Venture capital

Pittsburgh venture capital slows to $74M in Q2, with few deals and no exits

The lack of startup investment in the region is partly because most local funds are small, according to an expert.

Sunrise over the Pittsburgh skyline in April 2024 (Danya Henninger/

Venture capital investment in the Pittsburgh region fell drastically in Q2 after starting strong in the first quarter of the year.

Companies from Pittsburgh and the surrounding suburbs raised $74 million across 15 deals over the past three months, according to the latest Venture Monitor report, released quarterly by PitchBook and the National Venture Capital Association (NVCA). One single deal accounted for more than a third of the money.

That’s a sharp drop from the first three months, which saw $259 million across 18 deals in Q1. The latest numbers show the fewest number of deals since Q4 of 2017.

A lack of investments from funds outside the area is one element that “holds our region back from being a hotspot for startups,” said Catherine Mott, co-founder and managing partner of Pittsburgh-based VC BlueTreeVC. 

“​​The local funds are small, and we do our best to syndicate funding with out-of-town VC funds,” Mott told in an email. “However, these larger out-of-town VCs prefer to invest in ‘known founders’ that are geographically close to them.”

Nationally, the US has seen VC investment dwindle year-over-year since funds spiked in 2021. In Pittsburgh, people have been saying that local VCs need to step up and tap into regional talent to build a strong startup scene. Artificial intelligence, autonomous vehicles, and robotics have been major drivers of investments in Pittsburgh recently.

PitchBook documents zero Pittsburgh startup exits, or founders selling their companies, in the second quarter of 2024. 

ECM Therapeutics and Apollo Neuro led with the biggest deals

Startups in the healthcare industry, as per usual, saw the most investment this quarter. The trend is on par with the growing need for medical innovations post-pandemic, according to Rezzan Kose, a venture partner at 412 Venture Fund based in Pittsburgh.

The healthcare sector, in particular, remains robust, with startups focused on medical devices, digital health, and analytics primarily looking to leverage artificial intelligence,” Kose told 

These are the region’s five biggest deals, according to PitchBook data: 

  1. ECM Therapeutics, a Warrendale-based regenerative medicine company, raised $26.1 million during a later-stage round in May.
  2. Apollo Neuro, a Pittsburgh-based health company that develops wearable devices to help lower stress, raised $9.8 million in Series A1 financing in April. 
  3. Sudoc, a Pittsburgh-based startup that makes sustainable chemicals, raised $8 million in an early-stage funding round in April. 
  4. Honeycomb Credit, a Pittsburgh-based firm behind a crowdfunding loan platform, raised $6 million in later-stage VC in June. 
  5. Freespace Robotics, a Monroeville-based developer of warehouse automation technology, raised a $5.3 million Series A in May.

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.

The Pittsburgh blip contradicts national trends toward growth

While deal flow in the Pittsburgh region slowed down last quarter, VC investments across the US climbed. 

VCs spent $55.6 billion on an estimated total of 4,226 deals in Q2, the highest quarterly deal count since Q2 of 2022, according to PitchBook. 

“With steadily increasing deal values, especially across early-stage investments, more first-time financings, and increased crossover investor participation,” Bobby Franklin, president and CEO of the NVCA, wrote in the executive summary of the Pitchbook report, “Q2 ‘24 was a good one for VC.”

That’s, in part, because investors are looking to cash in on emerging sectors like artificial intelligence, Kose, the Pittsburgh partner at 412 Venture Fund, said. The uptick of startups in these industries, she added, are bringing money into the region. 

Macroeconomic factors like inflation, interest rates, and geopolitical uncertainties may continue to lead to “increased scrutiny” and a “longer diligence timeline” in the next two quarters, which could delay deals, Kose said. But the “applications of AI to different sectors” will “likely remain active for investment” until the end of the year, she added. 

“The investment landscape for the second half of 2024,” Kose said, “looks cautiously optimistic.”

Companies: Freespace Robotics / PitchBook / Apollo Neuro / Honeycomb Credit / National Venture Capital Association

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