California, Massachusetts, Utah lead in US private equity penetration

California, Massachusetts, Utah and New York are the US states with the highest proportions of private equity- and venture capital-backed enterprises, S&P Global Market Intelligence data shows.

California had 347,564 private enterprises, with 24,228 backed by private equity, resulting in a penetration rate of 6.97%, the highest in any state.

Massachusetts' private sector is made up of 70,115 enterprises, with 6.11% backed by private equity.

Utah and New York have private equity penetration rates of 4.98% and 4.50%, respectively.

Overall, the private equity penetration rate in the US is 3.49%. The penetration rate has climbed from 3.47% in September 2023, when Market Intelligence last tracked the criteria. As of Aug. 11, the US private sector was comprised of 2,374,567 enterprises, with 82,927 owned by private equity. In 2023, private companies totaled 1,802,811, of which private equity owned 62,489.

Wyoming had the most notable increase in penetration rate, rising to 3.16% in 2025 from 2.15% in 2023.

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Sector breakdown

Companies in the technology, media and telecommunications (TMT) sector account for approximately 44% of those with private equity ownership, with California hosting 13,403 such companies, the highest in any state.

From 2023 to 2025, the number of private equity-backed TMT companies in the US grew by roughly 35% to 36,562. New York, Texas, Massachusetts and Florida also have over 1,000 TMT companies each.

"Private equity and venture capital investors tend to be attracted to states with a concentration of high-growth sectors such as technology, renewable energy, life sciences, healthcare and logistics," Don Zambarano, KPMG US private equity sector leader, wrote in emailed comments.

Innovation ecosystems such as research universities, incubators and public-private innovation programs, as well as factors that reduce operating costs so that companies can scale efficiently, also drive private equity investments, Zambarano added.

Rounds of funding

The overall value of venture capital and private equity rounds of funding surged 61% to $183.26 billion in 2024 from $114.05 billion in 2023.

However, transaction volume declined 15% to 5,229 deals from 6,125 in the previous year.