Philadelphia has been working to cement its status among the most active regions for venture capital funding, and the first quarter of 2023 kept the region on that path. Greater Philadelphia ranked fifth in the U.S. for the most closed venture capital deals in 2022 and held that spot to begin 2023, according to the latest PitchBook-NVCA Venture Monitor report.
The combined statistical area (CSA) — which stretches as far as Reading to the west, the Jersey Shore to the east, and Dover, Delaware, to the south — closed 94 deals worth about $700 million between January and March. Among the 10 CSAs included by PitchBook, Philadelphia trailed only the Bay Area (533), New York (422), Los Angeles (214) and Boston (167). It beat out regions like Seattle (71), Chicago (79) and Washington, D.C. (80).
Philadelphia has "built its venture market into the fifth most active relatively quickly," the report says, even in the face of macroeconomic factors that have been battering the tech and startup sectors.
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"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 says. Startups nationally and locally have continued to deal with uncertain capital markets, along with the fallout from the collapse of Silicon Valley Bank, an incident that local experts said has the potential to haunt startup fundraising in the long-term as investors become more risk-averse.
That was apparent as investment firms lagged startups in activity. Venture funds headquartered in the area closed just two funds in the first quarter: Wayne-based biotech venture capital firm SR One's $600 million fund and Wilmington-based Empire Flippers' $1 million fund. SR One Capital Fund II Aggregator was the largest close in the Mid-Atlantic region and trailed only a few closings nationwide including from Boston-based Bain Capital Ventures at $1.4 billion and Manhattan Beach, California-based B Capital Group's $2.1 billion fund, which were the largest in the nation.
For fundraising deals, the Mid-Atlantic was the second most competitive in the country. Startups in the broader region raised over $6.6 billion in the first quarter, trailing only the West Coast where deals totaled $19.3 billion.
Here were the top venture capital deals local startups struck in the first quarter, according to PitchBook:
- ArriVent BioPharma – $155 million Series B
- Tawkify – $50 million Series B
- Palvella Therapeutics – $38 million Series D
- Fynn – $36 million seed round
- Amalgam – $17 million Series B
- Puzzle – $15 million Series A
- Venatorx Pharmaceuticals – $15 million late stage
- Early Bird Medical – $13 million Series A
- Cornelis Networks – $13 million Series B3
- Sending Labs – $13 million seed round
