Tech investment in the Pittsburgh region slipped in 2022 compared to the record set in the previous year, attracting about $1.05 billion across 176 deals.
The latest report from North Side-based Innovation Works and Ernst & Young noted that the economic downturn and shrinking valuations took their toll in 2022. In 2021, investments reached a high of $3.6 billion.
“It’s no secret that there were far fewer public exits over the past year, and those were key drivers of the record-breaking $3.6 billion we saw in Pittsburgh in 2021,” the annual report stated.
The region saw about $716.8 million invested by institutional investors; another $248.3 million invested by corporations and $64.2 million in angel, pre-seed or seed funding.
Leon Hoffman, managing partner at the Pittsburgh office of Ernst & Young, called 2022 “a year of great resilience” for Pittsburgh. The challenges here echo what is happening across the country, he noted.
“The overall macro environment in March of 2023 is much different than it was this time last year,” Hoffman said. “The cost of capital has increased significantly across the board and IPOs and SPAC transactions are down significantly. So a lot of the traditional financing vehicles for the companies that are covered as part of our report are structured a lot differently than they were even a year ago.”
Last year, over 150 unique Pittsburgh companies attracted $1.029 billion in investments. That’s an increase over 2021, with venture capital investments increasing by 21% from $592.2 million in 2021 to $716.8 million in 2022, according to the report.
Life sciences and software startups garnered particular attention, combining to drive more investment than hardware or robotics for the first time since 2017.
The report noted that funding in life sciences has climbed by 193% over the last decade, while that of the software sector has grown by 621% in the same period.
Stephanie Ritenbaugh is a Tribune-Review staff writer. You can contact Stephanie at sritenbaugh@triblive.com.
