$640M in VC money poured into Philly last quarter, signaling a stable local market

After a fundraising rollercoaster over the last few years, Philly’s venture capital market appears to be leveling out at a volume similar to just before the pandemic. 

Companies in the Philadelphia region raised almost $643 million across 100 deals, according to the latest Venture Monitor report, released quarterly by PitchBook and the National Venture Capital Association (NVCA). 

The latest numbers aren’t surprising to Emily Foote, a partner at Bala Cynwyd-based venture capital firm Osage Venture Partners. The stats, she said, reflect a solid VC market. 

“They do paint an interesting picture of our region’s resilience and potential,” Foote told Technical.ly. “While we’ve seen some fluctuation over the past year, the overall trend suggests a stabilizing market.” 

After record-high raises in 2021 and 2022, Philly’s 2023 totals were a significant dip — but things are now holding steady. Last quarter saw $732 million raised over 101 deals, while this spring’s total is only slightly lower over nearly the same number of deals. That pattern much is steadier than the drastic spikes and subsequent falls during the immediate post pandemic years. 

Though down from the 2021-2022 spike, investment totals in the Philadelphia Metropolitan Statistical Area, which includes Delaware and parts of New Jersey and Maryland, are generally higher now than last decade. The average number of deals per quarter has increased more notably, and is now up about 23% versus five years ago. 

In the most recent quarter, however, four big deals did account for nearly a third of the total value.

Note: As is always true with these quarterly reports, the data may be incomplete, or reflect interim raises, or otherwise contain inaccuracies. Deal amounts are pulled from public filings.

Healthcare and info tech dominate Q2 raises 

It’s no shock that two of this quarter’s top deals are in the healthcare industry, which is strong in Philadelphia. The other companies are categorized as information technology. 

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.

Here are the top five 2024 Q2 deals from the Philadelphia region: 

1. Philly-based gene therapy company Latus Bio raised $54 million. 
2. Conshohocken-based AI gun detection software company ZeroEyes raised $53 million. 
3. Philly-based cell and gene therapy company Interius raised $51 million. 
4. Fundraising platform Givebutter was the fourth highest raise at $50 million. Its headquarters is listed as Wilmington according to Pitchbook, but Givebutter’s LinkedIn says the company is remote.
5. AI-based calendar platform Motion was the fifth highest raise with $36.5 million. Pitchbook lists the company’s headquarters as Wilmington, but LinkedIn lists the headquarters as California.

Philly aligns with national trends for AI venture capital

Philly aligns with the national trend that VC markets are leveling out after some uncertainty following the pandemic. 

It’s still a difficult market for exits, though, and investors are focused now on supporting companies with more inside and continuation rounds, Bobby Franklin, president and CEO of NVCA, said in the report. Venture capital in general is also seeing hype around AI, but investors seem to be doing less due-diligence for deals in this sector. This could cause challenges for AI startups raising capital in the future. 

“Overall, the direction of the market appears to give modest cause for optimism, and — in hindsight — to be relatively predictable,” Franklin said. 

Q2’s data suggests that Philadelphia is holding its ground in raising VC and showing growth in healthcare and technology sectors, according to Foote, of Osage Venture Partners.

At Osage, for example, Foote is seeing Philly’s startup scene shift to incorporating AI tools to increase efficiency. She says she’s hopeful the startup ecosystem in the region will continue on that path. 

“While challenges remain,” Foote said. “I believe Philadelphia’s startup scene is on a positive trajectory.”

Sarah Huffman is a 2022-2024 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Lenfest Institute for Journalism.