Venture capital investment in the New York City metropolitan area reached $28.5 billion in 2024, making it the second largest market for VC funding in the United States with 13.3% of the national total, according to a report released by State Comptroller Thomas P. DiNapoli. The report noted that the amount invested in the region has more than doubled since 2015, with individual deals valued at more than $50 million driving growth nationally.
“As the financial capital of the country, New York City is a natural hub for venture capital investing and the latest numbers bear that out,” DiNapoli said. “State and local officials should look at ways to make New York City’s business environment even more attractive to investors and support entrepreneurs that lack access to capital, especially as larger deals divert funds from startups hoping to establish themselves and spur growth in the area’s economy.”
After a period of stabilization following a record high in 2021, venture capital investment surged again in late 2024. In the first quarter of 2025, deal activity across the United States totaled $92.9 billion, marking the second-highest level on record. Deals over $50 million accounted for a larger share of total dollar value, increasing from 56.9% in 2019 to 68.7% in 2024.
Growth has been largely driven by investments in artificial intelligence (AI). The sector’s share of nationwide investment nearly tripled from 16% in 2021 to 45% in 2024. Of the top five VC firms investing in AI, four are based in California and one is located in Norwalk, Connecticut, which is part of the New York City metropolitan area.
While Silicon Valley remains the leading region for venture capital investments due to its established software industry, New York City holds a strong second position among U.S. metro areas for overall VC activity. In 2024, New York City saw more transactions than Boston and Los Angeles combined, and a higher investment value than Boston, Los Angeles, and Philadelphia together.
National investment in software companies grew significantly from $28.6 billion in 2015 to $100 billion in 2024, representing nearly half of all VC funding that year. In the first half of 2025, software companies accounted for 57.8% of total VC investment, with over $94 billion invested.
Within New York City, the software and tech services sector represented 52.4% of VC activity in 2024, up from 37.6% five years earlier. From 2020 through 2024, these sectors made up more than half of all local VC investment, totaling over $44 billion and supporting at least 13,000 jobs.
Investor preferences have shifted toward larger deals, particularly those supporting AI-related firms. Deals valued at $25 million or less fell from 75.7% of all deals in 2019 to 59% by 2024. Conversely, deals worth over $50 million rose from representing 56.9% of total dollar value in 2019 to 68.7% in 2024.
In the first half of 2025, deals exceeding $100 million more than doubled compared to the previous year, reaching a record $113.6 billion. The average size of these “mega deals” increased from $261 million to $541 million year-over-year.
The report also highlighted progress for female-founded companies in the New York City area, which raised $955 million through 143 deals during the twelve months ending June 2025—outperforming San Francisco during the same period. However, the shift toward larger deals has made it harder for newer startups and businesses led by women or minorities to access early-stage funding.
Recent federal legislation is expected to positively affect VC activity by expanding tax exemptions for qualified small business stock and allowing upfront deductions of research and development costs rather than requiring amortization over five years. The new law also introduces a tiered gains-exclusions schedule with a higher tax-free cap of $15 million.
However, some provisions could negatively impact certain sectors: taxes on university endowments have been increased through a new tiered system that can reach up to 8% for elite institutions; cuts to Medicaid may affect healthcare startups; and the removal of electric vehicle and clean-energy credits could challenge related enterprises.
New York State has taken steps to encourage venture capital growth through initiatives such as the Empire AI consortium—a $400 million public-private partnership created under the State Fiscal Year 2023-24 budget—to support research and development of AI technologies within the state.
The New York State Common Retirement Fund, overseen by Comptroller DiNapoli, has also committed funds through its In-State Private Equity Investment Program to support technology-based startups and companies seeking expansion capital across New York State. Approximately $1 billion has been invested into over 450 companies within New York City as part of this program.
Beyond AI and tech services, financial services firms continue to attract significant local venture funding. The city’s status as a media hub and headquarters location for pharmaceutical and consumer-focused companies is expected to create further opportunities for emerging startups.
The full report “Venture Capital Investment in New York City” is available online along with related reports on technology sector trends and trade flows in the region.
