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A rising tide may lift all boats. But lately it lifts California boats the most.

In 2025, only two states with a sizable venture scene saw a year-over-year gain in their share of U.S. venture funding: California and Washington. This held true even though several others, including New York and Texas, actually saw a pretty big bump in investment.

What gives? Well, last year saw a dramatic upward swing in North American venture investment, with annual startup funding up 46%. Artificial intelligence was the driver, with most investment going to companies in AI-related categories.

Not all geographies benefited equally. Across all categories, California drew the largest share of investment, at 64%. The next runners-up were New York, Massachusetts and Texas.

Overall, there were six states that captured 2% or more of U.S. venture funding last year, per ½ûÂþÌìÌà data. That’s a small group, but it’s not too atypical, as a few hubs reliably attract virtually all the capital.

To illustrate, we charted how investment share for the top six states breaks down over the past two calendar years.

Funding also rose year-over-year for each of the six states, as we chart below.

Deals and sectors that drove gains, by state

Leading sectors and rounds varied broadly by state. We previously covered the California companies whose huge funding hauls drove gains. Here are leaders in the other top states:

New York: For the second-largest funding hub, two of last year’s biggest funding rounds went to predictions marketplaces and . AI coding startup and food delivery provider were also investor favorites.

Massachusetts: The Boston area is known for its deep-tech prowess, and this showed up in the funding tallies. Fusion energy pioneer was the biggest funding recipient, followed by , a developer of brain-computer interfaces, and , which is focused on weight loss drugs.

Texas: Austin companies topped the list for Texas funding rounds last year. This included , a provider of residential backup battery systems, and , a developer of autonomous naval and maritime vessels.

Washington: The Pacific Northwest powerhouse has a fairly diversified startup scene, as evidenced by the largest funding recipients.These include nuclear power company , and reusable rocket developer .

Colorado: There’s very little snow in Colorado this winter, but plenty of capital has accumulated. Lead funding recipients include AI infrastructure company , which secured a $1.4 billion Series E in October, and quantum computing startup , which raised a $600 million Series B.

Other states

OK, so you may have noticed that there are 44 other states we didn’t discuss and which also do attract some startup investment.

This includes five that are under 2% of national funding but still pulled in over $2 billion last year:  Florida, Pennsylvania, Illinois, North Carolina and Virginia.

Seven others — Utah, Tennessee, Maryland, Ohio, Minnesota, Georgia and New Jersey — attracted $1 billion or more in startup funding last year and most saw year-over-year gains.

But because venture is so heavily concentrated elsewhere, these 12 states only drew about 11% of all nationwide investment. 

Catalysts for change?

There’s no law, of course, that says venture investment must remain so geographically concentrated. Certainly there are base characteristics that make for a sustainable startup hub, including well-regarded research universities and a concentration of tech and biotech talent and employers. But a number of places meet these baselines, making them potentially fertile ground for greater investment.

Of late, however, capital seems to continue to concentrate on bold new ventures in the biggest existing hubs.

Related reading:

• What’s Fueling California’s Record Run For Startup Funding?
• North American Startup Funding Soared 46% In 2025, Driven By AI Boom

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