VCs are investing more money in social media startups this year after a dismal 2025

2026/08/14

Categories: business-finance

VCs are investing more money in social media startups this year after a dismal 2025

By

Sydney Bradley

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It's a tough environment for a founder trying to build the next-generation Facebook.

With more apps than ever and the mainstay social media giants dominating people's screen time, the competition is fierce. Investors, meanwhile, are pining after flashy AI deals.

There was a peak in venture capital investment in social startups in 2021 — when apps like BeReal and Clubhouse were getting people excited for new challengers taking on Instagram and TikTok — according to PitchBook data, and the number of deals has declined each year since.

That 2021 peak saw 239 deals totaling $2.2 billion, per PitchBook's data of US transactions. In 2025, PitchBook counted 97 deals totaling $330 million.

(To be fair, 2021 was an anomaly record year for venture capital across the board.)

So far in 2026, PitchBook counts more than 50 deals totaling $355 million in the space as of July 21 — already surpassing 2025 in dollar flow. If that pace continues, the category could welcome a slight rebound in investor interest.

Which startups are raising capital? There's Fizz, an anonymous social app for Gen Z, which raised a strategic round of capital as it expands globally. There's also Corner, a social mapping app that lets people save and share local spots (such as restaurants, bars, and shops), which is gearing up for a Series A.

Zooming out, consumer-social startups — broadly ranging from social media networks to dating apps to entertainment apps — were a fraction of the overall deals in 2025.

Across all venture capital deals in 2025, PitchBook estimates $513 billion in deal flow. AI and SaaS made up a bulk of this. Specifically, PitchBook counted more than 11,800 AI deals in 2025.

"Everyone fled consumer a couple years ago," Rick Heitzmann, cofounder of FirstMark Capital, told Business Insider.

That's left a remaining cohort of investors still on the hunt, though. Investors at firms like Menlo Ventures, Forerunner, and up-and-coming funds founded by VCs looking to go solo are backing social startups across sectors such as networking, dating, and AI.

There are plenty of startups racing to build social networks that feel more "AI native," such as Eigen, which says it is developing a "mutual friend" that would turn AI agents into a tool for connecting people. The company announced a $15 million seed investment in April.

PitchBook's data is limited, too, in how it classifies social startups. Some dating and social AI companion or chat startups, including Eigen, do not fall under PitchBook's social category and are therefore excluded from this dataset.

As AI continues to renew investor interest in consumer social startups, a massive question, however, stands: What — if anything — will actually stick?

Read Business Insider's list of 22 VC firms backing social startups.

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Sydney Bradley

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Sydney Bradley has been covering media and tech for Business Insider since 2020. She breaks news and writes extensively about Instagram and Facebook, as well as new social media startups, dating apps, the creator economy, venture capital, and tech culture.She regularly contributes to BI's "After Hours" series, where our reporters dive into the social scenes shaping tech, media, and finance.Sydney's reporting on Instagram was nominated as a finalist for the 2021 Los Angeles Press Club National Entertainment Journalism Awards.She graduated from the University of Virginia with a degree in American Studies. You can follow Sydney's work on LinkedIn, Twitter, and Instagram at @sydneykbradley.Have a tip? You can also contact her via encrypted messaging app Signal (@sydneykbradley.123), encrypted email ([email protected]), or standard email ([email protected]). Use a personal email address, a nonwork WiFi network, and a nonwork device; here’s our guide to sharing information securely.

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