Austin startup funding cools after record first quarter

Austin startups saw a downturn in funding over the past three months after starting the year with the strongest quarter on record.

Data from Opportunity Austin, the region’s independent economic organization, show local startups pulled in about $771 million in the second quarter, down nearly 23% from the same period last year.

Article continues below this ad

Funding is down more than 81% from the previous quarter, when startups raised $4.2 billion. That performance came on the heels of Austin’s best funding year since 2021, with area companies raising at least $7.8 billion, according to PitchBook and the National Venture Capital Association.

STARTUP NEWS: AI automotive startup Partly moves global headquarters to Austin, plans hiring spree

This quarter’s biggest funding rounds were led by health, defense and food technology companies.

Ollin Biosciences led with a $330 million raise in June. The company, now valued at more than $1.3 billion, was founded in 2023 and develops therapies for eye diseases and disorders.

Fellow health tech startups Legion Health and Insight Health AI raised $16 million and $11 million respectively in the April-June quarter.

Allen Control Systems is now valued at $2.2 billion, thanks to a $200 million funding round in June. The firm develops autonomous robotics and weapon systems for government and commercial customers.

MORE: Austin robotics firm lands deal to expand to Korea, tripling workforce and production

Traysar Technologies, another defense technology startup, raised $25 million in June to aid the development of its subterranean strike and defense system.

AI-powered creative management platform Plot raised $10 million. Frozen One, maker of high-protein, low-calorie ice cream, raised $5.8 million.