Midwest Startup Fundraising – Q3 2025: Uneven, Outlier-Driven, and Sober.

Across the six states we track on the pages of StartMidwest, Midwest startups raised roughly $1.21B over the third quarter of 2025. That total wasn’t a breakout. It was the sum of some very different stories: two states notching gains against a disappointing overall regional quarter, two slipping from recent highs, and two posting their softest quarters in many years. The national comparison only sharpens the contrast. While U.S. venture nearly doubled quarter-over-quarter and year-over-year off a handful of mega-rounds (Anthropic, OpenAI, xAI) alongside coastal spikes in Massachusetts and New York and numbers not seen since the huge numbers of 2021 and 2022, most of the Midwest did not rise on the same tide.

The most honest reading of Q3: progress here remains top-heavy and timing-sensitive. One big round at the right time can reframe an entire state’s narrative. And when that doesn’t happen, the quarter looks thin, sometimes historically so. That’s not a value judgment; it’s just what can be clearly demonstrated in the numbers.

Here is a summary of each state for this quarter.

Minnesota: The headline pops, the undercard doesn’t

Minnesota came in at $287M, up from $180M in Q2 and $258M in Q3 2024 - technically the only Midwest state up on both comparisons this quarter. But as our state piece makes clear, the lift came almost entirely from FarmOp Capital’s $250M growth equity round, led by The Carlyle Group. Strip out this outlier and the story changes fast: the state’s resilience is legitimate, but it isn’t immune from a few large, later-stage checks propping up the aggregate. That was what the numbers in Minnesota revealed, not defied. 

Wisconsin: Lowest in a decade and reporting reality

Wisconsin’s $18M total marked the state’s lowest quarter in about a decade, down sharply from $66.3M in Q2 and $131M a year ago. Our article explained part of the reason why: the timing decision to keep C-Motive’s $13.5M in our Q2 story  (where it chronologically belonged according to our info) rather than pull it forward into Q3. In smaller ecosystems, a single borderline round can swing headlines, and this one did. Even if you included C-Motive, Q3 would have been $31.5M, still the lowest since Q1 2020. Zoomed out, the state helped us understand Q3 as weak region-wide vs the data of national strength. 

Indiana: A steep drop exposes dependence on outliers

Indiana posted $66.3M, a steep fall from $153M last quarter and $184M a year ago, and its lowest since mid-2020. Roughly half the quarter came from a single growth-equity check in software company GeoH. In writing the story, we were reminded that Q2’s number could also be seen as ‘artificially inflated’ by a single $90M round; further proof that outliers set the tone around here. The underlying Indiana story is not hype; it’s patient SaaS/logistics/industrial buildouts in a quarter when no big later-stage checks landed.

Michigan: A trough quarter against a frothy national tape

Michigan recorded $141M, its lowest since Q1 2024 and the fourth-lowest over the last 23 quarters. The national tale is described by some investors as “frothy”, but the numbers elsewhere didn’t trickle down in the Midwest and Michigan clearly demonstrated that. The mix was broad - manufacturing, energy, security, health—but modest in size and missing a tide-raising outlier. While we’re avoiding performative cheerleading, it is worth noting that the state can still finish the year well if one or two later-stage rounds hit in Q4.

Ohio: one of the region’s stronger ledgers

Ohio totaled $340M, about 20% below both Q2 2025 and Q3 2024, yet still among the Midwest’s stronger tallies this quarter. The texture mattered: 17 rounds above $1M, with Cleveland re-emerging as the headline including Splash Financial’s >$70M Series C, and later-stage credibility showing through  with Neuros Medical’s $56M Series D. This is sober, but optimistic: less casino, more construction and geographically healthier than many others.

Illinois: Resilience with restraint thanks to fintech

Illinois puts up $358.2M, up 13% QoQ from $317M but well below last year’s $680M amongst a wider “regional cool-down” quarter that’s still one of Illinois’ four lowest in a decade. The mix did some heavy lifting: fintech accounted for more than half the total capital, the top five made up ~78.7% of total dollars, and the presence of martech company Vibe was a rare outlier sectorally. The tone in the state is one of realistic resilience and deal flow without the sugar-rush of 2021–22. 

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Illinois and Ohio together account for four of the top five, with Minnesota’s single giant check doing most of the lifting for that state. The outlier dynamic in our region has never been more evident than it is in this quarter. 

What does Q3 actually say about the Midwest?

1) Concentration rules. Illinois’ top five consumed ~79% of in-state dollars; that state and Ohio combine for more than half the regional total; Minnesota’s headline hinged on a single investment; Indiana’s entire quarter turned on whether one $90M round fell into Q2 or Q3 and so did Wisconsin. 

3) Geography diversification is good. Ohio’s top deals stretched across Cleveland–Toledo–Cincinnati, not just Columbus. When similar things happen in Michigan and Wisconsin, we see better overall results. That tells us that diffusion matters around here - even in a down quarter - and helps anchor talent outside one metro area. 

4) The national numbers haven't yet trickled down. The Michigan, Wisconsin, and Indiana data in particular sit in stark contrast to what is happening at a national level: U.S. fundraising numbers double-sized in Q3, but the lift concentrated in a handful of states and a handful of companies. The Midwest saw little of that. The real question is whether this gap between coastal mega-rounds and Midwest mid-market reality is a new normal, or a trend that will spread across the country and the world. In 2021 and 2022, it was.

A realistic outlook for Q4 (and the real signal to watch)

Calling a bottom or a bounce from one quarter would be a mistake. 

What the Q3 numbers do not help support is a culture of boosterism. The quarter was sober, and that’s where we find the real takeaway: the Midwest did not ‘beat the trend’ in Q3. It illustrated it. Concentrated capital is driving headlines everywhere; concentrated capital - or its absence - framed each state here. The real question is what happens next and how does it help smaller, emerging companies? These are the focus of policy makers, but what we see in the data for this quarter is that in most states, they’ve been lost in the wash.