Illinois leads the Midwest in deal volume in Q2 2026.

Illinois startups closed more venture deals in the second quarter of 2026 than any other state in the Midwest with 41 businesses securing funding during the quarter. In an era of coastal mega-AI deals, that’s great news: no neighboring state came close on activity. Minnesota managed 18 deals, Michigan 14, Ohio 16, Indiana 13, and Wisconsin 12. On the raw count of companies getting money into the bank, Chicago and the rest of the state delivered more than  anywhere else at the dollars.

Let’s take a look at the dollars.

Those 41 deals added up to $226.33 million. That is second in the region, behind Michigan's $764.49 million, which as mentioned was achieved with a third of Illinois's deal count. That makes the average Illinois round $5.52 million, where Michigan's average was $54.61 million. Illinois did nearly three times the deals but raised less than a third of the money.

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It is clear that Michigan's total was based on outliers: in this case, one very large check. So it is neither consistent, nor reliable. Illinois, with Chicago at its center, delivers something else entirely.

The state is an engine of activity with multiple seed and early-stage rounds, alongside more than a few grants — but the mega-rounds that can move the needle didn’t show up. Which of those two patterns you'd rather have depends on what you think you're building.

The more difficult figures to look over are year-over-year. Illinois venture funding more than halved, falling 62.45% from Q2 2025. And it did so in a quarter when national venture funding tripled. US startups raised $155.67 billion in Q2 2026, up 211.85% from a year earlier. California alone took $122.78 billion of that, 78.87% of every venture dollar in the country and amongst all that, Anthropic was responsible for $85 billion of that. New York and Massachusetts grew too while Illinois went the other way.

The national story of 2026 - as it was for a large portion of 2025 - is that capital is concentrating into a small number of very large rounds, most of them Californian. This led the average US deal size to jump to $83.43 million even as the total number of deals fell. Capital isn't actually scarce. It is just going to a very short list of names, and that list doesn't run through the Midwest.

Founders are still raising. Investors are still writing checks. The pipeline that produces a $5 million round this year is the same one that might produce multiple $50+ million rounds next quarter and Michigan this quarter demonstrates what happens when one large deal lands. 

The open question is whether those funded earlier will. A healthy ecosystem needs both the volume Illinois has demonstrated and the check sizes it mostly doesn't. In fact the state hasn’t posted a single $1 billion+ quarter since late 2022 and its largest round - $500m for Nerdio in Q1 2025 - is double the second largest and five times the third largest over the past 18 months.  

For now, the TL;DR on Illinois in Q2 2026 is: the most active state in the region, the second-most funded, down sharply year over year, and doing its business in small increments while the national money pooled somewhere else. We can’t call this momentum and be serious about it. But, it is a story about a state that keeps its deal machine running even in a difficult funding period, and now has to prove the volume of deals are the start of something and not the whole story.

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