Pittsburgh startups raised $168M in Q3, but critical mid-stage funding is still hard to find  

Early-stage startups can find cash in Pittsburgh, but the ecosystem still struggles with the mid-stage funding needed to scale, according to local investors.

Companies in the Pittsburgh metro area raised a combined $168.5 million across 22 deals during Q3, according to the latest Venture Monitor report from PitchBook and the National Venture Capital Association (NVCA). Both figures were below average for the region.

Some companies still had a great quarter. The top three deals of Q3 accounted for about 80% of the total raised, a phenomenon called capital concentration. Efficient Computer, a local chip maker that raised $97 million in September, accounted for more than half the region’s total. 

Take last year’s massive megadeals out of the equation, and Q3 is keeping pace with 2025’s baseline funding, said Lindsay Fairman, managing partner at Pittsburgh-based venture firm BlueTree VC.

“I’m optimistic,” Fairman said, adding, “I love that 19 of the 22 deals went to companies raising rounds averaging about $1.8 million. That’s what an early-stage pipeline looks like, and it’s what feeds the next wave of breakout companies here in Pittsburgh.”

Capital concentration is common in Pittsburgh — and across the country. It was seen in Q1 and Q2, as well as throughout 2025 with several megadeals.

It isn’t necessarily a sign of weakness, though, according to Ven Raju, president and CEO of Innovation Works (IW), one of the most prominent early-stage investors in the Pittsburgh area. 

“Venture is a power-law business, and a few large rounds can move the numbers significantly in any quarter,” Raju told Technical.ly. “What’s encouraging is that Pittsburgh companies are attracting substantial outside capital in sectors where the region has real technical strengths.”

A gap in the middle

A majority of Q3’s top deals were either seed or later-stage, showing a lack of mid-stage rounds happening in Pittsburgh. 

Pittsburgh has healthy company formation, but the ecosystem has more trouble helping companies scale, according to Malcolm Handelsman, managing director of the Active Angels Network, a Pittsburgh-based group of roughly 40 angel investors. 

Many startups spin out of Carnegie Mellon University (CMU) or the University of Pittsburgh, get early-stage help from a host of incubators in the area, and then local philanthropic foundations or IW invest in these high-risk ventures, Handelsman said. But Pittsburgh has far fewer companies that are de-risked and gaining traction than other major cities. 

“The missing component is the middle, the late seed round that carries a company to the Series A round, where Hellbender is today,” Handelsman said. “We need more companies that make it through the middle.”

This gap in funding is actually a growing challenge nationally, according to Bobby Franklin, president and CEO at NVCA. 

“While topline numbers may appear resilient, capital is increasingly concentrated, and emerging and midsize firms are finding it harder to raise their next funds,” Franklin said in a prepared statement. 

Fighting for a seat at the cap table

Pittsburgh-based investors participated in some of Q3’s top 10 deals, but outside capital dominated the quarter. 

Both Raju and Fairman agreed local firms generally don’t have the capacity to lead massive $25 million to $100 million rounds, but they can still provide value to Pittsburgh startups. 

“The role of the local ecosystem is to identify and have the capacity to invest in these companies early, help them reach meaningful technical and commercial milestones and then connect them to larger pools of national and international capital as they scale,” Raju said. 

If local investors don’t find ways into later rounds, though, Pittsburgh will continue missing out on the wealth generated by its own startups, according to Handelsman. 

Take Duolingo as an example. The company is a Pittsburgh success story, but most of its investment dollars came from outside the city, so those returns were taken elsewhere, he said. 

To keep wealth local, he added, investors should collaborate on deals, whether by pooling money into special purpose vehicles to meet larger minimums, co-investing or securing early pro-rata rights. 

“Pittsburgh investors need to share in wins like Duolingo,” Handelsman said. “Until this happens, the ecosystem will struggle to reach the next level.”

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More than $1B in exit value

A healthy ecosystem can’t just be measured by dollars invested, according to Raju. Exit activity matters, too.

PitchBook tracked several notable exits during the quarter. 

Colorado-based space and defense tech company Voyager Technologies acquired CMU spinout Astrobotic in July for approximately $300 million. 

Then in September, New York-based Figure Technology Solutions acquired Kiavi, a fintech platform for real estate lending, for $717 million. 

There were also some smaller acquisitions or deals for undisclosed amounts. 

AdSkate, an advertising tech platform founded in 2018, was acquired by marketing agency Brunner for an undisclosed amount. CMU and IW previously invested in the company. 

Pittsburgh-based Axe Compute, previously known as Predictive Oncology, sold its cancer diagnostics subsidiary Helomics to DataMeds AI for $1.5 million. Pittsburgh firms like Stonewood Capital Management, Adams Capital Management and Birchmere Ventures previously invested in the business. 

“When companies generate meaningful exits, that can return capital to investors and, just as importantly, put experienced founders, executives and employees back into the ecosystem,” Raju said. “Those people often become the next generation of founders, operators and angel investors.” 

Nationally, exits are where the real story is, according to Nizar Tarhuni, executive vice president of research and market intelligence at PitchBook. 

Of the companies that did list during Q3, healthcare dominated rather than the AI names the market needs for liquidity, Tarhuni said. 

“This year’s numbers will look like a boom at the top line,” Tarhuni said. “But for most of the market, the liquidity won’t show up, and that will have a large impact going into 2027.”