While the overall VC picture looked pretty grim in 2022, some bright spots emerged that may tell us something about the future direction of the innovation economy. Until recently, best known as a leading indicator of decline, Pittsburgh and its tech startup scene are showing impressive signs of life. In 2022, it experienced a remarkable increase of 15% in VC investment over 2021, bucking the trend of the broader national decline of 30%. The reasons behind this reversal tell a different and hopeful story about the future, so we decided to take a closer look.
Recently, One America Works pulled together a group of investors from across the country, including Drive Capital, Revolution, Comeback Capital, Foundation Capital, Tech Square Ventures, Armory Square Ventures, plus local VCs. With this remarkable crew we embarked on a 36-hour deep dive tour of the Pittsburgh tech ecosystem, revealing a wide range of opportunities and well-grounded sources of innovation embedded deep in the region. Our entourage of 17 venture capitalists brought a unique perspective blending local investors from Pittsburgh with others from Silicon Valley, Washington, D.C., Austin, New York, Atlanta, and beyond.
Kicking off our journey, we were briefed by Ven Raju, a former Venture Capitalist and current CEO of Innovation Works, who provided us with a comprehensive overview of the local innovation ecosystem and the case for their investment strategy.
A distinctive facet of Innovation Works (IW) is the division of its investment efforts into a range of specialized accelerator programs known as alphaLab, alphaLab Gear, alphaLab Health, and the recently launched Robotics Factory. This unique approach ensures that industry experts from each vertical serve as advisors, empowering these companies to make substantial progress. Moreover, IW operates a seed-stage fund called Riverfront Ventures helping to scale some of those who have gone through one of the accelerators. Between all of these programs, IW is consistently recognized as one of the most active early-stage investors across the nation.
It became clear that there are three tracks of innovation in Pittsburgh. The two better-known tracks, Computer Science and Robotics, are led by Carnegie Mellon University. The third is a lesser-known but well-established Life Science track led by the University of Pittsburgh, which ranks 3rd nationally in NIH research grants, investing billions into R&D annually.
Accompanying this expedition was the spirit of entrepreneurial innovation thriving within Carnegie Mellon University, helmed by the seasoned five-time entrepreneur Dave Mawhinney. Under his leadership, Carnegie Mellon has been steadily forging its path to becoming a top-tier entrepreneurial institution, producing transformative startups and delivering handsome returns for investors. Central to this success is the Swartz Center, named after Accel founder Jim Swartz, which continues to amplify its impact by introducing new accelerator programs, an early-stage fund, and an extensive alumni network.
A few of the 22 companies we saw include Mach9, Blastpoint, and Shift Robotics, exemplifying the university-affiliated entrepreneur’s prowess in deep-tech disciplines, with expertise spanning geospatial technology, AI analysis, and advanced robotics. Always willing to see what it may be like living in the future, I literally stepped into Shift Robotics remarkable Moonwalkers and ran while simply walking. My 1876-styled Burns Boots were immediately updated for future travel, an innovation that is shipping in fall 2023 and is already building an online fanbase.
The big takeaway is that Pittsburgh is thriving and has a lot to share with the world. We also captured the day with a film crew and will release a documentary-style film in September 2023 of what we found. Stay tuned.
