North Carolina startups raised about $2.3 billion in venture capital funding in 2025, a decline of more than 40% from the year before, according to data compiled by PitchBook. The drop pushed the state to 15th nationally for total venture investment, down from seventh in 2024, marking one of the sharpest year-over-year declines among major startup markets.
The pullback follows several strong years for North Carolina’s startup economy, particularly in biotech, software and health technology. Those sectors have become an increasingly important source of high-wage jobs and research activity, especially in the Triangle and Charlotte regions, even as venture markets nationally have become more selective.
Higher interest rates, continued market uncertainty and a heavy investor focus on artificial intelligence reshaped dealmaking in 2025. National venture investment rebounded to its highest level since 2021, but much of that growth was concentrated in a small number of massive AI funding rounds rather than broad-based gains across regions.
North Carolina’s year-over-year drop was magnified by the absence of a single blockbuster transaction. In 2024, Cary-based Epic Games raised $1.5 billion from Disney, a deal that alone accounted for a substantial share of the state’s venture total that year. Epic did not raise capital in 2025, creating a comparison that exaggerates the extent of the slowdown.
Despite the decline, venture investment in North Carolina remains well above historic levels. Funding last year was still more than 50% higher than in 2015, underscoring how much the state’s startup ecosystem has expanded over the past decade as universities, health systems and research institutions feed new company formation.
A recent Southeast venture report from BIP Ventures found North Carolina’s investment environment has been less volatile than many peer states. Analysts cited a maturing mix of later-stage biotech firms, enterprise software companies and a growing base of repeat founders as stabilizing forces.
Joe Mancini, a managing partner at Cary-based Front Porch Venture Partners, said he expects continued deal flow across North Carolina and the broader Southeast in 2026. His firm is raising a third fund and plans to back roughly a dozen startups this year.
“These are fast-growing ecosystems,” Mancini said. “The talent pool is deeper than ever. Early founders are spinning out new companies behind them, and that momentum compounds over time.”
California continued to dominate venture capital nationally, with startups there raising $210 billion in 2025, roughly 62% of all U.S. venture funding, driven largely by a handful of high-profile AI deals.
For the state, the latest numbers point to a cooling year rather than a reversal. Venture funding may fluctuate, but the state’s startup economy is larger, deeper and more durable than it was a decade ago.
