DC-area startups raised $5.4 billion in 2025, closing in on the region’s decade-high venture capital peak. However, the annual total this time came from just 323 deals, about 25% fewer than four years ago.
That’s according to the latest Venture Monitor report released quarterly by PitchBook and the National Venture Capital Association, which showed $2 billion across 84 deals in the Q4, on par with the previous quarter.
The takeaway: A handful of mega-rounds carried the year, while early-stage fundraising remained uneven. That follows national trends. Half of the deal value in the US was reported by just .05% of the transactions, per PitchBook data.
“Even though the deal flow had a nice uptick in 2025… it is a mixed message for [early-stage] startups.”
Tommy White, AU Veloric Center for Entrepreneurship
“Even though the deal flow had a nice uptick in 2025,” said Tommy White, the director of the Veloric Center for Entrepreneurship at American University, “I would say it is a mixed message for startups, particularly those at the early stages of fundraising.”
One nuclear company accounted for 26% of the region’s entire annual total: X-Energy in Rockville, which raised a $779 million Series C1 in Q3 and a $700 million Series D in Q4.
A couple of early-stage startups in the DMV reported significant capital, too — Foundry Logic, which PitchBook lists as operating in stealth, accrued $166.5 million.
Maryland and Virginia each reported significant statewide investments in 2025. Companies across Virginia raised $2.9 billion, and Maryland firms reported $2.6 billion. Nearby Pennsylvania far surpassed those states, however, at $3.5 billion invested last year.
Energy and defense deals dominate
Regions across the US are dealing with outsized power demands. Investors seem to be catching on to that, and funneling capital to energy companies. Along with X-Energy, with the energy infrastructure startup Emerald AI, which is developing tech related to grid reliability amid the data center boom, reported a $52.2 million seed round at the end of October.
The sector is growing in DC’s MSA, which includes data center capital Loudoun County. Claros in McLean, which is developing hardware and software to funnel more renewable energy to data centers, raised $9.75 million this past year.
Defense tech, long a flagship industry in the region, saw several end-of-year VC deals. Geospatial analytics firm Hawkeye 360 raised $150 million and drone tech company Heven AeroTech reported $100 million after moving its headquarters from Miami to Sterling.
That tracks for Kim Nguyen, partner at the cyber-focused VC firm Blu Ventures.
“The DC area is unique in its concentration of cybersecurity and defense tech/dual use, [and in its] talent and customer base,” Nguyen told Technical.ly. “These sectors will continue to see strong investment and growth.”
Looking forward, Nguyen sees US policies impacting startup ecosystems. Under the Trump administration’s restrictions, for example, immigration was net negative in 2025 for the first time in several decades, according to the Brookings Institute. Nearly half of the Fortune 500 companies in the US were founded by immigrants or their children, per a 2025 report by the American Immigration Council.
“In the past, we … attracted smart and energetic immigrants through our university system and other programs,” Nguyen said. “I am concerned that the sharp reduction in immigration … will drain a lot of dynamism from our economy.”
AI is still hot. But for how long?
Companies with an AI focus continued to attract investment in 2025 — both in DC and across the US.
AI represented 65.4% of deal value and 39.4% of deal count nationally in 2025, according to PitchBook. For White, the director of the entrepreneurship center at American University, this was to be expected and explains the historic amount raised. Investors are continuing to place a lot of bets on AI, he said.
But as these companies start to grow, White said investors will start to be more cautious.
“Are these companies really offering a value proposition to the marketplace that can be truly transformational, or are they simply using AI tools in the marketplace and calling themselves ‘AI tech companies?’ he said. “Startups will really have to make the differential case to investors.”
Nguyen from Blu Ventures agrees that the AI investment surge will eventually see a downturn.
“At some point, I also expect the AI bubble to burst,” Nguyen said. “But there will still be some winners in that sector with outsized returns.”
