Pittsburgh venture capital is (finally) trending up. These 5 companies raised the most in Q4 2023

According to the latest Venture Monitor report, released quarterly by PitchBook and the National Venture Capital Association (NVCA), the last three months of the year brought in $340.46 million across 19 deals for Pittsburgh companies.

Although the number of deals didn’t increase over recent quarters for the Steel City, the Q4 dollar amount is significantly higher than the $41.15 million seen in Q3 and a world away from the low 2023 began with, thanks to a handful of larger deals.

In Q1 2023, Pittsburgh saw a near-record low amount of venture capital invested in local companies, compared to trends over the past decade. Pittsburgh leaders insisted at the time that it wasn’t a mark against the city’s tech ecosystem, but instead a reflection of the reality that, due to an uncertain economy, VCs were more reticent about how they invested their money. Plus, they said then, Pittsburgh was simply experiencing many of the same issues that were being felt by markets throughout the country.

Overall in 2023, Pittsburgh gradually bounced back to get closer to previous years’ totals, raising about $514 million over all four quarters. Compare that to $764 million raised in 2022, $379 million raised in 2021 and $677 million raised in 2020.

Pittsburgh’s biggest venture capital deals

Below are the top five Pittsburgh deals in Q4 as reported by the Venture Monitor. Gentle reminder: As we often see in these quarterly reports, the data may be incomplete, contain some inaccuracies or reflect interim raises. Deal amounts are pulled from public filings.

• Gecko Robotics, a North Side-based robotics technology developer, raised $173 million. This came in the form of $100 million announced in December, adding to a $73 million Series C launched in 2022.
• Imagine Pharma, a biotech developing medications for patients with illnesses that have fewer treatment options, raised a $32 million Series A.
• Abridge, a Downtown Pittsburgh-based healthtech company that developed an app to record and transcribe medical appointments, raised a $30 million Series B.
• Free Market Health, a Strip District-based company specializing in the development of a streamlined marketplace platform for the specialty pharmacy industry, raised a $20 million Series B.
• LyGenesis, a biotech company using lymph nodes to regrow functioning organs, raised $19 million.

What this quarter’s numbers mean for Pittsburgh

BlueTree Capital Group founder Catherine Mott told Technical.ly that although VCs are being more cautious about how they invest due to the current climate, the economy is getting stronger, so there are plenty of reasons to have hope for the future.

“In 2023 we observed the decline in LPs investing in funds, especially new funds, and we have observed the decline for VC funds investing in new companies,” Mott said via email. “However, we see positive indicators for 2024-25.

“The economy has remained strong and continues to strengthen, and this will spur more activity; declining interest rates typically assist with money moving back to alternative asset classes,” she said. “Most importantly, deal valuations are also more reasonable.”

National venture capital trends

Nationally, fundraising and exit activity were down this year, compared to an exceptional 2021 and 2022. Although currently VC experts don’t consider the market to be in crisis, NVCA President and CEO Bobby Franklin said much of the world is, and the market reflects that at the moment.

“From interest rates to foreign conflict, the world looks very different than it did two years ago, and a new set of problems needs to be solved for,” Franklin said in the report’s intro.

Additionally, Franklin said that although VCs were able to remain resilient throughout the pandemic, conflicts abroad — such as Russia’s invasion of the Ukraine — caused investors to realize the necessity of putting resources into both the US economy and private sectors. While Franklin doesn’t see the future as bleak, he believes that there will be challenges to work through moving forward.

“While this broad-based disruption presents a variety of opportunities for enterprising investors,” Franklin said, “the reality of high interest rates, vulnerable supply chains, and misguided regulation means that America’s most dynamic sector has no shortage of challenges ahead.”