Wisconsin Startup Funding: Q3 2025

According to the data from Dealroom, Wisconsin startups raised just $18 million in Q3 2025, marking the state’s lowest quarter in approximately decade.

That compares to $66.3 million in Q2 and $131 million in Q3 2024, a steep drop by any measure.

But before anyone starts sounding the alarm, it’s worth remembering: in the Midwest, one misplaced round can completely rewrite a state’s quarter and how it compares with the historical context.

The Reporting Conundrum

In Q2 data, we included C-Motive Technologies, the 12-year-old Madison company developing electrostatic motors, had raised a $13.5 million late-stage VC round. The public announcement came on July 7, but our research placed it across May and June.

In smaller ecosystems, timing matters.

Because Q2 closed on June 30, and the official announcement didn’t come until a week into Q3, we faced a data dilemma.

After some back-and-forth, we made the call to leave it in Q2’s numbers, where it chronologically belongs.

That single decision meant the difference between two very different headlines, in both this quarter and the previous. By keeping it in Q2, that quarter was up 49% versus Q1, and 13% year-on-year. 

If we had included C-Motive in Q3, Wisconsin’s total would have hit $31.5 million - still modest, but less grim. Even at that level it’s the lowest since Q1 2020.

As it is though, Wisconsin’s Q3 becomes the lowest in ten years.

Without C-Motive, the top four disclosed raises tell a smaller but still interesting story.

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A Midwest Slowdown, But Not a Collapse?

It’s also not just Wisconsin.

Across the Midwest, Q3 2025 numbers were among the weakest since early 2020,  that awkward period when the world was stuck indoors and most everything slowed down.

Nationally, Q3 was close to the heady days of 2021 and 2022, but the distribution tells a bigger story. Unlike then when the distribution was wider, most of the capital continues to be sucked into a handful of colossal AI rounds, led by Anthropic, OpenAI, and xAI. Together, those three companies accounted for $28 billion of California’s total of $51.5 billion.

The result of all this? Coastal averages climb while heartland medians fall.

This time last quarter, the Midwest actually bucked the national trend. But the pendulum appears to have swung back.

Global Context

Zoom out even further and the divergence gets stranger.

The U.S. activity was matched by countries like Israel, the U.K., and France all posting near-record quarters. 

So are we lagging in the Midwest? Or are we simply adjusting to a new cycle?

In the cultural side of startup building, founders like Ben Kvalo of Midwest Games are proving that Wisconsin can export creativity just as much as code. His studio is helping build a new category of gaming that feels unmistakably regional, an antidote to the homogenized stories of the coasts.

We’ll share more about that in his upcoming Founder Story, but for now, his seed round was one of the few bright spots in a challenging quarter.

The Road Ahead

Every ecosystem has quarters like this. Messy, lopsided, quiet. But the macro situation indicates that things may change in the next few months. As we head into the final quarter of 2025, with national interest rates holding steady and AI capital trickling into applied industries, it’s entirely possible we’ll see a catch-up effect.

If the last ten years of data have taught us anything, it’s this:You can’t measure momentum by any individual single quarter.