Vermont, Hawaii and Arkansas are not on the short list of states that might be home to the next Silicon Valley contender.
However, by one metric price watching – increased enterprise funding – all of those geographies are seeing growth.
Startup investment in most U.S. states is on track for an annual decline in 2024, based on a Crunchbase News evaluation. While overall U.S. funding is growing, the flood of dollars into artificial intelligence firms that has fueled the growth stays largely concentrated in California.
For perspective, below we have tabulated funding so far this 12 months for each U.S. state, comparing it to total funding for all of 2023.
So far this 12 months, several states with smaller startup scenes (defined here as annual funding of lower than $2 billion) have defied the odds and seen significant investment gains. By our count, seven stand out: Arkansas, Connecticut, Hawaii, Kentucky, Montana, Oregon and Vermont.
In some states, the increase is mainly attributable to one really big round. For example, Hawaii based in Maui PrivateerAND Steve Wozniak– a startup that tracks data about objects in space has raised greater than two-thirds of statewide funding price $57 million.
Meanwhile, Vermont saw greater than 90% of its statewide startup investment this 12 months Beta technologiescreator of electrical vertical takeoff and landing aircraft, which secured the purchase of the C series price $318 million. And in Connecticut in Norwalk Infinite reality it earned $350 million, or greater than 40% of the state’s total investments.
And then there’s Arkansas
To date, Arkansas startups have raised $175 million, an increase of nearly 50% over the full-year total for 2023, with gains coming from several larger deals. Much of the financing activity centers around Bentonville, a picturesque town in the Ozark Mountains that also serves as the headquarters of the world’s largest retailer, Walmart.
It went to the largest investment in Arkansas Laravela Bentonville-based web application development platform that made $57 million in one 12 months AvailabilitySeptember round supported by me.
Apparently Laravel wasn’t looking for money. According to Accel, this he took it “a year of perseverance and 21 cold calls” to get up to the founder Taylor Otwell for eggs and cookies in Little Rock. Previously, Otwell had brought the 13-year-old company to profitability.
Another vital round has ended CrispBentonville-based retail data provider. This 12 months, it raised $37 million in equity capital and $30 million in debt financing to scale its rapidly growing business, based on Crunchbase data.
Arkansas healthcare startups have also raised some large rounds. Based in Little Rock Financial panaceawhich provides financial services to physicians and medical practices, raised $24.5 million in Series B funding Enterprises of the Valar. AND Now Diagnosticsa Springdale-based home medical testing provider has secured $22.5 million.
Oregon stood up too
Oregon is also having a relatively strong 12 months, with greater than $600 million in funding to this point, up 77% over the full 12 months last 12 months, based on Crunchbase data. However, 2023 was an exceptionally weak 12 months for a state with a large tech talent base and startup scene.
This 12 months, the largest round went to Bend-based These will likely be biologya provider of development and manufacturing services to pharmaceutical and biotechnology firms that has raised over $200 million under the leadership of Bain Capital Life Sciences.
The next largest expected funding concerns Agile roboticsmanufacturer of humanoid robots, which has reportedly been commissioned for $150 million financing round.
Finding the next startup center
Because funding amounts in smaller enterprise ecosystems are typically dependent on a handful of deals, they have a tendency to be quite variable from 12 months to 12 months. Therefore, it is probably unwise to read too much into one banner 12 months or short-term drought period.
That said, it looks like Arkansas is poised to turn out to be a startup hub with an impressive array of funded firms for a relatively sparsely populated state. The data also looks encouraging for Oregon, Kentucky and other locations where there is room for growth in financing.
For the same reason, we’ll even be tracking states that saw large year-over-year declines, including Missouri, Nevada, and Alabama, to see if startups in these areas can regain investor interest.