Philadelphia area sees venture capital investment grow more in Q1 than any other US metropolis

The region saw the largest first-quarter increase in seed funding of major metropolitan areas in the country this year.

Venture capital investment in Greater Philadelphia grew 71% in the first three months of 2022, according to a new report from analytics firm CB Insights.

That’s more than twice as much as Atlanta, which saw 30% growth, and nearly four times as much as Dallas, which saw 18% growth.

These are the only three major metropolitan areas in the country where venture capital funding did not decline from the fourth quarter of last year.

The Philadelphia area saw $1.5 billion in venture capital investment in the first quarter of 2022, compared to $874 million in the last quarter of 2021.

“I’m pleasantly surprised with this quarter,” said Dean Miller, president of the Philadelphia Alliance for Capital and Technologies, Told Technically. “This is good news for the Philadelphia market. This shows us that it is still an attractive location for business.

The largest cash injection, $350 million – almost a quarter of the full $1.5 billion, went to the Center for Breakthrough Medicines, a King of Prussia-based biotech company. The money came entirely from a South Korean investment company called SK Inc.

There were three other venture capital investments worth over $200 million, all of which went to software and internet services companies.

Wilmington’s Marlette Funding, an online lending company, secured $225 million from the Healthcare of Ontario Pension Plan and Davidson Kempner Capital Management.

A Philadelphia engineering analytics company called dbt Labs has secured $222 million from an array of investors.

Velvet, an online marketplace for private funds, has secured $200 million from Yolo Investments, an Estonian company.

Metro Philly set its record for venture capital funding in the first quarter of 2021, according to the Philadelphia Business Journal reports.

Then there was $1.9 billion in investments. Companies in the region also raised a record $8.1 billion last year. The region broke its previous record of $3.1 billion in the second quarter of 2021.

About $3.5 billion of that money went to GoPuff, a Philadelphia-based food delivery company that has rapidly expanded nationwide in recent years.

While this outsized success may upset the average a bit, it’s no reason to be less impressed with Philadelphia’s rise.

The region continues to experience the strong growth in venture capital it saw in 2019, before the pandemic, and that expansion is spreading across multiple industries and many different startups, Miller said.

The $1.5 billion was spread across 80 deals last quarter, more than double the 38 deals recorded by CB in the last quarter of 2019.

“It’s really good to continue the trend of increasing deal counts, which is really the best marker of the overall scale of increased growth in the venture capital ecosystem here,” said said Miller.

There are several reasons why Philadelphia does so well when it comes to raising venture capital, Inc. reported.

The city has always been a prime location for top talent given the large number of universities here.

In the past, many of these students moved to larger metros after graduation. But now they are more likely to stay put, because the rents in places like New York and Boston grew at a much higher rate.

Before the pandemic, the city had many incubators and coworking spaces that made it attractive for small and new businesses.

The appeal of this benefit may have faded a bit with the onset of the pandemic and remote working, but there’s still plenty of office space in Philadelphia and that’s relatively affordable to nearby subways like New York and DC

The fact that the area is located right in the middle of these two important localities also adds to its appeal.

In the first quarter of this year, Philly-area companies accounted for about 2.5% of the $71.2 billion in venture capital funds raised nationwide.

That’s far less than Silicon Valley and New York’s 40% and 16%, respectively, but still nearly 350% compared to the $430 million the region raised in the first quarter of 2018.

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