Top Startup and Tech Funding News – August 19, 2025

It’s Tuesday, August 19, 2025, and we’re back with today’s lineup of startup and tech funding news stories spanning the U.S. and beyond. From late-stage billion-dollar AI infrastructure bets to nimble seed rounds pushing the frontier of productivity tools, the day’s deals highlight how investors are doubling down across every layer of the innovation stack.

Funding Highlights

Leading the charge, Databricks is raising $1 billion in a funding round at a $100 billion valuation to launch an AI-native database and agent platform, while Eight Sleep raised $100 million to expand its AI-powered sleep technology worldwide. Nuclear energy also took center stage, with Aalo Atomics closing a $100 million Series B to bring modular microreactors to data centers. Other notable moves included Keychain’s $30 million Series B for CPG supply chains, Firecrawl’s $14.5 million Series A for AI web crawling, and Medallion’s $43 million growth round to streamline U.S. healthcare credentialing. On the early-stage front, Paradigm drew $5 million to launch its AI spreadsheet assistant, and fintech heavyweight Klarna struck a $26 billion financing deal with Nelnet to supercharge U.S. BNPL growth.

Investor Activity

The day saw heavyweight participation from Thrive Capital, Insight Partners, Valor Equity Partners, Wellington Management, Nexus Venture Partners, General Catalyst, and Acrew Capital, alongside strategic names like NRG Energy, Nelnet, and Hitachi Ventures. The spread of capital—from scrappy AI productivity startups to industrial-scale nuclear builds—underscores how investors are positioning for both near-term SaaS adoption and the infrastructure required to sustain AI’s energy and compute demands.

Here’s the full breakdown. Until tomorrow, have a great evening.

Databricks is Raising $1B in Funding at $100B Valuation to Fuel AI Database Ambitions

Databricks, the San Francisco-based data analytics powerhouse, is raising a fresh $1 billion funding round at a massive $100 billion valuation. The oversubscribed round comes just months after Databricks’ record-breaking $10 billion infusion in January, underscoring investors’ conviction in its trajectory. Co-founder and CEO Ali Ghodsi says the new capital is earmarked to attack two major projects: a cutting-edge database for AI agents and an AI agent platform to complement the company’s popular Lakehouse offering.

The round is co-led by Thrive Capital and longtime backer Insight Partners, the same duo that led Databricks’ previous round, and brings Databricks’ total funding to nearly $20 billion to date. While already profitable and in no rush to IPO, Databricks is arming itself with resources to expand into the AI-first database market – a $100+ billion opportunity long dominated by legacy players.

By channeling this new war chest into its AI-native database (dubbed “Lakebase”) and agent platform, Databricks aims to cement its position at the forefront of enterprise AI infrastructure.

Databricks was founded in 2013 by a group of academics and engineers, including CEO Ali Ghodsi and co-founders from UC Berkeley. The company offers a unified platform for data analytics, engineering, and machine learning.

Funding Details:

• Startup: Databricks (California, U.S. – data & AI software)

• Investors: Thrive Capital and Insight Partners (co-leads)

• Amount Raised: $1 billion

• Total Raised: ~$20 billion

• Funding Stage: Late-stage private round

• Funding Date: August 19, 2025

Eight Sleep Raises $100M in Funding to Expand AI-Powered Sleep Tech Platform

Eight Sleep, a New York-based “sleep fitness” startup, announced a $100 million funding round to accelerate its AI-driven sleep technology offerings. Eight Sleep’s smart mattresses and bedding use sensors and machine learning to track sleep patterns and proactively optimize temperature, elevation, and firmness for better rest. The fresh capital – led by HongShan (HSG) – attracted a host of prominent backers, including Valor Equity Partners, Founders Fund, Y Combinator, and even sports figures like F1 driver Charles Leclerc and McLaren Racing CEO Zak Brown.

With this round, Eight Sleep has amassed roughly $260 million in total funding. While the company didn’t disclose the new valuation, insiders note it’s roughly double the $500 million post-money mark from Eight Sleep’s Series C in 2021. The funds will help Eight Sleep expand internationally and develop condition-specific sleep interventions as it pushes toward “sleep tech” unicorn status. Co-founder Alexandra Zatarain says executing the startup’s AI roadmap – including its new Sleep Agent that creates digital twin models for users – will be key to transforming beds into proactive health devices and, eventually, achieving a coveted billion-dollar valuation.

Funding Details:

• Startup: Eight Sleep (New York, U.S. – AI sleep technology)

• Investors: HongShan (lead); Valor Equity Partners; Founders Fund; Y Combinator; notable angels like Charles Leclerc and Zak Brown

• Amount Raised: $100 million

• Total Raised: ~$260 million

• Funding Stage: Series D

• Funding Date: August 19, 2025

Aalo Atomics Lands $100M in Series B Funding for Modular Nuclear Data Center Power

Aalo Atomics, an Austin-based nuclear energy startup, has secured $100 million in Series B financing to advance its novel approach to powering data centers with modular nuclear reactors. Aalo is developing small “microreactors” inspired by a design from the Idaho National Lab’s Marvel project. The company plans to fire up its first 50 MW reactor, paired with an experimental data center on-site, by summer 2026 at the Idaho lab campus.

The round was led by Valor Equity Partners, with participation from a broad syndicate of investors ranging from deep-tech VCs to strategics in energy and real estate. Participants include 50 Years, Alumni Ventures, Fine Structure Ventures (affiliated with Fidelity), Hitachi Ventures, NRG Energy, and more.

This brings Aalo’s total funding to about $136 million so far. Armed with fresh capital, Aalo aims to validate its mini-reactor design and then replicate it at scale – envisioning thousands of five-reactor “Aalo Pod” power plants that could deliver carbon-free electricity at a target cost of just 3 cents per kWh. It’s an ambitious bet to meet the surging energy demands of AI and cloud computing with next-gen nuclear tech.

Funding Details:

• Startup: Aalo Atomics (Texas, U.S. – modular nuclear reactors for data centers)

• Investors: Valor Equity Partners (lead); 50Y; Alumni Ventures; Fine Structure Ventures; Hitachi Ventures; NRG Energy; and others

• Amount Raised: $100 million

• Total Raised: $136 millionaalo.com

• Funding Stage: Series B

• Funding Date: August 19, 2025

Keychain Snags $30M in Series B Funding to Scale its CPG Supply Chain Platform

Keychain, a New York-based startup helping consumer packaged goods brands find and manage manufacturing partners, raised $30 million in a Series B round to double down on growth. Founded in 2023 by Oisin Hanrahan and Umang Dua (previously of Handy), Keychain operates a marketplace that connects top retailers and CPG brands with vetted third-party manufacturers. Uniquely, the company built its core product and engineering team in Gurugram, India, leveraging that tech talent to serve North American clients.

With the new funding, Keychain plans to expand its India-based R&D team from 35 to about 100 over the next year while also expanding its platform into Europe. The Series B was led by Wellington Management with participation from existing investor BoxGroup and others. It brings Keychain’s total funding to $68 million to date.

Keychain’s software (offered free to brands, with manufacturers paying a subscription) is already used by 8 of the top 10 U.S. retailers – including 7-Eleven and Whole Foods – and dozens of major brands to source manufacturing partners. By bolstering its tech platform and team, Keychain aims to streamline global supply chains and meet growing demand from CPG clients.

Funding Details:

• Startup: Keychain (New York, U.S. – CPG manufacturing marketplace)

• Investors: Wellington Management (lead); BoxGroup; and other existing backers

• Amount Raised: $30 million

• Total Raised: $68 million

• Funding Stage: Series B

• Funding Date: August 19, 2025

Firecrawl Fetches $14.5M in Series A Funding for AI Web Crawling Platform

Firecrawl, an AI-powered web crawler startup, has raised $14.5 million in a Series A round led by Nexus Venture Partners. The San Francisco company offers a wildly popular open-source web crawling tool that’s used by over 350,000 developers and has notched nearly 50,000 stars on GitHub. Firecrawl’s technology allows developers – and even autonomous AI agents – to index and navigate the web via API, enabling use cases from enterprise search to automated research. Notably, the startup counts Shopify, Replit, and Zapier among its customers, and even claims to be profitable already.

The funding announcement came with a fun anecdote: CEO Caleb Peffer literally fell off his chair in excitement when Nexus partner Abhishek Sharma agreed to lead the round – and Sharma caught him mid-fall, sealing the partnership. Alongside lead Nexus, participants include Tobi Lütke, CEO of Shopify (now also a Firecrawl customer-turned-investor), and previous backer Y Combinator. This Series A brings Firecrawl’s total funding to $16.2 million (including earlier seed funding). The fresh capital will help Firecrawl scale its team – both human and AI “agents” – and roll out new features like natural language querying for its web crawling API.

Funding Details:

• Startup: Firecrawl (California, U.S. – AI web crawling platform)

• Investors: Nexus Venture Partners (lead); Tobias Lütke (Shopify CEO); Y Combinator

• Amount Raised: $14.5 million

• Total Raised: $16.2 million

• Funding Stage: Series A

• Funding Date: August 19, 2025

Medallion Raises $43M in Funding to Automate Healthcare Provider Networks

Medallion, a San Francisco-based healthtech startup, has closed $43 million in new funding to expand its AI-powered platform for healthcare credentialing and compliance. Medallion’s software automates the tedious back-office workflows that hospitals and health plans use to credential doctors, enroll providers in insurance networks, and ensure ongoing compliance.

The latest investment was led by Acrew Capital, with participation from Washington Harbour Partners and a who’s who of existing investors, including Sequoia Capital, GV (Google Ventures), Spark Capital, and others. It brings Medallion’s total funding to $130 million to date. CEO and founder Derek Lo says the new capital will fuel the rollout of CredAlliance, a first-of-its-kind national credentialing clearinghouse aimed at eliminating redundant provider verifications across insurers.

By verifying a clinician once and sharing the data across many health plans, CredAlliance – powered by Medallion’s automation engine – could save the U.S. healthcare system hundreds of millions of dollars and dramatically speed up the onboarding of doctors. Medallion already supports credentialing for about 1 million healthcare providers (roughly 10% of the U.S. clinician workforce. With the new funding, Medallion plans to scale its platform’s AI capabilities, grow sales and partnerships, and onboard more major insurers to CredAlliance as it tackles administrative waste in healthcare.

Funding Details:

• Startup: Medallion (California, U.S. – healthcare credentialing automation)

• Investors: Acrew Capital (lead); Washington Harbour Partners; with insiders including Sequoia Capital, GV, Spark Capital, NFDG, etc.

• Amount Raised: $43 million

• Total Raised: $130 million

• Funding Stage: Growth round (Series C)

• Funding Date: August 19, 2025

Paradigm Nabs $5M Seed to Launch AI-Powered Spreadsheet Assistant

Paradigm, a San Francisco-based startup, has secured a $5 million seed round led by General Catalyst to bring its AI-enhanced spreadsheet software to the public. Founded by 23-year-old AI prodigy Anna Monaco, Paradigm turns the humble spreadsheet into a “living” workspace swarming with AI agents in each cell. Users can assign prompts to cells or columns, and Paradigm’s agents will automatically scour the web and databases to fill in information – effectively automating research, data entry, and analysis tasks that normally take humans hours or days.

The concept has quickly gained traction: Paradigm’s closed beta attracted a waitlist of over 10,000 users, and teams at firms like McKinsey, Crossbeam, and AI startup Cognition have already used it to radically speed up workflow. Alongside the $5M seed, Paradigm had raised an earlier $2 million pre-seed from Y Combinator and various tech founders, bringing its total funding to $7 million so far. With the new funding – and now a broader product launch – Monaco’s team plans to aggressively expand Paradigm’s capabilities beyond spreadsheets into a full AI-native productivity platform. The goal is to redefine knowledge work by allowing anyone to deploy “swarms” of AI agents for tasks, all through a familiar spreadsheet interface.

Funding Details:

• Startup: Paradigm (California, U.S. – AI-powered spreadsheet platform)

• Investors: General Catalyst (lead); Y Combinator and several tech founder angels (pre-seed)

• Amount Raised: $5 million

• Total Raised: $7 million

• Funding Stage: Seed

• Funding Date: August 19, 2025

Klarna Secures $26B Nelnet Deal to Turbocharge U.S. ‘Pay in 4’ Expansion

Swedish fintech giant Klarna has struck a colossal $26 billion funding agreement with U.S.-based lender Nelnet to fuel the expansion of Klarna’s popular “Pay in 4” buy-now-pay-later service across America. Rather than an equity round, this strategic deal is a financing partnership: Nelnet will purchase Klarna’s installment loan receivables on an ongoing basis, providing Klarna with a steady pipeline of capital to fund customer purchases.

In exchange, Nelnet assumes the credit risk on those loans, effectively offloading liabilities from Klarna’s balance sheet while allowing Klarna to retain control of customer relationships, underwriting, and servicing. The massive facility – one of the largest of its kind in the fintech sector – gives Klarna the financial firepower to aggressively compete in the U.S. BNPL market, where rivals like Affirm and Afterpay are vying for dominance. It also signals a deeper institutionalization of tech-enabled consumer lending models: traditional finance players are betting on fintechs’ underwriting tech and user bases at enormous scale.

Klarna, which has raised over $4 billion in equity from investors over its history, will leverage the Nelnet partnership to extend its reach among U.S. shoppers while maintaining prudent risk management. By effectively outsourcing credit risk to Nelnet, Klarna can focus on growth and product innovation in the world’s biggest consumer market.

Funding Details:

• Startup: Klarna (Stockholm, Sweden – fintech buy-now-pay-later platform)

• Investors: Nelnet (strategic financing partner)

• Amount Raised: $26 billion (credit financing deal)

• Total Raised: Not disclosed (in addition to ~$4 billion prior equity funding)

• Funding Stage: Debt financing / strategic investment

• Funding Date: August 19, 2025

Tech Funding Summary Table