Why 2026 Could be a Breakout Year for Private Biotech Funding”).

In addition to traditional private financings, 176 grant events were recorded in 2025, with grant activity increasing through mid-year and remaining elevated into Q4, highlighting the continued importance of non-dilutive capital in a constrained funding environment.

Read our H1 2025 Bio/Pharma Funding Trends Report.

Quarterly Funding Overview: 2025 vs 2024

Quarterly funding trends in 2025 diverged sharply from 2024. Q1 2025 private biotech funding increased by ~+47% YoY ($12.0B vs. ~$8.2B), driven by an exceptionally strong January, while Q2 fell by ~–30% YoY ($7.7B vs. ~$10.9B). Q3 funding declined more modestly (–9% YoY), and Q4 finished nearly flat year-over-year (–1%), as private funding activity picked up again in Q4 2025 as it did in Q4 2024. Overall, 2025 was more front-loaded and more volatile from a quarterly perspective than 2024.

Private Funding Activity Softened After a Strong Start

Private funding event activity in 2025 softened vs. 2024, reflecting a more selective investment environment (Fig 1).

• 2025 saw 1,045 total private financing events, compared with 1,367 in 2024.

• January 2025 was the busiest month by deal count (138), followed by relatively stable early-Q2 activity.

• Deal volumes dipped in mid-year, with June (69), July (70), and August (64) among the quieter months.

• A late-year rebound occurred with 118 deals in October and 102 in December, helping cushion the annual totals.

This pattern highlights a strong desire to deploy capital early in the year, followed by a pullback and selective recommitment in Q4.

While overall deal counts declined versus 2024, grant financings represented a growing share of activity, peaking at 50 grant events in Q3, even as private venture rounds slowed during the summer months.

Fig 1. Monthly funding events by Private Companies (2024 - 2025)

Total Private Funding Dollars: Mid-Year Declines, Q4 Strength

2025 private funding amounts followed a front-loaded curve with measurable volatility:

• The year opened with $6.27 B in January, the largest monthly total.

• February through August saw diminished capital flows, with June ($1.93 B) and July ($2.08 B) among the softest months.

• October ($6.01 B) and December ($3.77 B) helped drive a late-year uplift, mitigating some mid-year softness.

Overall, 2025 private funding ($39.99 B) was marginally below 2024 ($40.41 B), reinforcing persistent capital discipline in the sector (Fig 2).

Fig 2. Monthly funding amounts by Private Companies (2024 - 2025)

Early-Stage Funding: Core to Investor Interest

Early-stage companies continued to attract a large share of total funding, though totals were below 2024 levels (Fig 3):

• Early-stage funding in 2025 reached ~$9.60 B, compared with ~$11.86 B in 2024.

• The strongest early-stage month in 2025 was January ($2.03 B), which tracked with broader funding patterns.

• Mid-year months (June–August) were comparatively weak, with August (~$211 M) the lowest early-stage amount.

• A bounce in late 2025 — particularly October (~$1.11 B) and December (~$904 M) — suggested renewed targeting of early innovation.

While annual early-stage totals lagged in 2024, the continued steady flow of early deals underscores sustained interest in biotech startups.

Fig 3. Private early-stage funding activities: Number of deals & total amounts per month (2024 - 2025)

The early-stage deal count trend reflected broader funding dynamics:

• 363 early-stage deals completed in 2025, compared with 445 in 2024.

• January again led the year with 60 early-stage financings.

• Deal counts receded through mid-year, with the slowest month in August (11).

• October (38) and December (34) helped drive a Q4 uptick.

This pattern highlights investor selectivity, particularly through the summer, with resurgent early-stage interest by year’s end (Fig 3).

Public Market Sentiment

Public biotech markets strengthened meaningfully over the course of 2025, reflecting a steady improvement in investor sentiment following a volatile 2024.

The XBI index opened 2025 at 91.53 and closed the year at 121.93, representing a ~33.2% full-year gain and marking its strongest annual performance since 2021. Momentum was particularly notable in the second half of the year, as risk appetite improved for small- and mid-cap biotech names.

The IBB index also posted solid gains, rising from 132.91 at the start of 2025 to 168.77 by year-end, a ~27.0% increase. While the magnitude of gains trailed XBI, the upward trend signaled improving confidence across large-cap and commercial-stage biotech companies.

The sustained recovery in public biotech equities throughout 2025 provided a more supportive macro backdrop for private financing, particularly in Q4. This improving sentiment likely contributed to the late-year rebound in private funding activity and could create favorable conditions for larger equity rounds and renewed IPO interest heading into 2026 (“Why 2026 Could be a Breakout Year for Private Biotech Funding”).

Concluding Remarks

Overall, 2025 reflected a selective and uneven generally down year in private bio/pharma funding. While total private capital deployed remained slightly below 2024 levels, activity was much lower than 2024 but rebounded in Q4 following a mid-year slowdown. Early-stage bio/pharma investment and grant funding continued, but early-stage activity was down with similar trends to overall funding activity. With public biotech markets strengthening through the year, the funding environment exiting 2025 appeared more supportive than it entered, setting a firmer foundation for 2026. In fact, we are bullish on biotech private funding as we move through 2026 (“Why 2026 Could be a Breakout Year for Private Biotech Funding”).

FN1: Data Source: BiopharmIQ

Explore BiopharmIQ Funding Activity Dataset!

Article History:

10/20/25 MD, RF, EJV

Not legal, investing, or tax advice.