During the second quarter of 2022, 19 Pittsburgh tech companies raised a combined $103.8 million from venture capitalists, economic development entities, corporate investors and high-net-worth individuals.
It handily topped the second-quarter dollars in 2021 and 2020, but was also the lowest three-month tally in a year, according to data from the PitchBook-NVCA Venture Monitor. The quarterly report by Seattle-based PitchBook and the National Venture Capital Association was released on Thursday.
Recipients spanned a variety of industry sectors, and the quarter was not distorted by a massive raise by a single company.
The three largest local transactions were relatively modest. PitchBook listed those as IRALOGIX, $14 million; Gridwise, $13 million; and OtterTune, $12 million.
IRALOGIX confirmed a $22 million Series C funding round on July 13, a mix of venture capital and debt. The fintech firm’s paperless white-labeled recordkeeping services enable customers to easily customize their IRA offerings.
Gridwise announced on May 26 that it had closed a $12.7 million Series A round led by Crosslink Capital Inc. Gridwise, founded in 2017, is the maker of the GridWise: Gig-Driver Assistant app for Uber, Lyft and other contract workers.
OtterTune on May 10 said it raised $12 million in a Series A funding round led by Intel Capital and Race Capital. The Carnegie Mellon University spinout is a database automation and optimization platform that observes runtime metrics and then carries out machine learning to recommend and deploy configuration settings, improving performance, uptime and efficiency.
Nationally, $53.9 billion was invested into 2,821 deals during the three months ended June 30. PitchBook said market tightening continued during the second quarter, and the IPO window was effectively slammed shut as venture capital-backed initial public offerings fell to a 13-year quarterly low with just eight completed.
With 9,421 deals during the first half of 2022 at a combined $144.2 billion, it is unlikely that activity will top the record $341.5 billion pumped into 17,637 companies during full-year 2021. But this year will almost certainly rank second — during 2020, $167 billion was invested in 12,578 companies, and $146.1 billion was pumped into 12,899 in 2019.
Venture capitalists are poised to invest with more than $230 billion in their coffers. Almost 3,000 funds have closed since the beginning of 2019, so the VC industry is likely to see the trends of steady deal count but readjusted pricing continue until certainty returns to the market, PitchBook said.
“As the market continues to react to volatility over the past six months, the venture ecosystem demonstrates strength as dry powder reaches new heights and fundraising levels surpass more than $100 billion for the second consecutive year,” John Gabbert, PitchBook founder and CEO, said in a prepared statement. “Exits remain extremely low while late-stage companies act with caution as a result of bearish public market activity. There are still uncertainties as to what to expect in the second half of the year. However, market indicators show resilience to weathering the potential economic downturn.”
As for the Pittsburgh region, Catherine Mott, co-managing partner of BTVC Fund I, said deal flow has slowed, "but it may be the cyclical summer retraction in activity," rather than concerns about inflation and potential recession. But she's also optimistic "from seeing local new funding rounds close."
