Presented by CIBC Innovation Banking
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Technological innovation has hinged on science and research funded by the U.S. government. That’s all at risk right now May 7, 2025 |
From NASA to the Consumer Financial Protection Bureau, Trump’s reform agenda has thrown numerous federal agencies under the microscope and brought the threat of steep budget cuts or, in the worst cases, attempted dismantling. But within the startup and venture capital sector, the fate of one agency in particular—the National Science Foundation—is causing alarm after DOGE turned its attention to it a few weeks ago.
On Friday, the Office of Management and Budget proposed slashing roughly 57% of the NSF’s budget, cutting it from about $9 billion down to $3.9 billion. Shortly before that, on April 24, the director of NSF—a Trump pick during his first term—resigned, and NSF staffers received memos encouraging them to consider deferred resignation and early retirement programs, and notifying them that NSF would no longer process supplements to any existing grant awards for the remainder of this fiscal year.
“We are taking this step to ensure alignment with NSF priorities…And to prepare for an uncertain NSF budget future,” read one of the memos seen by Fortune, while another memo warned of “significant workforce reductions,” and encouraged staffers to consider early retirement or deferred resignation.
NSF is considered to be a cornerstone of U.S. research and tech leadership. The billions of dollars it funds each year for research in areas like AI, quantum, and mathematics has led to breakthroughs in everything from semiconductors to digital assistants to magnetic resonance imaging. And it’s an important part of the public-private partnerships that have buoyed America’s tech sector over the years. NSF Engines, one of NSF’s newest programs that’s focused on semiconductors, advanced manufacturing, and biotechnology research, has invested $150 million in funding across 10 different regions and stirred up more than $1 billion in subsequent investments from venture capitalists, nonprofits, and state and local governments, the agency has said.
Adam Hammer, who is the CEO of Roadrunner Venture Studios, a startup studio that helps scientists and researchers spin their work out of national or university labs and into companies, described these NSF programs as playing an “indispensable role” in complementing private investment and a “key mechanism that helps de-risk early-stage technologies for private investors.”
“Sustaining them is vital if we want U.S. innovation to keep pace with national competitors who continue to invest heavily across both basic research and commercialization,” he told Fortune in an email, noting that there has been a “broader, cumulative trend of underinvestment in the translation of research into companies.”
The administration’s efforts to downsize the NSF are especially puzzling to some within the tech industry, given that President Trump has emphasized technological innovation—particularly in AI, quantum, and space exploration—as a priority. Just a few weeks ago, Michael Kratsios, a Peter Thiel protege and Trump-appointed director of the Office of Science and Technology Policy, emphasized the importance of public-private partnerships in igniting American innovation.
The stakes feel high for anyone who sits close to the NSF, including those who have recently left it. In his resignation note to staff, former NSF director Sethuraman Panchanathan wrote of the significant role the agency has played over the years and its stature as the “envy of the world.” This a “pivotal moment for our nation in terms of global competitiveness,” he warned.
Morale is in “bad shape. It’s very low—heartbreakingly low. People are scared,” says a current employee at the NSF, who spoke on condition of anonymity because they were not authorized to speak on behalf of the agency. Staffers are wondering whether they will have a job and whether the careers of the students and researchers they have been trying to support might end, the person said.
Since an internal review process began around February—scanning for grants focused on Trump-abhorred topics like diversity, equity, and inclusion—funding has been cut to more than 1,300 NSF grants, according to a tally maintained by Grant Watch, a project tracking grant cuts from scientific agencies that have happened under the Trump Administration.
Congress will still have to approve any budget cuts to the agency, which is currently being overseen by its chief of staff until President Trump appoints a new director. NSF and DOGE could not immediately be reached for comment.
Despite all the uncertainty and turmoil at the NSF, there’s still an underlying thread of commitment to the stated mission: to promote the progress of science, advance the national health, prosperity and welfare, and secure the national defense.
“As long as I am able to be here, and NSF is able to keep me employed—as long as I don’t feel pulled in another direction—I’m not going to walk away,” the employee said.
See you tomorrow,
Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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Nina Ajemian curated the deals section of today’s newsletter.
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VENTURE DEALS
- Wonder, a New York City-based food hall and delivery company, raised $600 million in funding. NEA led the round and was joined by existing investors Accel, GV, Forerunner Ventures, and Amex Ventures.
- Quantum Systems, a Gilching, Germany-based AI-powered defense and emergency services aerial intelligence systems developer, raised €160 million ($181.5 million) in Series C funding. Balderton Capital led the round and was joined by Hensoldt, Airbus Defence and Space, Bullhound Capital, LP&E, and existing investors HV Capital, Project A, Peter Thiel, and others.
- Parloa, a Berlin-based AI agent management platform, raised $120 million in Series C funding, bringing the company’s valuation to $1 billion. Durable Capital Partners, Altimeter Capital, and General Catalyst led the round and were joined by EQT Ventures, RPT Capital, Senovo, and Mosaic Ventures.
- Unrivaled Sports, a New York City-based youth sports experiences company, raised $120 million in funding. DICK'S Sporting Goods led the round and was joined by Dynasty Equity, LionTree, Miller Sports & Entertainment, and existing investor The Chernin Group.
- Orca AI, a London-based shipping operations platform, raised $72.5 million in Series B funding. Brighton Park Capital led the round and was joined by existing investors Ankona Capital and Hyperlink Ventures.
- TSOLife, a Tampa-based senior living insights platform, raised $43 million in Series B funding from PeakSpan Capital.
- Recraft, a London-based generative AI design platform for businesses, raised $30 million in Series B funding. Accel led the round and was joined by Madrona Ventures and existing investors Khosla Ventures, Nat Friedman, Elad Gil, and RTP Global.
- Blinq, a Melbourne-based digital business card platform, raised $25 million in Series A funding. Touring Capital led the round and was joined by HubSpot Ventures and existing investors Blackbird Ventures and Square Peg Capital.
- AppSignal, an Amsterdam and Austin-based application performance monitoring solutions provider, raised $22 million in Series A funding from Elsewhere Partners.
- StackOne, a London-based enterprise AI agents and SaaS integrations platform, raised $20 million in Series A funding. GV led the round and was joined by Workday Ventures, XTX Ventures, existing investors Episode 1 and Playfair, and angel investors.
- Kintsugi AI, a San Francisco-based tax automation platform, raised $18 million in funding from Vertex and existing investors.
- StackAI, a San Francisco-based enterprise AI agents developer, raised $16 million in funding from Lobby VC, LifeX Ventures, Guillermo Rauch, Bob Van Luijt, existing investors Gradient, Y Combinator, Epakon Capital, angel investors, and others.
- Onebeat, a Lewes, Del. and Ramat Gan, Israel-based retail inventory optimization platform, raised $15 million in funding. Schooner Capital led the round and was joined by Magenta Venture Partners, Surround Ventures, AnD Ventures, and others.
- RightRev, a Roseville, Calif.-based automated revenue management platform, raised $13 million in Series A funding. Cheyenne Ventures and Innovius Capital led the round and were joined by existing investors Norwest Venture Partners, Salesforce Ventures, and Snowflake Ventures.
- Duna, an Amsterdam-based business identity platform, raised €10.7 million ($12.1 million) in seed funding. Index Ventures led the round and was joined by others.
- Row Zero, a Seattle-based cloud-based spreadsheet company, raised $10 million in seed funding. IA Ventures led the round and was joined by Trilogy Equity Partners, Founder's Co-op, Ludlow Ventures, and others.
- Alphabiome, a Tel Aviv-based AI-powered microbiome intelligence technology developer company, raised $8 million in seed funding. AIX Ventures and New Era Capital Partners led the round and were joined by others.
- Trilobio, a San Francisco-based lab hardware and software provider for biologists, raised $8 million in seed funding. Initialized Capital led the round and was joined by Argon Ventures and Lowercarbon Capital.
- FirmPilot, a Miami-based AI marketing solutions for law firms, raised $4.7 million in funding from Thomson Reuters Ventures and HubSpot Ventures.
- CNaught, a San Francisco-based carbon credit platform, raised $4.5 million in seed funding. Bow Capital led the round and was joined by FJ Labs, Silence VC, Karman Ventures, and Marketplace Capital.
- Trust & Will, a San Diego-based digital estate planning company, raised $4.5 million in funding from Curql.
- Alta Resource Technologies, a Boulder-based mining technology developer, raised $4.4 million in a seed extension. DCVC and Voyager Ventures led the round and were joined by Orion Industrial Ventures and In-Q-Tel.
- CodeAnt AI, a San Francisco-based AI-powered code review platform, raised $2 million in seed funding. Y Combinator, Brian Shin, and Uncorrelated Ventures led the round and were joined by DeVC, Transpose Platform, Entrepreneur First, and angel investors.
PRIVATE EQUITY
- All Star Healthcare Solutions, backed by Knox Lane, acquired Integrity Locums, an Englewood, Colo.-based locum tenens staffing firm. Financial terms were not disclosed.
- Greater Sum Ventures acquired a majority stake in MyVenue, an Adelaide, Australia-based event venue point-of-sale technology provider. Financial terms were not disclosed.
- Lubrication Engineers, a portfolio company of Aurora Capital Partners, acquired RSC Bio Solutions, a Charlotte-based industrial lubricants company. Financial terms were not disclosed.
- MGT, backed by The Vistria Group, acquired Ednetics, a tkPost Falls, Idaho-based education and government technology provider. Financial terms were not disclosed.
- Riverwood Capital acquired Quicklizard, a Tel Aviv-based AI-powered price optimization platform. Financial terms were not disclosed.
- Shenandoah, a portfolio company of GenNx360 Capital Partners, acquired Pro-Pipe Services, an Irvine, Calif.-based wastewater infrastructure services provider, from National Underground Group. Financial terms were not disclosed.
- Wall Works, backed by AVALT and VantEdge, acquired Optimum Building Systems, a Litchfield, N.H.-based drywall, acoustic ceiling tile, and other services provider. Financial terms were not disclosed.
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OTHER
- DoorDash agreed to acquire Deliveroo, a London-based food delivery service, at an enterprise value of approximately £2.9 billion ($3.9 billion).
- TPG and Corpay agreed to acquire AvidXchange, a Charlotte-based accounts payable automation software provider, in a cash transaction that values the company at $2.2 billion.
- DoorDash agreed to acquire SevenRooms, a New York City-based CRM, marketing, and operations platform for restaurants, for approximately $1.2 billion in cash.
- IntoTheBlock, a Miami-based institutional DeFi solutions provider, merged with Trident Digital, a London-based digital asset management services provider, to form Sentora, a Road Town, British Virgin Islands-based DeFi platform. Sentora raised $25 million in Series A funding. New Form Capital led the round and was joined by Joint Effects, Tribe Capital, Ripple, and others.
- Blue Yonder acquired Pledge Earth Technologies, a London-based emissions management platform. Financial terms were not disclosed.
- Hundred Health acquired BellSant, a Washington D.C.-based longevity platform. Financial terms were not disclosed.
- Innovative Lab Services acquired Compco Analytical, a Little Ferry, N.J.-based analytical equipment services provider for labs. Financial terms were not disclosed.
- Weave agreed to acquire
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