Philly’s venture capital boom sees new heights

Despite pandemic disruptions and labor shortages, Philadelphia’s venture capital firms thrived in 2021.

• The Philadelphia Alliance of Capital and Technologies (PACT) said it’s “the highest market we have ever hit,” placing the city sixth in the nation in terms of deals.

By the numbers: Starting funding flowed into Philly last year, resulting in 441 deals valued at $8.1 billion, per data from PitchBook. That’s a 299% jump compared to 2020.

• In just the fourth quarter of 2021, the Philly area saw $2.6 billion invested in 90 deals.

The big picture: The U.S. venture capital industry saw an initial period of pandemic paralysis back in 2020, but quickly adjusted and eventually flourished, Axios’ Kia Kokalitcheva writes.

• The industry’s top four markets — the Bay Area, New York, Boston and Los Angeles — control more than half of the venture capital deal counts.
• The Bay Area dominates every other region, making up a third of all deal value in the U.S.

Between the lines: While Philly lags behind the top four, the area has churned out some notable companies that have raised significant money in the last year, including GoPuff, Misfits Market and dbt Labs.

• The metro has also seen a ton of recent exits, which occur when a company gets sold or goes public, including Immunome and Annovis Bio.

Of note: The biotech and enterprise technology industries attract the most venture capital funds in the region.

What they’re saying: Dean Miller, the CEO of PACT, isn’t phased by the boom, but he said he’s surprised that Philly was able to leapfrog markets like Austin, Chicago, and Denver, by number of deals.

• “Philadelphia is a big community that has a growing and robust base of entrepreneurs, as well as capital sources in multiple industries. It’s not a one-trick pony,” he said.

Miller also noted that Philly now has what he calls “serial entrepreneurs” — people who start new companies and, after each success, “put money back into the ecosystem to encourage the next generation.”

Ellen Weber, executive director of Philly-based Robin Hood Ventures and Mid-Atlantic Diamond Ventures, said the pandemic has helped her save time and make more connections with other companies.

• She said that calling companies for an hour or two is easier than “having to make a date and go somewhere,” which can take an entire day.