Venture capitalists are realizing record results from their tech investments, according to the quarterly PitchBook-NVCA Venture Monitor, released on Thursday, and Pittsburgh’s no longer strictly on the sales side of exit activity.
When a company is sold or goes public, investors exit. Duolingo’s initial public offering in July snapped a roughly double-decade drought here. Activity continues with Cognition Therapeutics Inc.’s IPO on Oct. 8 and Aurora Innovation expected to trade publicly as of Nov. 4 following its anticipated merger with Reinvent Technology Partners Y, a special purpose acquisition company.
More are anticipated in the coming months. Cascadia Acquisition Corp., a SPAC sponsored by a Seattle investment bank, said last month that it’s looking for a deal in Pittsburgh.
Nationally, exits brought more than $582.5 billion across 1,150 deals in just nine months, surpassing $500 billion for the first time and doubling the previous record, set in 2020, according to PitchBook. Of that, IPOs accounted for 88.2% of total exit value at $513.6 billion.
The trend is very important to Pittsburgh because, in the past, companies would grow to a certain stage and be acquired with the clout and decision-making winding up elsewhere.
”You’re seeing companies developed in the region staying in the region and having that larger liquidity event,” said Ven Raju, CIO at Innovation Works. “Historically, as companies developed and got further along, they’d go to the west coast because their investors were based there or the east coast because their clients were based there.”
What’s changed, Raju believes, is having the right kind of support.
“We have an ecosystem that has capital, entrepreneurs, research institutions,” he said. “All of that is really starting to show in the numbers.”
Aurora, in particularly, is crucial as the region is becoming one of the “two or three centers” for autonomous vehicle technology in the world, said Jay Katarincic, managing director of Draper Triangle Ventures and a founding partner of Magarac Venture Partners. Technology developed here for self-driving vehicles has frequently been sold to suppliers, manufacturers or companies outside the region in the past.
“Now you’re seeing us develop our own companies, taking them through the life cycle rather than having someone take the technology and build it into a profitable company,” Katarincic said.
