Pittsburgh ranked in Top 5 for emerging startup ecosystems, says report

The Pittsburgh tech industry has exploded over the years, and that growth has earned the region a top five ranking among up-and-coming startup ecosystems from a new report by policy advisory group Startup Genome.

The inclusion has drawn praise from local leaders, but they also acknowledged Pittsburgh has room for improvement, especially among attracting seed funding from venture capital firms.

Pittsburgh was ranked fifth in North America for “Regional Challengers” in the Global Startup Ecosystem Report 2022. Boosted by billion-dollar evaluations for language-learning company Duolingo and large funding acquisitions for autonomous-driving company Aurora Innovation, Pittsburgh was pushed into the top five of Regional Challengers this year after failing to make this ranking in 2021.

Duolingo received a $6.5 billion initial public offering in August 2021, making it Pittsburgh’s first unicorn tech company. And the region has attracted several leading firms in autonomous-vehicle technology, including Aurora, Argo AI, Motional, Waymo, and others.

Allegheny County Executive Rich Fitzgerald praised the Pittsburgh region’s inclusion in the report, and the growth the local tech industry has seen. He noted that since 2021, Pittsburgh moved from 23rd to 13th among the world’s emerging startup ecosystems.

“The Global Startup Ecosystem Report 2022 released this morning underscores what we’ve seen here in the Pittsburgh region over the last few years,” said Fitzgerald. “We have a growing ecosystem that has access to talent, is affordable, has a great quality of life, and is increasing in diversity.”

Fitzgerald said the region’s AV industry is not the only thing driving tech growth. He noted Pittsburgh’s life science and robotics companies are expanding.

The report said Pittsburgh’s life science and robotic industry has seen a funding boom and is diversifying the region’s startup economy. For example, clinical stage neuroscience company Cognition Therapeutics, which is based in New York but has a research lab in South Side, raised $45 million in its October 2021 IPO.

But, Fitzgerald added that the Pittsburgh region still has room for growth and leaders shouldn’t rest on their laurels

“This ‘community of purpose-driven builders, makers, and innovators’ are not done,” said Fitzgerald. “We will continue to advocate for state legislative changes that allow highly automated vehicle companies to grow and thrive here.”

Pittsburgh Technology Council president Audrey Russo said there are signs in the report that Pittsburgh has a ways to go in order to catch other high-achieving tech regions.

Russo noted Pittsburgh media seed round funding for local tech startups is just $50,000, compared to the global average of $671,000.

“We do really poorly when it comes to seed investment,” said Russo. “We need people who have wealth and want to diversify and want to play with some high risk in investing here.”

She praised Pittsburgh’s startup ecosystem for having steady growth, but called the ecosystem immature compared to other bigger regions, who have seen exponential investment.

“Our growth has been steady, not astronomical,” said Russo.

Russo said Pittsburgh has been good at getting tech companies to move research and development operations to the region, but not at attracting venture capital firms or individuals who will take risks investing.

She said Pittsburgh’s startup ecosystem’s total $11.6 billion evaluation is weighted heavily by Duolingo, and if the region is going to progress beyond an emerging ecosystem it needs to foster a culture of more seed funding for more startups.