Baltimore-area venture capital investment dipped slightly in the final quarter of 2025, pushing total funding below last year’s level.
Companies in the region raised $88.6 million across 12 deals in Q4, with two transactions accounting for roughly half of the total, according to the latest Venture Monitor report from PitchBook and the National Venture Capital Association.
Much of the 2025 investment flowed through later-stage funding rounds, with deals clustering among more established companies. The market is still recovering from the VC boom of 2021, when investors learned that funding too early can be a risky endeavor, according to Mike Ravenscroft, managing director of the University System of Maryland’s investment fund.
“It’s difficult to convince an investor that you’re doing something genuinely unique.”
Mike Ravenscroft, Maryland Momentum fund
“It remains a tough environment to be a startup,” Ravenscroft told Technical.ly. “It’s difficult to convince an investor that you’re doing something genuinely unique.”
The amount raised in Baltimore marks about a 9% decline from the previous quarter, when startups pulled in $97.7 million across 21 deals. In 2025, companies raised $516.8 million over 73 deals, down from $557.7 million across 54 deals in 2024.
The broader region, however, tells a different story. Maryland raised a decade-high $2.62 billion, fueled by back-to-back mega-deals from nuclear energy company X-energy. Without those deals, the state’s totals would’ve largely aligned with 2024.
The Rockville-based firm raised a $779 million Series C1 in Q3, followed by a $700 million Series D in Q4. Amazon’s Climate Pledge Fund anchored the C1 round as part of a partnership aimed at powering future Amazon projects and bringing 5 gigawatts of new power online by 2039.
“Companies like X-energy that are laser-focused on national problems like energy costs and [supplying] the energy to fuel the AI boom are going to see sustained activity,” Ravenscroft said.
In Baltimore, BTS Software Solutions led Q4 with a $40 million round, followed by $25 million raised by life sciences firm Alphyn Biologics. The next-largest deal went to Elixirgen Therapeutics, which raised a comparatively modest $8.2 million.
Investors seek AI and align with federal priorities
Analysts at PitchBook say that a brighter 2026 is largely being driven by investor interest in AI companies. Early-stage companies may even start to see more VC next year, according to the report.
“First financings are estimated to nearly hit the highs of 2021, as are early-stage funding rounds, both of which indicate high investor appetite for developing companies,” the Q4 Venture Monitor report says.
For startups that are not making AI central to their work, fundraising will likely remain challenging, Ravenscroft said.
With the Small Business Innovation Research program, a key source of nondilutive funding, on pause and cuts to federal agency workforces, it’s difficult to find VCs willing to commit before the government does.
Federal downsizing is specifically weighing on life sciences companies’ ability to raise capital, according to Chibueze Ihenacho, CEO of medical device company ARMR Systems.
ARMR Systems still secured funding in 2025, landing the region’s seventh-largest raise last quarter with a $1.1 million contribution to an ongoing seed round. The cash will help fund the manufacturing of the company’s wearable hemorrhage control system.
Though PitchBook reported that overall US deal value reached the decade’s second-highest total last year, investment will continue to follow federal priorities, some analysts say.
“The uncertainty around downsizing the government,” Ihenacho said, “has ripple effects on the [life sciences] market.”
