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Investment in Pittsburgh’s
technology sector
Trends and highlights:
2015–24
Investment in Pittsburgh’s technology sector
Ernst & Young LLP and Innovation Works, Inc. are proud to present our 13th annual review of Pittsburgh’s technology investment landscape. This report provides a comprehensive review of investment and exit activity in the Pittsburgh region for 2024 and highlights key trends for 2015—24.
Last year was the fourth straight year that Pittsburgh’s tech ecosystem achieved a 10-figure funding total, demonstrating that the city’s tech economy remains resilient through waves of macroeconomic challenges. The region brought in approximately $1.89 billion in funding in 2024, primarily driven by a high volume of corporate and venture capital deals at both early and later stages. That total funding amount is down from Pittsburgh’s 2023 total of $3.12 billion but remains the fourth-highest total on record for the region.
Aggregate venture funding in the US increased from $162.2 billion in 2023 to $209.0 billion in 2024.[1] After a decline in venture funding from 2021 to 2022, and again from 2022 to 2023, this past year’s total US venture investment increase could represent a market recalibration, likely driven by artificial intelligence (AI) tailwinds.
The average disclosed venture capital (VC) deal size in Pittsburgh last year was $16.9 million. The primary drivers of that increase were large VC deals in AI and health care, including a $300 million Series A round for Skild AI, a combined total of $400 million across two raises for Abridge, and a few smaller raises ranging from $25 million to $40 million each for Noveome Biotherapeutics, PeopleOne Health and ECM Therapeutics.
Overall, a combination of AI and life sciences companies brought in the most funding to the region last year. The life sciences sector — defined as inclusive of HealthTech, MedTech, medical devices and more — made up 49.3% of total dollars invested in Pittsburgh’s tech economy last year. The percentage of dollars invested in software and hardware was 22.9% and 26.8%, respectively.
Technology hubs attract world-class investors. Pittsburgh companies have drawn the attention of leading venture capital firms, including SoftBank, Andreessen Horowitz, New Enterprise Associates, Sequoia and Tiger Global. A number of corporate venture arms have also invested there. Last year, three deals that brought new investors to the market included Frist Cressey’s investment in Blackbird Health, Redpoint’s investment in Abridge and Andreessen Horowitz’s investment in Swan Technologies. In aggregate, over 300 venture capital firms from around the world invested in Pittsburgh companies in the last 10 years, including 33 making their first investment in the region in 2024.
Regional strengths in AI and autonomy mirror the sector tailwinds that we are seeing nationally and globally, and both sectors, which are key regional clusters, will likely contribute to growth moving forward. The traditional drivers of this growth are Pittsburgh’s world-class technical capabilities and talent, and the $13 billion of university research over the past decade. Further, the ecosystem has attracted satellite offices of global companies. Collectively, this has created over $23 billion of exit proceeds over the past decade and makes Pittsburgh an attractive destination for global investors, talent and companies alike.
Both Ernst & Young LLP and Innovation Works are committed to supporting entrepreneurial growth in the region. Tracking investment activity helps us begin conversations with new investors interested in regional deals, informs local investors about our strengths compared with other communities, and chronicles what’s working and where we need to focus our efforts. We hope this report provides you with useful insights into the state of the local technology community and venture capital ecosystem, and inspires new ways to move it forward.
Darrell Smalley
Pittsburgh Office Managing Partner
Ernst & Young LLP
Ven Raju
President & CEO, Innovation Works
Managing Director, Riverfront Ventures
[1] Q4 2024 PitchBook-NVCA Venture Monitor
Reports and trends
In 2024, over 182 unique Pittsburgh companies attracted $1.89 billion in investments
While the total dollars invested are down from last year’s total of $3.12 billion, the number of unique companies increased by 33.8%. Corporate investments for 2024 came in at about $377.5 million, down from just under $2.2 billion last year. But venture capital investments increased significantly, from $644 million in 2023 to $999 million in 2024 — the highest year for VC investment yet.
Top deals last year included Aurora, Skild AI, Krystal Biotech and Abridge.
Pittsburgh offers a robust pipeline of opportunities
The number of deals nationally in 2024 was 15,260 — up from 12,749 in 2023. Pittsburgh followed that trend, seeing 205 deals in 2024, up from 166 in 2023. The unique number of companies funded in Pittsburgh also increased from 136 in 2023 to 182 in 2024. This was likely a result of both new entrants to the market, as evidenced by the increase in the region’s seed and accelerator deals, and the return of growing companies to the market after stepping back from fundraising efforts in recent years amid unfavorable market conditions.
Health care and AI brought the most funding to Pittsburgh last year, due to a number of large corporate and venture deals
A majority of the money invested in Pittsburgh’s tech economy in 2024 came from deals in life sciences and healthcare. Fundraises in those sectors made up 49.3% of the total dollars invested in the region last year. The sector split of unique companies funded was more even, with only 36.8% of the total number of deals coming from the life sciences sector, 33.5% coming from the software sector and 25.8% coming from the hardware sector.
The shift toward life sciences and healthcare deals in 2024 can be attributed to Pittsburgh’s AI boom and how it has unlocked innovation in the region’s life sciences talent base. Five of the top 10 deals last year were for companies focused on AI innovation, including Aurora, Skild AI, Abridge and Green Cabbage.
The chart below estimates the annual supply of uncommitted funds at VC firms in the Pittsburgh region. This analysis considers the timing of new fund closings and assumes that a firm will commit 25% of a new fund’s capital during each of the first four years post-closing. If a fund is managed by partners located outside of the Pittsburgh region, the amount of the fund’s capital that is “located” in Pittsburgh is determined by multiplying by the percentage of the fund’s partners who are located in the region.
Over the past few years, several new funds have emerged, including Blue Tree Capital Group, Black Tech Nation Ventures, Reinforced Ventures and Riverfront Ventures.
Despite this activity, the estimated supply of local VC funding remains very low. 2024, in particular, was a challenging year for new funds across the United States. According to the PitchBook-NVCA Venture Monitor, only 30 firms raised at least $500 million in new commitments during 2024, and only four of those were emerging firms. Notably, the total amount of funding raised by investment firms last year was just barely above pre-pandemic totals, at $76.1 billion in 2024 and $73.0 billion in 2019.[1]
A healthy local funding ecosystem streamlines the fundraising process for local startups and helps retain more of the financial rewards of successful exits in the Pittsburgh region.
[1] PitchBook-NVCA Q4 2024 Venture Monitor
Exits attract global tech firms to the region
Last year, the Pittsburgh tech ecosystem had 21 exits, with a combined disclosed value of over $440 million. It should be noted that the total exit value is much lower than the previous year because only two of the 21 exits disclosed deal sizes.
Each successful exit strengthens the regional tech ecosystem. The investors realize a positive return and are more likely to invest in the region again. Other investors learn of these successes and come to consider Pittsburgh a more attractive investment destination. The founders and employees receive windfall gains and may become angel investors or mentors and be financially well positioned to pursue new ventures.
As global firms acquire local startups, it’s often the catalyst for larger firms to establish permanent offices in Pittsburgh. Aptiv, Bosch, Meta, IBM, Microsoft, NetApp, Smith & Nephew and Proofpoint are all examples of large tech firms with a significant and growing local presence as a result of startup acquisitions.
Representative deals
4moms acquired by UPPAbaby via Seidler Equity Partners through an LBO 2024
Avere Systems
acquired by
Microsoft 2018
Aurora public
listing via reverse
merger 2021
Babel Health
acquired by
Allscripts 2022
Bloomfield Robotics, Inc. acquired by Kubota (OTCMKTS: KUBTY) 2024
Cancer Treatment
Services
International
acquired by Varian
Medical Systems
2019
Centria acquired
by NuCor 2021
Confluence
Technologies acquired
by Clearlake Capital
Group 2021
Duolingo IPO
2021
GrayMatter acquired by Tailwind Capital through an LBO 2024
Immunetrics acquired
by Simulations
Plus 2023
InvestEdge acquired
by Featheringill
Capital 2020
Lipella
Pharmaceuticals
IPO 2022
M*Modal acquired
by 3M 2018
PANTHERx Rare
acquired by General
Atlantic, Vistria
Group and Nautic
Partners, 2022
Prodigo Solutions
acquired by Global
Healthcare
Exchange 2023
Setex Technologies acquired by Shin-Etsu Chemical 2024
Skinject acquired by International
Capital Partners via
reverse merger 2023
The Efficiency
Network acquired
by Duquesne
Light 2019
Timesys acquired
by Lynx Software Technologies 2023
TrueCommerce
acquired by Welsh
Carson Anderson
& Stowe 2020
UberATG acquired
by Aurora 2020
Voci Technologies
acquired by
Medallia 2020
Wombat Security Technologies
acquired by
Proofpoint 2018
Pittsburgh is attracting investors from around the world. Thirty-three new investors made their first investment in the region in 2024. Andreessen Horowitz, one of the world’s largest and most active venture capital firms, notably made its first investment in the region last year, leading a $6 million seed round for Swan Technologies, an autonomous defense tech firm.
Over 300 unique venture capital firms, angel groups and strategic investors have invested in Pittsburgh companies in the past five years. The chart below contains a sampling of these organizations (listed in bold ) that made their first investments in the region in 2024.
Pittsburgh competes with high-population centers, with particular strength in AI
Pittsburgh ranked 24th in population but 16th in the amount of venture dollars invested per million residents in 2024. The region ranked 25th in the total number of venture deals per million residents in 2024.
Focusing on the AI and autonomous vehicles industries, the charts below show that Pittsburgh punches significantly above its weight, ranking 16th in the number of venture deals in those industries and 8th in venture funding per million residents for 2024.
In the past decade, local research universities attracted over $13 billion in research funding
The University of Pittsburgh consistently ranks among the top recipients of National Institutes of Health (NIH) funding, and the school’s total research budget surpassed $1.2 billion in 2024. Carnegie Mellon University’s research budget across the Software Engineering Institute, Advanced Robotics for Manufacturing Institute and other grants totaled $517 million in 2024. Duquesne University also opened a College of Osteopathic Medicine in the summer of 2024. Throughout several economic cycles and fluctuations, Pittsburgh’s non-dilutive research budgets have progressively grown, increasing by 79% over the past decade. These grants fund innovation without diluting founders or investors.
Founders and investors see Pittsburgh as a thriving startup ecosystem
Click the tiles below to read quotes about the Pittsburgh investment landscape.
Pittsburgh fundraisers in 2024
Aurora Innovation (NAS: AUR)
Skild AI
Krystal Biotech (NAS: KRYS)
Abridge
Noveome Biotherapeutics
PeopleOne Health
ECM Therapeutics
Blackbird Health
Green Cabbage
Seegrid
Gather AI
Novasenta
Above are the top 12 fundraisers by dollar amount for 2024.
Methodology
The data in this report comes from a combination of the PitchBook and private company data collected by Innovation Works, Inc. and information reported by Carnegie Mellon University, Duquesne University and the University of Pittsburgh. The investment rounds tracked in these data sets were completed by companies in the Pittsburgh region from January 1, 2010 to December 31, 2024. Note that changes may occur in this report from year to year due to updates in third-party databases and adjustments made to best reflect the timing of investment for rounds that have “rolling closes.” For the purpose of this report, both equity investments and convertible note investments were counted as “venture” investment. The geographic boundary of the Pittsburgh region used in this report corresponds to the Pittsburgh Metropolitan Statistical area, as utilized by the U.S. Census Bureau. Throughout this report, the terms “deal” and “round,” which are used interchangeably, refer to a single reported round of funding. Companies may complete more than one fundraising round in a single year, in which case each round is counted as a separate “deal.”
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About Innovation Works
Innovation Works is one of the most active early-stage investors in the country and the most active in Pennsylvania. Since its inception of the seed fund in 1999, Innovation Works has invested in over 760 companies that have gone on to raise $3.3 billion in follow-on funding. Portfolio companies have generated and retained over 20,000 jobs in Pennsylvania.
Innovation Works is part of the Ben Franklin Technology Partners network, which has catalyzed economic growth over the last 30 years by providing access to capital and networks that help foster innovation and technology-based economic development in Pennsylvania.
Learn more at innovationworks.org.
