Pittsburgh’s technology companies attracted $3.12 billion in venture capital funding last year, led by investments in artificial intelligence, robotics and autonomous vehicles.

It was the region’s second-highest year for tech investment behind 2021, which saw a record $3.59 billion raised for local industries, according to the latest report from Ernst & Young LLP and early-stage investment organization Innovation Works.

Pittsburgh’s surge comes at a time of declining venture capital investment in the technology industry. National fundraising last year declined 29.6 percent from 2022 and 50.9 percent from the industry’s record-breaking 2021.

While Pittsburgh’s total deal count declined 5.7 percent last year, it remained far ahead of the nation’s 22.6 percent decrease.

More than 130 Pittsburgh-area companies attracted investments worth a disclosed average of over $27 million, a 300 percent year-over-year increase.

“The strength and resiliency of the regional tech ecosystem was reaffirmed in 2023, despite macro headwinds and significant contraction in venture funding nationally,” said Ven Raju, president and CEO of Innovation Works. “Almost every indicator related to the local fundraising environment saw a material uptick.”

Pittsburgh cracked the top 10 nationally in deals involving the artificial intelligence (AI) and autonomous vehicle (AV) industries. According to the report, corporate investments rose nearly 800 percent thanks to private investments made in AV start-ups Aurora and Stack AV, formerly Argo.ai.

Gecko Robotics, a technology engineering company and partner of Pittsburgh International Airport’s xBridge innovation program, was also one of the leading Pittsburgh companies with over $100 million raised in 2023.

Gecko has aided the construction of PIT’s new $1.5 billion terminal by utilizing cutting-edge sensors to measure and collect data on the concrete used to support the terminal’s vertical steel tree columns. In addition, Gecko technology helped enable thorough inspections of the building’s fire safety infrastructure.

The report also identified hardware and robotics as the fastest emerging investment trends in Pittsburgh. The segment accounted for 68 percent of all investments regionally, up from 39 percent in 2022.

Satellite offices

Pittsburgh’s emergence as a tech hub has attracted satellite offices for global technology companies. In 2023, 57 investors from around the world made their first investments in the region.

That growth has continued in 2024, most notably with Excelitas Technologies recently selecting Pittsburgh as the site of its next headquarters, citing its renowned life sciences and robotics technologies. Committed to the region via a 12-year lease agreement, Excelitas will create at least 250 jobs in Pittsburgh over the next four years and invest $2.3 million in its move.

The growth of the Pittsburgh tech scene has also coincided with the addition of more air service to other major tech centers. Southwest Airlines, for example, began nonstop service to Austin, Texas from PIT in November 2021. Less than two years later, Southwest increased its Pittsburgh-Austin service from weekend-only to daily, year-round, enabling the market to grow further.

Similarly, Alaska Airlines began nonstop service between Pittsburgh and Seattle in 2018 fueled, in part, by the growing technology sectors both cities have in common.

Amazon and Microsoft, both headquartered in Seattle, operate large regional offices in Pittsburgh while native companies like Panopto and Duolingo have added space in Seattle to expand their operations. Since starting service, Alaska has expanded its Pittsburgh-Seattle route to two daily flights.

Meanwhile, United Airlines operates its two daily flights nonstop between Pittsburgh and San Francisco, linking Western Pennsylvania to Silicon Valley.

Many tech industry giants born in Silicon Valley, a short drive south from SFO, have built outposts in Pittsburgh, including Google, Apple and Facebook, and they seek efficient travel options to get to and from their California headquarters.