Midwest Startup Funding Q2 2026: $1.27 billion across 114 deals

Midwest startups raised $1.27 billion across 114 deals in the second quarter of 2026. That is up 15.4% on the $1.1 billion the region managed in Q1, and is the first quarterly increase since last fall.

Worth noting is that a single company in Michigan accounted for $650 million of that amount. Strip out Slate Auto's Series C and the region raised $619 million — comfortably below a more evenly distributed Q1. Strip out Michigan altogether and the other five states raised $504 million between them, down 51.2% on their own Q1 figures. So the quarter improved, but the region did not, and both are true at once.

The year-over-year comparison is where it gets intriguing. Q2 2025 brought the Midwest $3.7 billion which resulted in a 65.7% fall. In the same twelve months, startup funding across the country went the other way entirely, rising 183.1% to $141.33 billion. That gap is the story of the quarter and has been a recurring theme since late last year, with the region as a whole contributing under 1% of all funding nationally. 

California alone took $107.44 billion, or 76% of every venture dollar raised in the country, and more than half of California's haul went to one company, Anthropic. 

A year ago the Midwest's dollar share of the national quarter was 7.4% vs this being 0.90%. The region's share of national deals barely moved over the same period — 6.4% then, 6.0% now. We are doing roughly the same proportion of the nation's deals, but now capturing a fraction of the money we’ve been used to. The market has moved, we’ve not yet moved with it.

‍

Deals are getting done. Big checks are not.

Look only at activity and the Midwest had a reasonable three months. The region closed 114 rounds against 105 in Q1, with four of the six states increasing: Illinois went from 32 to 42, Indiana from seven to 12, Wisconsin from eight to 12 in its busiest quarter since 2024, and Ohio from 15 to 16. Minnesota held steady at 17, exactly where it has sat for three consecutive quarters. Founders are forming companies, and investors — mostly local writing seed and early-stage cheques — are still funding them.

What the region did not do was write many big checks. 

The average Midwest round in Q2 was $11.1 million, and even that figure is flattered by the Slate Auto deal. Set this against the average American deal of $74.3 million and the picture is plain enough. Nationally, capital is pooling into fewer and larger financings. In the Midwest, it is spreading thinly across many small ones. Taking the analysis further, If we look at the US without California and also remove the Midwest numbers to make a fair comparison, the average deal for the remainder of the country is still $30+ million, more than four times our own figure. There is an argument that we are not operating in the same market, and therefore are increasingly not even in the same conversation with each other.

‍

‍

State by state

Michigan — $764.49M, 15 deals

The Wolverine State topped the region by a distance, raising more than the other five states combined, accounting for 60% of every dollar in the Midwest — and did so on 15 rounds, fewer than every state bar Indiana and Wisconsin. Slate Auto supplied 85% of the total. Average deal size climbed from $2.55 million in Q1 to $50.97 million in Q2, which is less a trend than a weathervane: Michigan is down 65.9% year over year, but only because Q2 2025 was itself an outlier quarter. 

→ Read the full Michigan Q2 2026 report

Illinois — $238.60M, 42 deals

Illinois is the region's engine of activity: 42 rounds, more than double any neighbour, with Chicago at its center. Dollars are another matter. At $5.68 million, the average Illinois round is about a ninth of Michigan's, and the state's funding fell 60.4% year over year. Nearly three times the deals; less than a third of the money. 

→ Read the full Illinois Q2 2026 report

Minnesota — $91.50M, 17 deals

Minnesota posted the ‘softest’ year-over-year fall in the region, down 49.1%, on a deal count that has now held at 17 for three quarters running — the steadiest run of activity anywhere in the Midwest. The average round shrank to $5.38 million from $13.84 million a year earlier, so a consistent number of Minneapolis-area companies are raising, but each is raising less. 

→ Read the full Minnesota Q2 2026 report

Wisconsin — $87.03M, 12 deals

Wisconsin logged its busiest quarter since 2024, and its $7.25 million average round was the region's second-largest — both facts resting almost entirely on Spectrum Brands' $67 million convertible note. The company is public, is not a technology business by any ordinary reading, and roughly three-quarters of the state's quarter runs through it. We have chosen to count it and label it in plain sight rather than let it quietly inflate a venture number into something it is not. 

→ Read the full Wisconsin Q2 2026 report

Ohio — $51.35M, 16 deals

Ohio closed 16 rounds, third-most in the region and more than Michigan, Indiana or Wisconsin managed, and still finished with the steepest decline of the six: down 84.5% year over year. The average Ohio round was $3.21 million, against $8.50 million a year ago. Sixteen deals at three million apiece does not move a state's number, and in a neighboring — and rival — state, one round did. 

→ Read the full Ohio Q2 2026 report

Indiana — $35.65M, 12 deals

Indiana finished last on dollars with the smallest average check in the Midwest at $2.97 million, down 76.7% year over year. Deal count nearly doubled against a very quiet Q1, from seven to 12, which puts the state level with Wisconsin and within three of Michigan. The Hoosier State's problem this quarter was not founders failing to raise. It was the ceiling on how much was invested. 

→ Read the full Indiana Q2 2026 report

What we’ll be watching in Q3

The Midwest's venture machine kept running in Q2 and its capital markets did not keep up. Deal count is up, average check size is down in every state, and the region's share of the national dollar has fallen to under a percentage point — not because founders stopped executing, but because the money nationally is collecting around a specific tech. Is it permanent? Will we see similar companies?

Whether growth capital finds us — and whether it arrives without asking the company to move first — is what we will be tracking, quarter by quarter, in the funding data and across the startup and investor database, alongside you.

‍

Read the Q2 funding reports for the other states here:

Illinois

Ohio

Minnesota

Indiana

Michigan

‍

Want to hear more stories every week of innovation and entrepreneurship from across the Midwest? Subscribe to the StartMidwest newsletter here.