Abridge raises $250M amid Pittsburgh’s booming healthtech scene. Can other startups tap into the success?

AI-powered health tech startup Abridge announced earlier this week that it raised $250 million in a Series D funding round, raising the company’s valuation to $2.75 billion. 

That’s a big deal for the startup — but perhaps an even bigger deal for the ecosystem at large. 

Pittsburgh has a long history of medical innovation, and there’s an ongoing trend of increasing venture capital deals in the industry. The recent multimillion-dollar raise from Abridge and other companies in the life sciences and healthtech ecosystem signals a larger trend of Pittsburgh emerging as a growing hub for healthtech investment. 

But this development appears to be flying under the radar, despite Pittsburgh’s unique advantages that differentiate the region from other emerging life science hubs, said Meghan Shaw, president and CEO of the Pittsburgh Life Sciences Alliance (PLSA). 

“One thing that has been very eye-opening is just how little awareness this sector has locally, at the state level and nationally,” Shaw told Technical.ly. “There is way more going on here than most people realize, and so one of the things we’re going to be doing is really trying to raise the profile of the region so that people are aware of everything that is going on.”

Abridge, based in downtown Pittsburgh, has quickly made its mark as a heavy hitter in the city’s healthtech ecosystem. Capitalizing on the growing use of AI-powered tools in healthcare, it raised $150 million last year, with a platform that now has a presence in over 100 US health systems.

That’s just one company. When Abridge wasn’t leading the pack at the beginning and end of the year, others stepped up. Biopharmaceutical company Noveome Biotherapeutics, regenerative medicine company ECM Therapeutics and wearable device startup Apollo Neuro attracted multimillion investments, making the top deals in the region last year. 

In fact, since 2018, the number of deals in life sciences has grown by 70% and the amount invested has more than tripled, outpacing state and national growth rates, according to an October 2024 report from PLSA.

The space is expected to grow to $500 billion per year by 2026, opening up opportunities for more exponential growth, but how can startups differentiate themselves and capture a share of the growth, rather than seeing all the attention focused on just a few major players?

World-renowned health innovation academia draws companies in 

Among the greatest advantages of being based in Pittsburgh are the connections and access to quality talent, Josh Caputo, president and CEO of local health tech startup Humotech, told Technical.ly. 

Startups have access to local universities, major healthcare systems and local accelerator programs, like Innovation Work’s Robotics Factory, of which Humotech was a 2024 cohort member. 

“It’s thanks to Pitt that we met the doctors, the prosthetists, the patients,” Caputo said. “All of that has happened thanks to the Pitt ecosystem. CMU has been great as well for engineers and the kind of technical invention aspect. So, both universities have created a really great ecosystem of talent and thought leaders.” 

Pittsburgh’s ecosystem benefits from the databases tied to the University of Pittsburgh and Carnegie Mellon University, the PSLA report found. Local researchers published over 10,000 articles from 2018 to 2022 in oncology, bioinformatics and multiple surgical specialties. 

These innovations have real-world results. The region has gained recognition for developing innovative treatments and medical therapies that go beyond traditional approaches, often leveraging cutting-edge technologies to improve patient outcomes. 

Major investments have already gone towards this effort, like $250 million from RK Mellon Foundation for the University of Pittsburgh to establish BioForge, a 185,000-square-foot biomanufacturing center. 

Lucrative partnerships with Pittsburgh’s healthcare giants

Healthcare is a top occupation in Pittsburgh, with visibility dotting the downtown skyline and more. For founders, that’s a built-in opportunity to connect, on top of the accelerators and other startup programs dedicated to the industry, according to Alexander Geht, an industrial designer and founder of disability tech company Testa-Seat, Inc.

Geht moved his company to Pittsburgh after struggling to successfully establish connections with local accelerator programs and healthcare systems in Chicago. Since moving, Testa-Seat has been a cohort member of Innovation Works’ Alpha Labs accelerator program and received support from 412×972, an initiative that encourages Israeli companies to come to Pittsburgh. 

The region is consistently ranked among the world’s top 20 emerging life sciences clusters and in 2023, the Pittsburgh region’s life sciences industry accounted for $3.4 billion in economic output and more than 15,000 jobs, according to PLSA.

“From my perspective, I definitely see that Pittsburgh is now investing so much effort and money to keep businesses in this area and also providing many different acceleration programs and networking events, so we totally like it,” Geht said. 

A ‘fertile ground’ to grow, but not without challenges

The city’s affordable cost of living and local supply chain network have also played a key role in Humotech’s growth, making Pittsburgh “fertile ground for getting things started,” Humotech’s Caputo said. 

Founded in 2015, Humotech develops exoskeleton and orthotic bracing technology designed to help amputee patients personalize their prosthetics. The company’s robotic system enables patients to explore different options while walking, continuously adjusting the foot’s behavior to optimize it for the individual and making prosthetics care more data-driven.

After several years of clinical trials, Humotech has deployed about 40 of its systems across North America and Europe. The company is now focusing on expanding into private clinics and raising funds for the first time, but even in a hotbed like Pittsburgh, that’s an uphill battle.

“If I had a magic wand, I would ask for a frictionless process for piloting [medical devices],” Caputo said. “I wish we could just walk into a hospital and be like, ‘hey, test my product,’ but it’s not that simple.” 

The big bucks, however, still come from outside of the region 

Highly regulated fields like healthtech face regulatory hurdles that can’t be shortcutted, making these hundreds-of-million-dollar deals hard to land.

For example, startups in the medical device field need investment to navigate the FDA approval process, but investors are more attracted to FDA-approved devices, Caputo said. 

Slow, steady growth is still possible while awaiting that approval, but it takes a lot more to convince investors to make that bet, according to Testa-Seat’s Geht. 

This tracks with an emerging trend in venture capital deals of fewer, but larger deals in the region, not only from quarter to quarter, but also year over year. Total capital investment in the region increased only slightly last year, but the average deal size jumped over 50% from 2023 to 2024. 

Those major investors often come from outside of Pittsburgh, and it’s difficult for these growing startups to make those connections in places “where the money is” like Boston or Silicon Valley, Caputo said.

But Pittsburgh has the academic, affordability and healthcare prowess advantages that those places don’t — still giving it a chance to grow more standout unicorns like Abridge.

“Would it be nice if Pittsburgh had more Fortune 500 headquarters located here? Yeah, of course,” Caputo said. “But I’d rather live somewhere that’s super livable and affordable and friendly and nurturing, and hop over to the airport, than some big, cutthroat, super stressful city.”