Fundraising Q2, 2025: Minnesota

Minnesota’s startup fundraising declined in the second quarter of 2025, with the state’s emerging companies securing a total of $176 million in investments from April through June, according to data from Dealroom. This represented a drop of approximately 43% when compared to the preceding quarter, which saw $305 million raised, and was around 50% less than the $349 million secured in the same period last year.

Despite this trend, health-related startups remain a dominant force in Minnesota’s venture capital scene. The quarter’s top three funding rounds were all in the medical sector, underscoring the region’s sustained strength in healthcare innovation. 

Leading the pack was Corvia Medical, which closed a $55 million round last month for their heart failure treatment tech. Following closely was Alpheus, a company that specializes in sonodynamic therapy for the treatment of brain cancer, with a $52 million Series B investment. Ace Vision, a medical device business for age-related vision loss, also contributed to the state’s total with a $29.4 million Series B round. Combined, these three medical startups accounted for nearly half of the total capital raised in Q2 within Minnesota.

This concentration in health-related ventures is no anomaly for the state. Over the past decade, our data indicates that more than 40% of all startup funding in Minnesota has flowed into health-related businesses, a testament to the region’s deep-rooted expertise and strong ecosystem in the medical and biotech sectors. The state’s reputation as a hub for healthcare innovation continues to attract significant interest from investors, even in a quarter where overall fundraising activity slowed considerably.

The sharp decline in Q2 fundraising parallels broader market trends that have seen venture capital activity cool off nationwide. The 43% drop in Minnesota almost precisely reflected the difference between Q1 and Q2 nationally, whereas California was down almost 57% quarter on quarter. Massachusetts - which is also a healthtech hub - was down only 21% from Q1.

The changes in funding, as evidenced by these macro fluctuations, has been most likely influenced by economic uncertainties, inflationary pressures, and shifting investor appetites. For Minnesota and other Midwest startup ecosystems, this may signal a period during which entrepreneurs and investors need to adapt to a more cautious capital environment.

In general, the dip should not raise any concerns, as Minnesota’s continued leadership in health-related startups offers a beacon of stability and potential growth. The strong performance of some startups also highlights the quality of ventures emerging from the state, as well as a foundation for renewed fundraising momentum as market conditions evolve.

Looking ahead, the resilience of the health sector -  supported by decades of local expertise and investment - means this will remain a key pillar of the state’s innovation economy even as it adjusts to new market realities.