Massachusetts startups raised $16.7 billion last year from venture capital investors, a 12 percent increase from 2024, marking the strongest improvement since the market collapsed during the pandemic.
But the Massachusetts recovery was slower than most other states with significant startup activity, according to a quarterly report released on Thursday by market tracker PitchBook and the National Venture Capital Association. California companies raised 82 percent more than they did in 2024, Texas startups 72 percent more, Florida companies 48 percent more, and New York companies 22 percent more.
Massachusetts lost its place as the second-largest startup funding market to New York over a decade ago. Texas is now gaining fast: In 2024, Massachusetts companies raised almost $8 billion more than those in Texas; last year, the gap shrank to about $4 billion.
Nationwide, startups raised a total of $339.4 billion, up 59 percent from 2024, according to the report. The total was bolstered by several massive fundraisings for leading AI companies. California-based OpenAI, which developed ChatGPT, raised $40 billion in March to lead the pack.
The largest local deals of the year included $622 million raised by Watertown-based biotech firm Treeline Biosciences, $600 million raised by biotech firm Kailera Therapeutics in Waltham, $453 million raised by Boston autonomous vehicle developer Motional, and $250 million raised by AI music startup Suno in Cambridge, according to the report.
Part of the challenge in Massachusetts was that while funding boomed for tech startups in artificial intelligence, the market for life sciences startups remained subdued. That was also evident in North Carolina, another hub of biotech activity. Startups there raised 40 percent less in 2025 than the year before.
Nationwide, biotech startups raised $36.3 billion last year, about the same as in 2024 and down from a peak of $55.1 billion in 2021. The report did not include a sector breakdown of fundraising for each state.
Only 32 deals funded all-female teams in the region in 2025, which included startups based in Massachusetts, Rhode Island, New Hampshire, and Connecticut, according to the report. With 1,063 startups funded across those four states last year, that represented about 3 percent of all deals.
As for VC firms themselves, no recovery was in sight in Massachusetts. Local investment firms raised $3.1 billion, less than half the amount raised in 2024 and down from a peak of $16.4 billion in 2021. The 2025 total was the lowest since at least 2015, when VC firms raised $3.8 billion, the oldest data included in the report.
Nationally, VC firms raised a total of $66.1 billion, down 35 percent from 2024 and the lowest amount since 2017.
Sign in to read the full article.
Sign in with Google