Carta+Clutch VC - Texas Seed Report - H1 2025

We're excited to team up with the Carta Insights team and in particular Hamza Shad to present the H1 2025 report on the pre-seed, seed, and Series A market in Texas! There's a lot of data included in the analysis, and here are the points we found the most interesting. What about you?

📈 A new order at seed: Texas overtakes Massachusetts for the first time

It’s easy to miss in aggregate data, but when you isolate seed, Texas now ranks ahead of Massachusetts for the first time, sitting just behind California and New York. This reordering marks a new normal that’s been building for years, and we see this continuing as Texas cements its spot as the third largest state for VC funding in the coming years.

🚀 Pre-seed is picking up steam—signaling explosive growth ahead

Texas’s pre-seed engine is in high gear, with formation activity rising across Austin, Houston, and Dallas. A swelling pre-seed funnel is the classic leading indicator of a bigger wave of seed and Series A rounds over the next 12–24 months.

💎 Valuation caps are competitive in Texas

At pre-seed, Texas median valuation caps match—if not surpass—other leading states, indicating similar demand for early-stage teams and ideas. At Clutch, we believe that this is a strong indicator that we have high quality companies at pre-seed in Texas.

🏙️ Beyond Austin: Houston and Dallas are robust, too

Houston and Dallas both rank in the top 20 U.S. startup hubs, and deal volumes remain steady in both cities. Texas’s momentum is multi-city, not just an Austin story.

🤖 A diverse, resilient ecosystem—led by Hardware and SaaS/AI

Texas is sector-diverse—hardware, SaaS (and AI), biopharma, healthtech, and energy all matter—giving the state resilience through cycles. Within that mix, hardware is the biggest recipient of venture dollars in the state. Quick note that SaaS includes core AI though some of the other categories may include AI as well.

There's plenty more to dig through. You can download the full report here:

Thanks again to the Carta Insights Team for their partnership in putting together this report!