Swing States Are Also In The Middle For Startup Funding

In next week’s election, seven swing states will likely deliver the deciding vote in choosing the next U.S. president.

But it’s not only narrowly divided politics that the group shares in common. From a startup funding standpoint, the swing states of Pennsylvania, Michigan, North Carolina, Wisconsin, Georgia, Nevada and Arizona are also all middle-of-the-road players.

In other words, none of the swing states are home to the biggest hubs for venture investment. Those would be California, Massachusetts and New York, all solidly blue states.

By the same token, the swing states are also not “venture deserts,” where large funding rounds rarely happen. That category includes sparsely populated states and ones without large metros or leading research universities.

Rather, the swing states are all home to some prominent venture-backed companies. Below, we look at how each startup ecosystem looks today.

Pennsylvania

The swingiest of swing states, Pennsylvania is arguably the most tightly contested in this election year, as evidenced by both campaigns’ prodigious spending and event scheduling there.

From a venture funding standpoint, the Keystone State also stands out for having two metro hubs — Philadelphia and Pittsburgh — that are 300 miles apart and best known for launching different kinds of startups.

Philly, as we chronicled in a Superbowl-themed story last year, excels in biotech and healthcare. Well-known startups or one-time startups based in the area include Spark Therapeutics and Dbt Labs. Pittsburgh, meanwhile, is well-known for robotics and autonomous vehicles and is home to Argo AI and Duolingo.

Michigan

Michigan, of course, is closely associated with the auto industry, and this is reflected in its best-known venture-backed companies.

Electric vehicle-maker Rivian, which went public in the biggest offering of the year in 2021, is probably the most recognized name, even if its stock is trading at a fraction of its former highs. Other well-funded Michigan startups include autonomous vehicle technology developer May Mobility and battery company Our Next Energy.

So far this year, Michigan-based companies have raised about $580 million in seed- through growth-stage funding, Crunchbase data shows.

Eastern Michigan remains the heart of the state’s startup ecosystem, with the highest concentration of companies in Ann Arbor, Detroit and points in between.

North Carolina

From biotech to fintech to gaming, North Carolina boasts deep talent pools in myriad sectors. Nonetheless, when it comes to private fundraising, a single company, Epic Games, has a habit of dominating the headlines.

Over the years, Cary, North Carolina-based Epic has raised close to $8 billion in private funding including, most recently, a $1.5 billion Disney-backed corporate round. Like many of the state’s other tech players, it’s based in the Research Triangle region, home to both Duke University and the University of North Carolina at Chapel Hill.

Not including Epic, North Carolina companies raised $1.34 billion in seed through growth financing so far this year, per Crunchbase data. Top funding recipients include data integration provider CData Software, drug developer Pathalys Pharma, and HR platform Oyster.

Georgia

With more than 6.3 million people, the Atlanta region is now the nation’s sixth-largest metro area. That goes to say, there’s plenty of startup talent around.

Even so, Georgia hasn’t historically been a heavy hitter in venture funding. That holds true this year as well, with just shy of $700 million going to Peach State companies across stages, per Crunchbase data.

Still, we are seeing some good-sized rounds. Companies that closed such financings this year include several Atlanta companies: pool-cleaning robot maker Aiper, payroll platform OnPay, and EV charging provider EnviroSpark.

Arizona

Arizona is known for attracting a lot of relocating Californians. However, they haven’t brought much of their venture capital with them.

So far in 2024, the Grand Canyon State has pulled in just over $550 million in startup equity funding across stages. That puts this year on track for the lowest annual tally in several years, driven in part by fewer large cleantech- and real estate-related deals.

Nonprofit fundraising platform provider Virtuous Software picked up the year’s largest round, with a $100 million September financing. Other big deals include a Series D for biotech Nectero Medical and a Series A for battery developer Sion Power.

Wisconsin

Wisconsin is known as America’s Dairlyland, not America’s Startupland. Nonetheless, the state has a pretty diversified startup scene, with well-funded companies in areas from e-commerce to biotech.

Among the most heavily capitalized is Madison-based Fetch, a shopping rewards app that has raised over $550 million in equity funding and secured $50 million in debt financing this year.

Another is Janesville-based Shine Technologies, a developer of nuclear medicine and fusion technology that has raised over $500 million in venture and grant funding.

So far in 2024, Wisconsin-based startups have raised just over $287 million in venture and grant funding, Crunchbase data shows. The largest round was a $55 million January Series C for Madison-based Elephas, which is developing an advanced imaging platform to predict response to immunotherapy.

Nevada

Nevada is the smallest startup ecosystem of the swing states. So far this year, just around $121 million in seed through growth financing went to companies headquartered in the state, according to Crunchbase.

Yet while small, Nevada’s startup scene is pretty varied, with companies spanning sectors from cleantech and EVs to fraud detection and fintech to manufactured housing. Among Nevada startups, Redwood Materials, the Carson City-based battery recycling startup, is the biggest fundraiser, with $3.8 billion to date in debt and equity financing.

Funding does not appear to be a predictor

Looking at forecasts of how the swing states will swing this year, it’s clear no one is positing that statewide venture funding will play much of a role. Candidates prefer to talk about things like grocery prices, not Series A valuations. And as far as I can tell, that’s probably a good thing.