Minnesota Startup Funding: Q3 2025

Minnesota startups raised $287 million in the third quarter of 2025.

That compares to $180 million in Q2 2025 and $258 million in Q3 2024.

These figures give the state the dubious distinction of being the only one in the Midwest this quarter to be up on both the previous quarter and the same quarter from last year. 

Congrats, Minnesotans.

Let’s stop there. 

Don’t dig any deeper. Why look further into these numbers?

‍

We could act like most local boosters do - or like many a state or local economic development corporation - and flaunt those figures: “Minnesota bucks regional trends” or “Minnesotans prove resilience.”

But like many things in our part of the world, that wouldn’t be true. Because like much of the data we see in small sample sizes across the region, it’s heavily influenced by an outlier.

In this case, one $250 million mega round of growth equity into FarmOp Capital, the entirety of which came from Washington, D.C.–based private equity firm The Carlyle Group.

FarmOp describes itself as providing “innovative financial solutions with capital and technology, helping farmers invest in their potential.” In other words, a tech-enabled fix for age-old problems in a traditional industry. Some will say it shouldn’t be included. It’s not a ‘startup’, or that private equity funding shouldn’t be included in these stories. Luckily, they don’t determine what goes into these reports. We do.

From day one, our attitude towards what we talk about on the pages of this site has been simple: innovation for the purpose of economic growth, so that people get jobs.
And the funding of FarmOp fits that perfectly.

FarmOp has been around since 2017. It employs about twenty people. But imagine the impact of what they’re building: a financial bridge between capital and Midwest farmland, one of the region’s most critical industries. That’s innovation with weight. That’s impact.

Still, when you strip away the outlier, the picture changes fast.

And that contrast matters. Because it shows what many Midwest founders already know: that the region’s startup economy, while resilient, remains heavily dependent on a handful of large, later-stage deals to prop up the rest of the ecosystem: by developing talent, allowing for early-stage capital from ‘winners’ filtering through and as beacons of success.

This quarter, we also included a $3 million NIH grant to Nuwellis, a Minneapolis-based medical device company that develops technology for heart and kidney health. Normally, grants wouldn’t make the cut. But in this case, the round was both sizable and meaningful: it supports the development of a dedicated pediatric continuous renal replacement therapy (CRRT) device for patients under 20 kilograms.

That kind of innovation matters in a state with a world-class medical system and where health comprises 43% of all funding over the last decade and where advances in biotech and medical devices have long formed one of the pillars of its startup identity. 

But that’s the real story here. Minnesota didn’t “beat the trend.” It revealed it.

Outliers did what outliers do: they often mask the ability to view the whole. 

So yes, the headline number looks great. But behind it is a familiar Midwest truth: progress here rarely comes in uniform waves. It’s uneven, often led by a single breakout story that hints at what could come next if more capital, attention, and risk tolerance were spread further downstream.

As we wrap Q3, Minnesota remains an outlier, but not necessarily in the way the boosters would have you believe.

It’s not proof of invincibility. It’s proof of what happens when one big check meets a sector that still defines this part of the country.

And while that may not paint the prettiest picture for early-stage founders looking for funding right now, it does remind us why we track these numbers in the first place: not just to celebrate the wins, but to understand what they mean… and where the gaps remain.