Minnesota Startup News 2025: Year in Review

‍Minnesota is probably the most interesting state we cover on our pages. Before the cries of anguish ring out from across the region, please hear us out. Of all the states we cover, it also seems to have the least connectivity to its neighbors, and that may be a good thing. Wisconsin and Illinois have their major cities within easy driving distance, and ‘Chicagoland’ actually covers part of Wisconsin. Ohio and Michigan are… well, heavily intertwined through their proximity and industry (don’t @ us, you know its true) and Indiana sits in between these two monoliths.

But Minnesota is different. It has a smaller GDP than most, but alongside its smaller population, the GDP per capita is second only to Illinois, which is one of the highest in the nation. It’s 2025 funding per capita was higher than any other Midwest state we cover, which also led to a Funding to GDP ratio second only to Michigan this year (which had an outlier year, more on that to come). Its percentage of total fundraising that goes to the health category is second only to Massachusetts. 

All of this leads to the conclusion that Minnesota doesn’t really follow trends or look for “ecosystem building” initiatives. It just does what it does, does it well and the people that live there are happy and proud to call the state home. Unfortunately, in writing this piece, we realized that we’ve probably identified less stories overall in that state than any other this year and much of what we shared of significance was down to the excellence of our local contributor, Elise Riniker. We’d like to correct that in 2026, so if you’re reading this from Minnesota and would be interested in being a contributor, please get in touch.

In any case, you can see all of this play out through our stories. In the pipelines for innovation, in the way local venture capital is organizing itself, and in what Minnesota keeps producing when it leans on its strengths: medical technology, health care, manufacturing, food, and energy. 

This all came through in the themes below that showed up again and again across the Minnesota stories we published this year.

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1. Talent that starts early and stays close

A lot of regions talk about ‘the pipeline.’ We see evidence that part of its strength is that Minnesota keeps building the infrastructure for it.

In our coverage, that started where it often starts in Minneapolis–Saint Paul: at the University of Minnesota, where student entrepreneurship is treated less like a club and more like an operating system. BizPitch, the Holmes Center, and the Toaster Innovation Hub are all signals of students not just learning a business model in theory. They’re pitching, building, and finding early customers (and sometimes early capital) while they’re still on campus. 

Atland Ventures takes that one step further. It’s student-owned, structured as an independent LLC, and making real investment decisions with real money, not based on a simulation. And in the context of economic development, it matters because it increases the odds that ambitious students won’t feel like they have to leave the state to take their shot.

Elise also shared how Twin Cities Startup Week helped reinforce the same pattern, but from a different angle. When more than a thousand founders, investors, and ecosystem builders show up across Minneapolis and St. Paul, its about more than events. It's also the social layer that keeps talent circulating - between campus, companies, and capital.

“Entrepreneurship education teaches students that they don’t have to wait for permission to build something meaningful. It’s reshaping how young people see their careers, their agency, and their ability to solve real problems,” Elise wrote in her piece about the next generation of entrepreneurs.

If we zoom out, we see where technology commercialization starts to matter - turning research, networks, and student energy into companies that can stand on their own. Elise helped keep us in the loop, and see that Minnesota is attempting to build repeatable processes. 

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2. The venture community is maturing

Minnesota’s capital story this year wasn’t just “more rounds.” It was “more connective tissue.”

The story on MN:EVC (Minnesota Emerging Venture Capitalists) is a good example of how that’s taking shape. It started with a simple problem - junior investors across firms felt isolated- and turned it into a peer-led network focused on relationships, professional development, and collaboration. That sounds generic until you see what it enables: shared deal flow, faster diligence, co-investments, and a reason for talented people to stay in the Twin Cities instead of drifting to the coasts.

“I selfishly wanted more friends in the VC community locally here in Minnesota and thought this was a great way to do that. Over time, I realized everyone else wanted that too – and that’s why we’ve been able to be so successful,” Emily Kist of Nelnet Ventures shared in the article.

Elise's Mary Grove story added a personal angle on the same theme. She’s seen venture capital from the inside at the highest levels, and she’s explicit about what Minnesota needs more of. In Mary’s telling, the opportunity isn’t just that Minnesota has capital. It’s that Minnesota has assets - Fortune 500 density, deep industry, and hard problems - that can turn into venture-scale outcomes if investors and operators actually connect the dots. 

Her comments about GreaterMSP (the Greater MSP Partnership) and the Minnesota Investors Network also underline something that validates our assertion that Minnesota is just different and backs up these other stories: in this region, a lot of the connectivity is peer-run and facilitation-driven, not top-down.

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3. Minnesota medtech and health care aren’t just a sector.

As we mentioned, innovation in the health space shows up as both identity and advantage.

The broad view came in another of Elise’s stories, on Minnesota’s growing influence in wellness and healthtech innovation. She made the case that Minnesota doesn’t need to win a hype contest with anywhere else. It needs to keep doing what it’s already doing: building companies that come from lived industry experience and solve real problems. 

That story pointed out that Minnesota MedTech 3.0 was recognised as a U.S. tech hub by the U.S. Economic Development Administration and ranks as one of the nation’s top three medtech hubs, behind California but ahead of Massachusetts. That’s a signal that the state’s innovations in this field are actually part of a national competitiveness agenda. What other state in our region can say that?

Reema Health’s fundraise of $19m put the ‘why now? into sharper focus. The company’s model - software plus community guides doing in-person outreach - sits at the intersection of health care delivery and economics. It’s also a reminder that the biggest market opportunities in health care often come from operational pain, not shiny tech demos.

“Medicaid plans are in a challenging position where budget cuts will shrink enrollment to a sicker member mix with higher per member costs. That’s why they need Reema more than ever,” Justin Ley, Reema Health Co-Founder and CEO said in the article.

And then there was the headline outcome of the year HistoSonics, a Minneapolis-based medical technology company, agreeing to a $2.25 billion acquisition. That scale of outcome changes how people think about what’s possible locally - and reinforces why Minnesota keeps attracting serious attention in medical technology, including a company like this… founded and heavily funded in Michigan that found a home in Minnesota.

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4. AI is no longer a theme. 

We can’t write one of these in 2025 and avoid artificial intelligence. In her story about Twin Cities Startup Week, Elise talked about how the discussion wasn’t that everyone is building AI startups. But that AI is now baked into how people describe markets, how investors filter pitches, and how founders explain differentiation: “The ‘Inside the Mind of an Early-Stage VC: AI, Markets & What Gets Funded Now’ panel opened with a candid assessment of today’s fundraising landscape. When asked to describe the current venture capital market, the words shared were: unknown, volatile, competitive, AI,” she wrote.

Mary Grove framed this as a cultural challenge. Minnesota has strengths. But strengths don’t matter if the state plays it safe while technology shifts underneath it: “We have to be as aggressive as we can about keeping our foot on the gas pedal, recognizing the urgency, and leaning into new technology like AI.” 

Even our DTECH Midwest story - focused on utilities, grid reliability, and affordability - listed artificial intelligence alongside cybersecurity and asset management as part of what the region’s energy future now requires. That’s where AI is ending up in practice: embedded in everyone else’s job. 

Its a similar story across the region: we need to make use of artificial intelligence to improve efficiency and outcomes, but doing so in our region means utilizing it to improve and enhance our existing industries.

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5. The real economy is where Minnesota can win

A lot of startup coverage gets trapped in software land. But in our region, software is a facilitator, not the end goal. 

This year we wrote about a dairy accelerator founded in St Paul, about a statewide manufacturing contest, an energy summit built around grid realities, and a landfill carbon removal startup with global ambitions. That’s Minnesota doing what many of our state’s do: shipping practical innovation inside legacy industries. 

The Midwest Dairy Accelerator story was a reminder that ‘startup’ can mean many different things. Sometimes it means a new product, a better supply chain, or a cleaner way to meet shifting consumer demand - with small businesses and regional brands in the mix. According to our story, “dedicated mentorship, industry connections, and resources to help them scale” were on offer to the businesses involved.

Carba’s $6M raise, meanwhile, showed a Twin Cities-area company working on carbon removal in a way that looks a lot like Minnesota: technical, industrial, and tied to physical-world constraints like landfills, logistics, and verification. 

“Carba’s solutions represent the kind of innovations the world needs now. Carba is one of the most technically credible and quickly scalable carbon removal companies we’ve seen,” Sonia Tsao, Partner at Canopy Generations Fund said in a statement quoted in our story.

Even the “Coolest Thing Made in Minnesota” contest belongs in this year-in-review lens because it reflects something the startup world sometimes forgets: we still makes things around here, things that people use and need all over the world, and we should take pride in that. 

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How this year’s Minnesota coverage adds up

Put all of this together and our Minnesota 2025 story is less about a breakout moments and more about compounding.

The University of Minnesota and the broader Twin Cities ecosystem keep pushing people toward building earlier. The venture layer keeps getting more organized. Minnesota medtech and health care keep producing both big outcomes and new companies with credible business models. AI is seeping into everything. And the ‘real economy’ sectors like food, energy, manufacturing, climate keep providing the raw material for transformational change that’s grounded in actual markets. 

Like many in the region, Minnesota is trying to turn what it already has into more innovative companies, and to do it without losing its personality along the way. 

Plus, it just might be our favorite 🙂