Philly’s big Q4: The region saw $1B in VC investment last quarter alone

Philadelphia’s venture capital market finished 2024 strong, setting the region up for positive trends in the new year.

Companies in the Philadelphia region raised just over $1 billion across 103 deals in Q4 of last year, and one company’s raise contributed half of that, according to the latest Venture Monitor report, released quarterly by PitchBook and the National Venture Capital Association. Philly’s annual total for 2024 was $3.29 billion over 440 deals, compared to $2.42 billion over 500 deals in 2023.

Overall, Philadelphia’s venture market is coming into its own, with investors focused on supporting strong companies and a variety of industries represented in the ecosystem. These attributes signal strength that investors think will lead to a positive 2025, they told Technical.ly. 

An increase in capital invested despite lower deal count signals that investors are focused on “quality over quantity,” Howard Lubert, area president of angel investor network Keiretsu Forum Mid-Atlantic, said. 

“Investors are becoming more selective, focusing on fewer but higher-value deals,” Lubert said. “This reflects cautious optimism, especially given the economic conditions of the past few years.” 

The first three quarters of this year suggested that the market was leveling out after investments took a big dip in 2023. That changed in Q4, with a higher amount of capital invested, making for one of Philly’s best years for capital raised over the last decade.

Nationally there has been reduced venture capital activity, meaning fewer deals have been done, despite raising more money, Dean Miller, president and CEO of the Philadelphia Alliance for Capital and Technologies told Technical.ly. 

Comparing these trends suggests that Philadelphia’s venture ecosystem is maturing after years of setting itself up as a destination for companies, Lubert said. Investors are less concerned about deal quantity and focus their energy on supporting scalable companies.

“This can attract more institutional and national attention, positioning the region for sustained growth,” he said. 

Philly’s already experiencing it. The region was named the No. 25 startup ecosystem globally on Startup Genome’s Global Startup Ecosystem Report last year. The region was also recognized as a designated Tech Hub by the Economic Development Administration. 

The Philadelphia Metropolitan Statistical Area, which includes Delaware and parts of New Jersey and Maryland, maintains its status as a top-five venture market for both deal count and deal value, right behind the Bay Area, Los Angeles, New York and Boston, according to the report. 

“Venture ecosystems aren’t created overnight,” Miller said. “[Philadelphia] over the past decade has emerged as one of the top areas in the country.” 

These figures may vary slightly after publication, as some deals aren’t accounted for until weeks after quarterly VC reports are published, or PitchBook may find errors in its data. 

Philly deals varied widely across sectors

While Philadelphia is known for its strength in life sciences, the region’s top deals reflect a variety of industries such as information technology, energy and fintech. 

It has been extremely hard for life sciences companies over the last few years, Miller said, because of natural market cycles and healthcare companies rely on investors and public markets more than other industries. 

However, Miller anticipates that the cycle to change again soon. When big companies announce deals, like Johnson and Johnson’s recent $14 billion acquisition, it creates competition and momentum for other healthcare companies to do the same. 

Philly’s bustling life sciences scene, which continues to see its startups raise money and get attention from national funders, poises the region for increased activity in 2025, he said. 

Still, the mix of industries doing big deals is a good thing for the region, according to Miller. The variety shows market strength and stability and proves why all types of companies choose to grow here.

“The diversity in top deals signals a healthy shift from a life sciences-heavy landscape to a broader industry mix,” Lubert said. “The shift … is particularly promising for future economic stability.” 

Here are the top five Q4 deals from the Philadelphia region:

• Financial services company Praxis raised a whopping $525 million. The company is headquartered in Wilmington, according to Pitchbook. Although co-founders Dryden Brown and Charlie Callinan appear to be based in New York, according to LinkedIn. 
• Center City-based Vitara, a neonatal healthcare company, raised $50 million. 
• Cybersecurity platform Socket raised $40 million. Pitchbook lists the company’s headquarters in Wilmington, but its LinkedIn and its founder’s profile say it’s based in  San Francisco. 
• ConnectDER converts utility meter sockets to be compatible with energy-efficient tech. The Philly company raised $35 million. 
• Philly-based gene therapy company GEMMABio raised $34 million. 

Some companies on this list appear not to be headquartered in the Philadelphia region. That’s something we often see, especially in Delaware, which has state laws that make it attractive for incorporation even if businesses mainly operate elsewhere.

Additionally, Toronto and Philadelphia-based biotech company Radiant Biotherapeutics raised $35 million, although the funding is not included in Pitchbook’s data.  

Experts predict more exits and deals in 2025

Investors are feeling optimistic about venture capital trends in 2025, despite external challenges that remain. 

The last few years have not been good for initial public offerings (IPOs) and mergers and acquisitions because of market volatility, Miller said. However, Philadelphia had 36 VC exits last year, the most exits it’s had since 2019. That shows more exit and IPO activity coming into this year than there was entering last year, Miller said, meaning things are looking better for general partners to invest. 

“In general, people believe that both interest rates coming down as well as markets, will head in the right direction to support more exits and more investment,” he said. “I would expect 2025 to be better than 2024.” 

When looking at trends over the last 10 years, Miller prefers to take 2021 and 2022’s extreme activity out of the mix. Those years were anomalies for venture capital, he said. A combination of pandemic conditions and an active IPO market made 2021 a record-breaking year. 

Under that purview, the amount of dollars raised in the region consistently trends up, with 2024 the most money raised in the last decade, which shows a positive trajectory for the region. 

“We put in four strong quarters in 2024 and really have set the table, I think, for again, an improved 2025,” Miller said. 

Still, leading up to seismic changes like the incoming Trump administration, the economy and geopolitical events, an uncertain regulatory environment and macroeconomic challenges mean investors have to remain cautious, Lubert said. That’ll shake out in fewer deals of higher value.

“With rate cuts expected to ease some market pressures,” Lubert said, “there may be a slight uptick in deal activity.”