Mar 23, 2022
Innovation Works President Rich Lunak provides additional insights into the 2021 Ernst & Young | Innovation Works "Investment in Pittsburgh's Tech Sector" report.
This report provides a comprehensive review of investment and exit activity in the Pittsburgh region for 2021, and highlights key trends for 2012–2021.
- Read the entire report here.
- Listen to Rimsys Founder Jim Gianoustus talk about his experience raising its first venture round with Bessemer Ventures.
Pittsburgh’s technology ecosystem has flourished in the past 10 years. The amount of annual capital invested increased more than tenfold to $3.6 billion from 2012 to 2021. Pittsburgh has emerged as a hub for autonomy, robotics, AI and the life sciences. Aurora and Argo AI established Pittsburgh as a leader in self-driving cars, Duolingo in Edtech, and Krystal Biotech, Cognition Therapeutics, and Knopp Biosciences lead the life science ecosystem.
Technology hubs attract world-class investors. Pittsburgh companies have drawn the attention of leading venture capital firms, including New Enterprise Associates, Sequoia, Tiger Global, Kleiner Perkins and Index Ventures. Additionally, the corporate ventures arms of Toyota, Ford, BMW, Intel and Samsung have all invested here. In aggregate, over 300 firms from around the world invested in Pittsburgh companies in the last 10 years, including 16 making their first investment in our region in 2021.
2021 was a seminal year underscoring a decade of growth as five companies went public, including Duolingo, Stronghold Digital Mining, Cognition Therapeutics, Montauk Renewable and Aurora. These companies raised more than $2.6 billion in the process. This mirrored national trends as growth stage companies and their investors floated shares in public markets at record valuations. Nationally, 2021 saw the most IPOs since the 1990s. Additionally, as companies took different routes to public markets, special purpose acquisition companies (SPACs) have become common. Aurora went public via a SPAC and Rice Acquisition Corporation also raised capital via a SPAC.
The drivers of this growth are Pittsburgh’s world-class technical capabilities and talent and the $11 billion of university research over the past decade. Further, the ecosystem has attracted satellite offices of global companies such as Alphabet, Facebook, Bayer, Affirm and Berkshire Grey. Collectively, this has created $21.3 billion of exit proceeds over the past decade and makes Pittsburgh an attractive destination for global investors, talent and companies alike.
Both Ernst & Young LLP and Innovation Works are committed to supporting entrepreneurial growth in the region. Tracking investment activity helps us begin conversations with new investors interested in regional deals, informs local investors about our strengths compared with other communities, and chronicles what’s working and where we need to focus efforts. We hope this report provides you with useful insights into the state of the local technology community and venture capital ecosystem and inspires new ways to move it forward.