Economics / Startups / Venture capital

Pittsburgh VC’s 2023 is off to a rough start with a record low in funding raised during Q1

The region's startups brought in the least amount of venture capital in a decade last quarter. Local investors point to a national slowdown of deal flow.

Pittsburgh from above. (Photo by Flickr user Patrick Kinney, used via a Creative Commons license)
Editor’s note: These figures may vary slightly, as some deals aren’t accounted for until weeks after quarterly VC reports are published.
Correction: Imagine Pharma develops therapies for diabetes, not drugs to treat cardiovascular diseases. (4/13/23, 4:40 p.m.) A detail has been added to clarify that Apollo Neuro's reported $1 million is the first filing of an interim raise. (5/3/23, 11:45 a.m.)

Pittsburgh investors’ optimism for 2023 hasn’t yet come to fruition.

According to data released by PitchBook and the National Venture Capital Association in their Q1 2023 PitchBook-NVCA Venture Monitor, the first three months of the year marked a record for the Steel City, but not in the way stakeholders wanted: Companies in the region brought in just $14.45 million across 15 deals, according to the report. That makes Q1 a low for Pittsburgh, with the least amount of venture capital raised in the region at least since the Venture Monitor has been tracking regional dealflow, since 2014.

Additionally, this is a significantly lower dollar amount than was seen for Q1 this time last year when the city saw $151.98 million brought in across 25 deals during the first three months of 2022.

In the last two quarters of 2022, things seemed to be looking up for Pittsburgh despite the concern over inflation and the potential for a recession. After the city raised an applauded $172.53 million raised across 29 deals in Q3 and ended the year with $251.53 million across 32 deals in Q4, by all accounts Pittsburgh ended 2022 on a high note, particularly after the worrying amounts seen throughout 2021.

Biggest deals

Pittsburgh’s 10 largest deals in Q1 2023, are reported by the Venture Monitor:

  • Day Owl, a sustainable backpack company — $4 million later-stage raise
  • Duo Oncology, a nanomedicine platform for cancer patients — $3 million seed round
  • Model-Prime, a robotics platform for analytics and log management — $2 million seed round
  • Entre, a community networking app —  $2 million seed round
  • Apollo Neuro, a company developing a wearable device to help its users sleep— $1 million later-stage raise (see clarifying note below)
  • ESTAT Actuation, a developer of actuation hardware designed to make robots smaller and more affordable — $1 million early-stage raise
  • TRAINED, a designer of an AI platform meant to automate efficiency in fields that require a high amount of attention to detail— $1 million angel investment
  • PittMoss, a manufacturer of peat-free potting mixes for plants— $475,000 later-stage raise
  • Element Exo, a company developing wearable exoskeletons to prevent back injuries in jobs that require heavy lifting — $400,000 early-stage raise
  • Imagine Pharma, a biotech company developing therapies for diabetes — $300,000 later-stage raise

For PittMoss, Element Exo and Imagine Pharma, the Venture Monitor reported their raises as “$0,” indicating they were under $1 million. The above figures are as stated in the company’s SEC filings.

As we often see in these quarterly reports, the data are not complete, contain some inaccuracies or reflect interim raises. In the case of Apollo Neuro, which also raised a $15 million Series A in spring 2022, the reported $1 million is “the first filing in their interim raise which is still ongoing,” a spokesperson told And Day Owl disputed its reported figure, telling the Biz Times its raise was lower than $4 million.

The report is also missing sustainability-minded startup Kloopify’s $1.5 million seed round led by Black Tech Nation Ventures, and $12 million for Stratus Materials, which emerged from stealth mode in February.

Five of the companies among the 15 reported raises have unlisted funding amounts: Aquatherm Technologies, Bloomfield Robotics, Equa Health, LegalSifter and Ocean Genomics.

National trends

Pittsburgh’s steep drop can’t be fully explained by national trends, but they could be related. Since Q3 of 2022, national VC dollars have been on a steady decline, though they do roughly match how much was invested before the boom in 2021. Pitchbook and NVCA’s report called out a few reasons why this is the case:

“Continued instability abroad, stubborn inflation rates and several high-profile bank failures contrasted with a bevy of positive macroeconomic indicators spread a plume of anxiety across the markets,” the report said in its intro. (One of those bank failures, of course, was Silicon Valley Bank, which counted about half the country’s venture-backed tech and healthcare companies among its clients.) “Finance — especially VC — is fundamentally prospective, and when the invisible hand that writes the rules of the market is revising them without warning, investors tend to reduce their activity until they can see at least a rough draft.”

Local reactions

In response to the numbers reported for Pittsburgh, Zach Malone, a partner at Magarac Venture Partners, told that he believed the low amounts of funding coming into the city were reflective of this slowdown in funding being seen across the nation, as opposed to a dilemma unique to Pittsburgh. Malone added that the turn of events wasn’t surprising, but he does ultimately believe that the next quarter will bring in more funding for the city.

“It’s hard to tell when things will pick back up exactly, but I think as the economy starts to stabilize, as well as the specific venture/startup ecosystem being stabilized, I think you will certainly see the patient investment and backup due to [having] more stability,” Malone said. “The more comfortable investors feel and the more comfortable companies [feel], you’re going to see them raise that capital.”

Sreekar Gadde, executive director for BlueTree Allied Angels, also attributed the record low to the uncertainty the capital markets are facing at the moment. In an email to, Gadde explained that although there were fewer deals, there were still higher quantities and echoed Malone’s belief that things will eventually return to “normal.”

“For the next 12-18 months, I think deal flow will stay relatively tight with only the strongest companies attempting to raise rounds,” Gadde wrote. “But, fundamentally, the Pittsburgh ecosystem has not been affected drastically, by either the recent SVB bank run and related fallout or by the general market correction that has shock valuations on both coasts. So, long term, I expect to see our ecosystem recover relatively quickly.”

Atiya Irvin-Mitchell is a 2022-2023 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 Heinz Endowments.
Companies: Apollo Neuro / Kloopify / National Venture Capital Association

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