Fundraising Q2, 2025: Illinois

Illinois startups raised a total of $317 million during the second quarter of 2025 (April to June), marking a sharp decline in venture capital activity within the state. This figure represents a 65% drop compared to the first quarter of 2025, when Illinois startups raised $917 million. Moreover, the amount raised was down 62% year-over-year from $849 million during Q2 2024.

While the slowdown is palpable and mirrors a challenging national fundraising environment, the early signs for Q3 2025 suggest a swift rebound, with the next quarter’s fundraising performance already exceeding these disappointing Q2 totals - a hopeful indication that the dip may be short-lived, and that perhaps overall the year will be a positive one.

Among the top five deals struck in Illinois during Q2 2024, each individually outstripped the largest single deal of Q2 of this year, underscoring how variable fundraising markets can be. Also, the largest deal recorded in Q1 2025 was nearly double the entire amount raised in Q2, underscoring just how front-loaded the opening months of this year were.

Despite the downturn in total capital raised, Illinois maintained its leadership position across the Midwest for deal volume. Although Ohio was ahead in average deal amount, Illinois topped the region not only in total number of deals but also in those that exceeded $1 million. This points to a continuing, broad-based ecosystem with solid engagement among investors and startups alike, even if the overall capital figures receded.

The second quarter’s fundraising malaise was not unique to Illinois. 

Across the country, venture capital funding suffered a 43% decline quarter-over-quarter. Notably, California saw funding drop by 57%, while Massachusetts experienced a smaller contraction of 21%, placing Illinois’ experience within a wider national slowdown.

The top three Illinois deals in Q2 illustrate both the high caliber and sector diversity of startups still attracting significant capital despite challenging conditions:

• Enterprise software business Ocient secured $42.1 million in a Series B round, reflecting Illinois’ ongoing strength in tech.
• NuMat Technologies raised $40 million in a Series C funding, representing the manufacturing sector and its prominent place across the Midwest.
• HOPPR closed a $31.5 million Series A round, showcasing growth in health-related technology.

Health sector businesses featured heavily among the largest funding recipients, with four of the top ten deals concentrated in this area during Q2. This trend aligns with a decade-long pattern: health startups account for 20% of all venture capital in Illinois, more than any other category. This is a significant observation given the state’s strategic intent towards deep tech, particularly quantum computing.

The marked contraction in Q2 likely reflects broader market uncertainties and capital preservation trends than a fundamental loss of startup momentum in the state.

Looking ahead, the strength already evident in Q3 funding activity points to a swift recovery for Illinois startup funding.