Pittsburgh sees $278M in Q4 VC investment, a high mark driven largely by healthcare 

Fundraising in Pittsburgh surged in the final quarter of 2024, driven largely by a single major deal.

Venture capital investment in the region increased nearly fivefold in Q4 compared to Q3. Companies from Pittsburgh raised a combined $277.9 million across 14 deals during the last three months of the year, according to the latest Venture Monitor report from PitchBook and the National Venture Capital Association (NVCA). It brought the annual total to $650.1 million across 67 deals.

There’s an emerging trend of fewer, but larger deals in the region, not only from quarter to quarter, but also year over year. So, although capital investment increased slightly from 2023 to 2024, the decrease in the number of deals indicates a trend toward fewer, larger investments. 

This could be because “investors are still normalizing from the outsized valuations that were characteristic of 2021,” Ven Raju, president and CEO of startup accelerator Innovation Works, told Technical.ly. 

Those outsized valuations in 2021 can be attributed to the ongoing pandemic, which accelerated the shift to cloud services and spurred a surge in IPO activity. 

The tides have shifted going into 2025. Investors have to focus on repositioning and supporting existing portfolio companies, Raju, also the managing director of the Pittsburgh-based early-stage venture capital fund Riverfront Ventures, said. 

Total capital investment in the region increased only slightly last year, from $645.3 million in 2023. While that’s not a major increase, the average deal size jumped by over 50% from $6.45 million in 2023, which saw 100 deals in total, to $9.7 million in 2024, which only saw 67 deals total. 

The average deal size increased from $3.56 million in Q3 across 16 deals to $19.85 million in Q4 across 14 deals, with one deal accounting for about 90% of the funds raised across the last three months of the year. Local AI healthtech startup Abridge raised a whopping $250 million in later-stage VC funding in October. 

“Tailwinds in robotics and AI have prompted investors to make concentrated bets on companies that have the potential to be transformative,” Raju said. 

Healthcare dominates, especially when mixed with AI

During the first three quarters of 2024, medical and healthcare startups raised the largest amount of funds in the Pittsburgh region, and Q4 was no exception. This makes sense for a city that has a large healthcare presence. 

Companies integrating those fields with AI and robotics saw the most success. However, smaller startups focused on these sectors aren’t getting much of the pie, according to local investors. 

“By and large, the companies that have benefited from this surge in capital have been growth and late-stage companies,” Raju said. “To the extent we are able to bolster sources of early-stage capital in the region, we have the opportunity to create an even stronger pipeline of companies that can go on to secure large investment and scale right here in the region.”

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

1. Abridge, a healthtech company in downtown Pittsburgh, raised $250 million in later-stage VC funding in October. The deal raised the company’s valuation from $2.2 to $2.5 billion. 
2. Four Growers, an agtech robotics company in Point Breeze North, raised $9 million in Series A funding in November. The company will use the funds to scale the production of its flagship GR-100 harvesting robot and expand its global reach. 
3. Rimsys, a regulatory information management platform for medical device companies located in the North Side, raised $5.3 million in Series AA growth funding in October. The startup was also one of the top five deals in Q3 for raising $5 million in September. 
4. ThoroughCare, a healthcare coordination software company located on the North Shore,  raised $5 million in Series A funding in October. The funds will support product development, account management and expansion into new markets, according to a press release. 
5. Edge AI, an AI-powered infrastructure maintenance company in Homestead, raised $3 million in seed round funding in October. The funds will be used to scale operations, advance its technological development and expand the company’s subscription-based service model, according to a press release. 

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. 

PitchBook identified two Pittsburgh startup exits, or founders selling their companies, in the fourth quarter of 2024, but at no valuation. This happened in Q3 too, with three exits valued at zero dollars. 

Pittsburgh accounts for more than half of PA’s VC investments

Pittsburgh’s year had a good start with $248.9 million raised across 21 deals in Q1. 

Then, venture capital investments fell dramatically in Q2 with $66.2 million raised across 16 deals. Investments continued to stay stagnant in Q3 with $57.1 million raised across another 16 deals. 

Q4 was a strong finish for investments, but the number of deals is stuck at a 7-year low. 

The investments that do happen, however, are worth a lot more, as demonstrated by the region’s impact on the commonwealth. Deals in the Pittsburgh region during Q4 made up 27% of the total 52 deals in Pennsylvania, but almost 50% of the total amount invested in the commonwealth. 

Investors like Raju are optimistic about what this data means for increasing the volume and scale of tech companies in the Pittsburgh region. 

“The region has all the right ingredients for a robust and thriving entrepreneurial community, [including] world-class research institutions, strong concentration of tech and scientific talent, and is a capital efficient place to start and scale a business,” Raju said. 

Pittsburgh aligned with national trends toward fewer, bigger deals

Like in Pittsburgh, outsized deals across the US continue to elevate the total deal values across markets, according to PitchBook’s report. 

The total value of deals in 2024 reached $209 billion across an estimated 15,260 deals. The increase in outsized deals was the primary driver of 2024’s deal value. 

Venture capital recovery from the lows of 2022 and 2023 are heavily skewed toward the top performers and AI companies, specifically. For example, of the $74.6 billion raised in deals across the US in Q4, 43% of that value can be attributed to five companies: Databricks, OpenAI, xAI, Waymo and Anthropic — which are all leaders in AI development. 

However, while dealmaking remains slow in Pittsburgh and across the US, PitchBook’s report signals promising signs for 2025, suggesting that the worst of the venture downturn may be behind us. 

“Our view for 2025 is cautiously optimistic,” said Nizar Tarhuni, executive vice president of research and market intelligence at PitchBook. 

A more business-friendly environment in Washington, along with additional time for startups and investors to adjust their expectations regarding valuations, deal structures and growth, could encourage more capital to return to the market, according to Tarhuni. 

“That said, fundraising may remain lukewarm,” Tarhuni said, “particularly as other pockets of the market seem to be gaining steam, competing for dollars in allocator’s alternatives buckets, ultimately favoring larger venture platforms and established managers.”