ShareThis Page

Pittsburgh tech startups continue to attract investors

Aaron Aupperlee
| Tuesday, March 14, 2017, 9:33 a.m.
Rich Lunak is president and CEO of Innovation Works, a business accelerator based at Nova Place, a hub for innovative companies located in the former Allegheny Center on Pittsburgh’s North Side.
James Knox | Trib Total Media
Rich Lunak is president and CEO of Innovation Works, a business accelerator based at Nova Place, a hub for innovative companies located in the former Allegheny Center on Pittsburgh’s North Side.

Pittsburgh technology startups bucked a national trend by attracting more venture capital investment in 2016.

Funding for Pittsburgh-area companies from venture capital firms increased 8 percent in 2016, jumping from $217.4 million in 2015 to $235.1 million, according to a report by Innovation Works and Ernst & Young released Tuesday.

Nationally, venture financing dropped 32 percent in 2016, falling from $77.3 billion in 2015 to $52.3 billion.

“In a year when venture capital dropped significantly across the United States, Pittsburgh was up in every category,” said Rich Lunak, CEO of Innovation Works.

The report found that in 2016:

• Total investment in Pittsburgh-area technology companies was up nearly 35 percent to $376 million;

• Investment from venture capital firms rose 8 percent to $235.1 million;

• The number of deals increased from 35 in 2015 to 39;

• Seven companies raised $15 million or more; only two did in 2015;

• Ten companies were acquired by larger firms in deals that topped $275 million.

Pittsburgh moved up one spot in the national rankings of dollars invested per person, from 18th in 2015 to 17th in 2016. Lunak said Pittsburgh has solidly distanced itself from similar cities such as Cincinnati, ranked 19th, and St. Louis, ranked 20th, but thinks the region has the potential to break the top 5, a group dominated by San Francisco, Silicon Valley, Boston, San Diego and Austin, Texas.

“A big needle mover can be large successes. We have a lot of successes, but they tend to be more mid-market types,” Lunak said. “If we could score a really big IPO, that would be great.”

Lunak said he's keeping an eye on firms like Duolingo , a popular language learning app; Wombat Security Technology , an information security company; and Avere Systems , a cloud-based data storage company, for potential IPOs.

“There are companies that people don't always hear about, but they are extremely fast growing startups in our region,” Lunak said.

Michaela Kron, a spokeswoman for Duolingo, agreed with Lunak that an IPO of a Pittsburgh startup would greatly help to elevate the local tech community and the city but wouldn't comment on whether the East Liberty company is mulling such a deal. Joe Ferrara, president and CEO of Wombat Security Technologies, said the company was flattered by Lunak's comment but believed any discussion of an IPO was premature. Avere had no comment on a possible IPO.

Aaron Aupperlee is a Tribune-Review staff writer. Reach Aupperlee at or 412-336-8448.

TribLIVE commenting policy

You are solely responsible for your comments and by using you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.

click me