VC funding rebounds for social media startups after a weak 2025

For founders aiming to build the next Facebook, the road has rarely been more daunting. Dominant platforms like Instagram and TikTok continue to capture users’ attention, while the ever-expanding landscape of mobile apps amplifies the competition for both screen time and investor capital. At the same time, venture investors are shifting their focus toward artificial intelligence deals, creating headwinds for entrepreneurs in the consumer social sector.

According to PitchBook, venture capital investment in US social startups peaked in 2021, during a period marked by buzz around apps like BeReal and Clubhouse that promised fresh alternatives to mainstream platforms. That record-setting year saw 239 deals totaling $2.2 billion in deal value. However, the excitement has since faded, with the number of US deals dipping each subsequent year. By 2025, the sector saw just 97 deals valued at $330 million, highlighting a significant pullback. While 2021 was an exception for overall venture investment, with record flows across categories, the decline in social startup funding has been particularly acute.

The picture may be showing signs of improvement in 2026. As of July 21, PitchBook recorded more than 50 social startup deals in the US, amounting to $355 million in total funding, already surpassing the entire amount invested in 2025. If the current pace is sustained, the sector could experience a modest rebound in investor attention, even as overall interest remains far below the 2021 high.

Among those attracting fresh capital are startups like Fizz, an anonymous social platform targeting Gen Z, which recently closed a strategic funding round as it continues international expansion. Another is Corner, a social mapping app enabling users to curate and share go-to locations such as restaurants and shops, now preparing for a Series A raise. Despite these bright spots, consumer-social deals made up only a minor share of the broader venture market in 2025. That year, PitchBook estimates showed $513 billion in total US VC deal flow, driven largely by artificial intelligence and software-as-a-service (SaaS) companies. Specifically, there were more than 11,800 AI deals in 2025, underscoring the scale of investor enthusiasm for the sector.

"Everyone fled consumer a couple years ago," said Rick Heitzmann, cofounder of FirstMark Capital, in comments to Business Insider. Still, a cadre of investors remains engaged with the sector. Firms like Menlo Ventures and Forerunner, as well as emerging solo general partners, are deploying capital across areas such as networking, dating, and AI-infused social experiences.

Increasingly, new startups are attempting to build platforms that are more “AI native.” One example is Eigen, which is developing a “mutual friend” feature using AI agents to connect people and announced a $15 million seed round in April. However, PitchBook’s methodology does not always capture the full range of social startups, as some AI-driven dating and social companion apps fall outside its social category and are omitted from the data.

As AI breathes new life into the consumer-social space, a fundamental question persists: with so much competition and so many attempts, which concepts - if any - will gain lasting traction? The answers are likely to emerge over the coming quarters as founders and investors test new ideas, and as the sector seeks its next breakthrough in a market still shaped by dominant incumbents and shifting investment priorities.