The city of Pittsburgh’s startup community had a record year in 2017, with upwards of $687 million being raised from investors according to a report done by Innovation Works and Ernst & Young LLP.
A significant portion of the funds can be attributed to Ford’s investment in Argo AI, a company acquired by the automaker for the purpose of spearheading their self-driving car initiative. The investment roughly approximates to $200 million a year, making up almost one third of the total investment made in the city’s startup scene. Another local artificial intelligence firm, Petuum Inc., has received a sum of $93 million from Softbank, a Japanese investment bank who also has equity in Uber. These are two of the largest financing actions that the Steel City has ever seen in its private technology sector.
Concurrently, the city’s universities reported that the annual aggregate number of technology licenses granted has doubled and the number of new patents has tripled from 2016 to 2017. University-based startup incubator programs have also pumped out a 10-year high in new companies.
Outside of the realm of startups, however, the overall amount of venture capital funding in Pittsburgh has decreased. This is largely due to the older and much larger firms in the region not closing new deals in recent years. While this trend is concerning for more established firms seeking investment in financing rounds, it highlights the new direction of Pittsburgh business enterprise: an increased focus on the city’s growing supply of early stage companies.