Venture capital funding in the United States has increased this year, driven by the AI investment boom. But not all regions shared the gains equally.
Among the top states for startup funding, California saw by far the largest increase in total investment. Others — including Colorado, New Jersey and New York — are also up for the year, according to a Crunchbase analysis of startup funding by state.
However, some of the big venture capital hubs are in decline. The standout case is Massachusetts, where startups generated just over $10.7 billion in 2024, well below last year’s pace.
For an overview, below we present funding totals for the eight states that have received $2 billion or more in venture capital funding so far this year.
Wins go to states with heavily funded generative AI startups
Of course, there are many complex dynamics at play in determining why a particular state or metropolitan area might see its startup investment fortunes increase or decrease. However, in 2024, there was also a simple explanation for the method of financing: generative AI.
To a large extent, the biggest rounds of the year have been about a handful of AI companies working on large language models and the underlying technologies to scale them. And it turns out that these startups are heavily concentrated in Northern California.
Most of these names are familiar: OpenAI, xAI, Anthropic, Safe superintelligence And Evolving AI collectively, more than $15 billion has been raised this year alone. And all of them are based in the San Francisco Bay Area.
Other states home to investor-favorite AI companies also rose in the rankings. Funding for New Jersey startups, for example, has already increased 37% year-over-year, driven primarily by cloud infrastructure company AI. CoreWeavewhich raised $1.1 billion C Series in May.
Massachusetts and Texas see declines
And then there is Massachusetts. While Boston’s startup scene is famous for its biotech and deep tech talent, the city lags behind other hubs when it comes to creating ultra-high-valuation AI unicorns.
This may explain why total funding for Massachusetts startups so far this year is down about 23% from the 2023 total. Although we should see some catch-up in the final weeks of the year, the year nevertheless promises to be a slack year.
This is not necessarily a worrying indicator. While no Massachusetts company has secured a funding round of $1 billion or more this year, there have been at least 30 valued at $100 million or more. This includes an amount of $405 million F Series for battery technology company Energy of form and 400 million dollars Series A for obesity drug developer Kailera Therapeutics.
Texas also appears on track for a down year, with about $4.8 billion allocated to Lone Star State startups so far in 2024, compared to $6.2 billion for all of 2023. Again, it’s time to catch up, but the chances of doing so are relatively high. thin at this point of the year.
While there have been no fundraising rounds of $1 billion or more for Texas startups, at least seven have closed funding rounds of $100 million or more this year. The largest included an amount of $244 million D Series for a Houston-based geothermal energy startup Fervo Energy and a $232 million C Series for an Austin-based endpoint security provider NinjaOne.
Washington, with just over $2.5 billion in funding to date, also appears on track for a year-over-year decline. Biggest fundraisers this year include $144 million Series B for cell therapy developer Biography in advance and 140 million dollars C Series for safety start Chain guard.
In other states, funding appeared more stable
In three other states – New York, North Carolina and Florida – funding appeared more stable.
New York is indeed up slightly, boosted by a An advanced financing round of a billion dollars for cybersecurity provider Ace. Florida, for its part, is down slightly, perhaps because of the lack of large rounds for crypto and Web3 related companies so far this year.
Then there’s North Carolina, which appears to have had a positive year based on its turnover. However, most of the total came from a single round: a $1.5 billion investment. Disney investment in a 33 year old man Epic gameswhich is still private but too old to fall into the startup category. Without this agreement, funding would have been stable.
Remember: it is not easy to develop a new technological center
One of the key takeaways we can draw from this year’s public funding tally is that while we have great enthusiasm for emerging startup hubs, it takes more than enthusiasm to turn Silicon Valley around.
Northern California’s combination of deep tech talent, strong integrated networks, rich capital resources and powerful universities remains unmatched in its ability to scale transformative startups. It’s still where investors spend the most of their money, by far.
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Illustration: Dom Guzman
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