March Brings Continued Funding Momentum for NY Startups

Our focus on New York’s startup scene continues as we review key funding data from the end of Q1. Compared to February, March concluded with more than $1B flowing into the ecosystem, a 14.3% boost, according to AlleyWatch.

Early-stage and Series A deals were notably strong, accounting for 17.8% and 19.0% of total U.S. funding in their respective categories. This demonstrates continued confidence in the city’s early innovation pipeline. Though NYC’s share of late-stage funding dropped to just 0.8%—largely due to OpenAI’s colossal $40B round elsewhere—the underlying strength in seed through Series B activity points to renewed investor interest in nurturing the next wave of breakout startups. Despite headwinds, the ecosystem’s foundational energy remains intact, suggesting NYC’s startup momentum is finding its footing early in 2025.

New York is a QSBS goldmine. The state recognizes the exemption at every level, meaning Federal, State, and local/city income taxes are brought to $0 when QSBS is claimed.

Several standout companies secured substantial investments across emerging sectors in March. Odeko led the pack with a $96M Series E to expand its software platform for independent cafes, signaling continued interest in tech that empowers small business operators. Dataminr followed with $85M via a convertible note, reinforcing the critical demand for real-time AI-driven risk detection tools. Meanwhile, Aescape pulled in $83M for its AI-powered robotic massage systems—illustrating investor enthusiasm for tech-driven wellness.

Gaming and sports also made a splash, with Underdog Fantasy landing $70M in Series C funding to fuel its growth in daily fantasy and esports markets. Carbon Arc, a startup focused on structuring raw data into real-time insights using AI, raised $56M in an unclassified venture round.

Other notable rounds included Graphite ($52M) for dev tools and code review, Norm AI ($48M) tackling regulatory automation, and Campus ($46M), which is building a flexible online college experience. These rounds collectively showcase NYC’s continued strength in AI, health tech, software, and digital infrastructure—fueling optimism that startup momentum will carry through Q2.