Holy Toled…oor… Ann Arbor! 📈

⏰ Midwest Minute 

Our ninth annual Best of the Midwest: Startup City Rankings are here, and we tapped our resident data wizard, Sam Cavender, to break down what’s really happening in the numbers. With 25 weighted variables pulled from 16 data sources, the rankings look at each city’s startup activity, access to resources and business climate. One headline? Ann Arbor cracked the top 5 for the first time, nudging Columbus down to #6. And if you know anything about the Michigan–Ohio State rivalry… let’s just say Columbus probably isn’t thrilled. Below, Sam shares a few surprises from this year’s data and what trends are worth keeping an eye on.

Patterns Across the Top 10:
Looking at this year’s top 10 cities, a few clear patterns emerge. Unsurprisingly, having a lot of startups is the one of the single strongest drivers of a city’s ranking—it also carries the heaviest weight in our overall scoring (18%). Total capital invested is another powerful factor, ending up as the most correlated variable overall even though it only accounts for 7.5% of the score (4th heaviest weight). Local VCs, while weighted at just 4.5%, also play an outsized role, having investors and capital close to home clearly aligns with strong performance in other key categories. On the other hand, some variables don’t move the needle as much. Government programs (8.5% weight) show little correlation because most operate at the state level, which limits city-to-city differences. We still love seeing these programs in action because they provide critical behind-the-scenes support for startups and can help align incentives to help an ecosystem thrive. And while labor costs remain a weaker predictor, we did notice larger cities closing the gap with historically lower-cost markets this year.

A Surprising City:
Madison, WI, was one of this year’s surprises for me, slipping to #9 after climbing to #7 last year. Since 2019, the city has bounced between those two spots, and I expected last year’s upward trend to continue. But the numbers told a different story: Madison lost relative ground in categories like total startups, startup density (especially important for college towns) and startup momentum. On the bright side, capital invested improved—this could be a sign of future gains to come. Madison’s startup scene is active and collaborative, so I see this as a temporary dip rather than a long-term stall, and think they'll resume their climb next year.

An Underrated Metric:
One of my favorite metrics to watch is startup momentum, which tracks how quickly new startups are forming. It’s a view into who’s taking the most “shots on goal” and expanding their ecosystem’s surface area for future wins. Ann Arbor is a great example: its momentum score leapt from 11 to 26 to 46 over the last three years, helping it break into the top 5 overall for the first time. Already strong in VCs, capital invested and exits, the city now has a wave of new startups that could push it even higher. Momentum also reveals under-the-radar ecosystems on the rise—Lincoln (#15), Lansing (#24) and Omaha (#16) all punch above their weight here, hinting that their next chapter of growth is already underway.

Have any insights into the Midwest ecosystem or a funding announcement to share? Want to share your thoughts on this year’s rankings? Send us an email: [email protected] 

📰 Notable News

Featured

• 2025 Best of the Midwest: Startup City Rankings

Exits

• Chicago + Miami-based Rentgrata was acquired by Opiniion for an undisclosed amount

• Indianapolis-based Scale Computing was acquired by Acumera for an undisclosed amount

• St. Louis-based Offshift was acquired by Project 61 for an undisclosed amount

Startup Funding

• GeoWealth - $38M Series C led by Apollo | Chicago

• Pantomath - $30M Series B led by General Catalyst | Cincinnati

• FloVision Solutions - $8.7M Series A led by Insight Partners | South Bend, IN

• JotPsych - $5M Seed led by Base10 Partners | Cleveland

• Pearl Edison - $3.3M Seed led by New Systems Ventures and Commonweal Ventures | Detroit

VC Funds

• North Dakota Growth Fund - $150M Commitment | North Dakota

• Detroit Startup Fund - $700K Startup Fund | Detroit

Other News

• Lincoln surpasses Omaha in 2025 Best of the Midwest Startup Ecosystem Rankings

• Ann Arbor tops Detroit in new ranking of best Midwest cities for startups

• World Business Chicago announces returns of the Chicago Venture Summit Future of Food

• Fargo, North Dakota, Is A New AI Hub In The Midwest Tech Boom

• The University of Chicago Partners with Bay Area Accelerator to Launch Alchemist Chicago

• NXTUS announces finalists for NXTSTAGE Community Health & Vibrancy Pilot Competition

• IBM expands support for Chicago's quantum startups

• Seen and Heard at TechChicago Week 2025: Founder Advice, Fundraising Tactics and a Little Soccer

• Novy Enters Creation Stage on First Portfolio Company

• High Alpha’s SaaS Benchmark Survey is now live!

Have exciting news to share? If you're announcing a funding round, exit or other milestone, send your press release to [email protected]. While we can’t share everything, we love to feature great stories from across the region.

📆 Mark your Calendar

Need to fill your social calendar? We’ve scoured newsletters, scanned LinkedIn and found some of the latest tech + startup events in the region. Know of any upcoming events and want to share them in our next newsletter? Send us an email: [email protected]