Philly’s $819 million VC quarter: Leveling out to a new norm?

The Philadelphia region opened the year with a strong start in venture capital deals. After fluctuating quite a bit during the pandemic, the region has taken a more steady influx of VC dollars, and received nearly twice the number in deals than closed in the last quarter of 2023.

Companies from Philly and the surrounding suburbs raised $819 million across 92 deals in Q1 2024, according to the latest Venture Monitor report, released quarterly by PitchBook and the National Venture Capital Association (NVCA).

After the record-breaking year of 2021, the Philly region, like the rest of the country, has begun to level out — but this quarter’s total raise showed an improvement from Q4’s $463 million, in nearly as many deals.

It’s also quite a bit higher than what the area would see pre-pandemic.

Between 2017 and 2019, the Philadelphia Metropolitan Statistical Area, which includes Delaware and parts of New Jersey and Maryland, saw an average quarterly raise of around $460 million, just over half of the latest total. Q1 of this year also outperformed the region’s start one year ago, by 35%.

But it’s a little lower than the outsize numbers from 2021 and early 2022, where it was frequent to see more than $1 billion closing per quarter.

NVCA President and CEO Bobby Franklin believes the slowdown from the pandemic spending is not a trend to be worried about — it’s a reflection on the world and the market at the current moment.

Check out some of the biggest deals in the region below. As always, it’s important to note: 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’s biggest VC deals in Q1 2024

Top regional deals were, as usual, in the healthcare industry, and (somewhat newly) in robotics. They’re spread around the area, with only one based in the city proper.

Here are the four largest, according to PitchBook data and our reporting:

1. Impulse Dynamics, a South Jersey-based developer of a pacemaker-like device, raised $136 million to grow its commercial reach and its R&D.
2. Synnovation Therapeutics, a Wilmington-based precision oncology startup, raised $102 million, according to PitchBook data, a few months after its $69.9 million raise in December.
3. Cagent Vascular, a Wayne-based developer of serration technology, raised $30 million in Series C financing.
4. Burro, an autonomous vehicles company based in Philadelphia’s Callowhill neighborhood that specializes in machines that work alongside humans at nurseries, vineyards and farms, raised a $24 million series B.

National venture capital trends

Philly’s post-pandemic leveling out in Q1 aligns with what much of the rest of the country experienced, per the latest report.

The nation’s total VC deal count was $36.6 billion across 3,925 total deals, relatively on pace with Q1 of last year, if not a little “to the left of the bell curve than usual,” NVCA’s Franklin said.

The numbers are nothing to worry about, he added, saying the VC business cycle has been “effectively reset” in recent years, and is leveling out in 2024.

Kyle Standford, one of Pitchbook’s lead VC analysts, called Q1 a “calm” quarter, saying that not very many outsized deals were closed, but overall deal count still stayed “relatively” high.

Valuations did rise, likely from a stronger performance of the public markets over the last few months, and the idea that already strong companies will be able to continue to raise in a slower market. Stanford did note that some market uncertainties and inflation have pushed the likelihood of lowered interest rates to the second half of 2024, and a recession “remains a possibility.”

Emily Foote, a partner at Osage Venture Partners, told Technical.ly in January that last year was “defined by investor caution, a painfully slow IPO market, steep valuation resets, and LPs skeptical of VC as an asset class.”

Forte wouldn’t call these “normal” ebs and flows to the market, she said, but rather a “significant market reset that we will likely continue to experience in 2024.”