Companies across North Carolina’s Research Triangle raised $99 million in the third quarter of 2026, marking a steep drop from the region’s average.
Over the last few years, Triangle startups have raised a quarterly total of $498 million across 37 deals, on average. In Q3 of this year, however, there were just 29 funding rounds reported, according to the latest Venture Monitor report from PitchBook and the National Venture Capital Association. Only four of the deals were above $5 million.
It’s not overly concerning to Jason Caplain, cofounder of the software-focused investment firm Bull City Venture Partners, who said investment totals in the Raleigh, Durham and Chapel Hill region have a history of being volatile.
“I’m not gonna make excuses for the region, but I will say the numbers in North Carolina tend to be very, very lumpy,” Caplain told Technical.ly. “We’ll have a quarter where if there’s a couple like big announcements, then the numbers are up. But then all of a sudden, a quarter like this, the numbers slip.”
Few companies bringing in most of the capital is a trend nationally. The median Series D deal in the US this year has been $150 million, up from $100 million last year. Locally, the DC region, Baltimore and Pittsburgh are also seeing that tight funding concentration.
$800k now as a bridge to $75M later
About half of the top 20 deals in the Durham and Raleigh MSAs were in biotech and health. That’s not surprising, since it’s a dominant industry in the region. What was unusual was their size — typically, biotech and health tech startups need a lot of capital to scale.
Deals valued at a few million or below signals that “bridge” rounds are common at the moment, said Mike Carnes, referring to the practice where a startup raises extra cash to hit a critical milestone and get to the next large funding round. Carnes is emerging company development VP at NC Biotechnology Center, a nonprofit specializing in small loans for early-stage startups, many of them in therapeutics.
“One would imagine that those are going to be bridging to value inflection points,” Carnes told Technical.ly. “Within the fourth quarter or early in the year next year we could expect to see some pretty significant financings occur.”
That’s the case for Dignify Therapeutics in Durham, which raised $800,000 this past quarter from one of its founders and a founding investor. The funds are to “keep the lights on” and boost its press relations ahead of raising $75 million, said Executive Chairman Tony Ditonno. He expects to close $25 million by the first quarter of 2027, and the remaining $50 million by the end of 2028.
Dignify Therapeutics is developing two drugs for people in wheelchairs to have more control over bowel and bladder movements, and has received about $20 million in non-dilutive funding from the National Institutes of Health. But since Trump took office, DOGE cuts and unpredictability with funding from the NIH, looking to the federal government has not been as reliable as it once was, Ditonno said.
“It’s getting more and more competitive,” Ditonno said. “That was the reason why we have started this raise.”
The NC Biotechnology Center has its own tracking system for venture capital investments across the state, including changes in stocks, equity and mergers. Carnes flagged that there are some larger Q3 deals that may not yet be on PitchBook’s radar. For example, migraine drug developer Slate Medicines is in the midst of raising $245 million in financing concurrent with a merger with Fulcrum Therapeutics.
Investors want hard data
Dignify Therapeutics started to meet with investors in October, and is finding a thread common for a biotech startup. Investors want information on human trials, not just tests with other animals.
That requires FDA clearance, something Dignify just won for one of its drugs. Ditonno plans to share that info with potential investors as soon as possible.
And with that proof, he hopes larger checks will come.
“If investors like your story, if they think your story has merits, what they really want is the management team to be heads down executing on their clinical plan,” he said. “They don’t want me … running around Wall Street.”
Investor Caplain from Bull City prioritizes founders who were recommended to him. Cold outreach, not so much.
“You’ve got to find the warm introduction. You got to do the work,” he said. “You can’t do the bcc and send it out to hundreds of VC firms.”
Bull City has a fund underway so Caplain isn’t actively raising right now, but is hearing from fellow VCs it’s a tough market due to a lack of exits — limited partners are not getting a lot of cash to redistribute.
Higher interest rates will also make it tougher to build funds, and in turn invest in companies, he said.
“We’re having to carry the companies further because with a scarcity of capital,” Caplain said. “How are we going to manage these companies going forward and make some tough decisions?”
