Illinois Startup Funding: Q3 2025

Illinois startups raised $358.2 million in the third quarter of 2025. That is a modest increase from Q2’s $317 million, but still well below the $680 million raised during the same period last year.

While Illinois’ total represents a 13% quarter-on-quarter rise, it’s also part of a larger cooling trend across the region in Q3. The state hasn’t swung as wildly as some of its Midwest peers, yet this quarter still marks one of its four lowest fundraising totals in the past decade, a stark contrast to the record-breaking highs of 2021–22.

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Nationally, the story was very different. U.S. startup funding nearly doubled both quarter-on-quarter and year-on-year, driven by massive rounds from Anthropic, OpenAI, and xAI, which accounted for much of a California-heavy rebound. Massachusetts and New York followed the same pattern, each roughly doubling their totals to $3.7 billion and $8.3 billion respectively.

Illinois’ numbers tell a subtler story however. 

Fintech dominated this quarter, accounting for more than half of all capital raised and reinforcing the state’s reputation as one of the nation’s most consistent fintech hubs. Over the past ten years, fintech ranks as Illinois’ third-largest sector by total fundraising dollars, behind software and health. Historically, when fintech performs well, the state - and often the region - tends to do well in total dollar terms.

In total, 24 funding rounds were publicly reported in Illinois this quarter, 21 of them above $1 million. The top five accounted for $282 million, or 78.7% of all capital raised, showing just how top-heavy the market remains.

Among those top five rounds, three were fintech-related. That concentration of funding underscores both Illinois’ deep bench of financial technology founders and its enduring ability to attract capital even as other sectors slow.

Perhaps more surprising was the presence of martech company Vibe among the top raises - a rare occurrence in Illinois’ funding landscape. Martech has attracted only 5% of all Illinois fundraising dollars over the past decade, compared with 9% in Indiana. Vibe is an outlier in more than just its sector alignment: a business with a foreign founding HQ that has set up shop in the Midwest, and raised most of its funds outside of the country. Although, when you hit $100m ARR in two years, you can probably do what you like.

Despite broader national growth, Illinois’ investors and founders appear to be focusing on quality and sustainability over size. Deals are smaller, but the pipeline of new rounds remains healthy - suggesting the state’s ecosystem is consolidating rather than contracting.

As 2025 enters its final stretch, Illinois’ performance could be described as somewhere between resilience and restraint. While the megadeals may be happening elsewhere, any foundation for a balanced, sector-diverse recovery will need to be laid in the Midwest’s financial capital.