While San Francisco has earned a reputation as a dystopian left-wing policy disaster, it remains the hottest spot for tech funding in the US. This is according to a recent report from Tracxn, which claims that in California $94.8 billion was raised in the first six months of 2025, with 78% of all funding landing in SF. Palo Alto came in a distant second.
According to the report, the funding was a sharp increase compared to H2 2024 when $61.8 billion was raised and a 140% incrase from the $39.6 billion raised in H1 2024.
The report states that the increase was driven by a surge in later-stage funding rounds.
As outlined:
- Seed Stage saw a total funding of $1.5B in H1 2025, marking a drop of 45% compared to $2.8B raised in H2 2024, and a 12% decline from $1.7B in H1 2024.
- Early Stage witnessed a total funding of $12.7B in H1 2025, an increase of 38% compared to $9.2B in H2 2024, but a 33% drop compared to $19.1B in H1 2024.
- Late-stage funding dominated the landscape, with $80.7B raised in H1 2025, up 62% from $49.8B in H2 2024 and a staggering 331% increase compared to $18.7B in H1 2024.
Additionally:
- Enterprise Applications, Enterprise Infrastructure and Aerospace, Maritime and Defense Tech were the top-performing sectors in H1 2025 in this space.
- Enterprise Applications emerged as the top-performing sector, raising $72.0B in H1 2025 an increase of 74% compared to $41.3B in H2 2024 and a rise of 198% from $24.1B in H1 2024.
- Enterprise Infrastructure saw a total funding of $5.6B in H1 2025, down 65% from $16.2B in H2 2024 but up 29% compared to $4.4B in H1 2024.
- Aerospace, Maritime and Defense Tech sector saw a total funding of $4.0B in H1 2025, which is an increase of 55% when compared to $2.6B raised in H2 2024, and a rise of 549% when compared to $622.1M raised in H1 2024.
AI, or artificial intelligence, is buried in these numbers. The report would have benefited from a more precise breakdown, but it notes that companies like OpenAI, Scale, Anthropic, Anduril, and SSI raised over $100 million during this period.
OpenAI raised a total of $40 billin in a Series F round, Scale secured $14.3 billion in a Series G round, and Anthropic raised $3.5B in a Series E round.
There were 13 unicorns created in H1 2025, marking a 28% decline from 18 in H2 2024 and a 23% drop from 17 in H1 2024. Chime, Omada, Hinge Health, and SmartStop Self Storage were among the companies that went public in H1 2025.
Y Combinator, Andreessen Horowitz, and Sequoia Capital were the top investors in the California tech ecosystem in H1 2025.
Y Combinator, South Park Commons, and General Catalyst were the most active seed-stage investors.
Khosla Ventures, Lightspeed Venture Partners, and Bessemer Venture Partners led early-stage investments.
Bond Capital, Prosperity7 Ventures, and DST Global Partners were the top late-stage investors in the region.
Among VCs, US-based Sequoia Capital led the most number of investments in H1 2025 with 22 rounds, while another US-based fund, New Enterprise Associates, added 13 new companies to its portfolio.
Late-stage VC investments saw Bond Capital and Saudi Arabia-based Prosperity7 Ventures add 2 and 4 companies, respectively, to their portfolios.