Investment in Pittsburgh’stechnology sectorTrends and highlights, 2010-19

► Mega rounds (+$100M) continued and VC investment remained relatively steady at $136.5 billion in 2019 compared to $140.2 billion invested in 2018.

► VCs exited over $250 billion, nearly 80% of which came from VC-backed IPOs.

► The number of US financing rounds increased 2.2% from 10,542 in 2018 to 10,777 in 2019.

► Nontraditional VC investors such as sovereign wealth funds and PE funds are driving larger deal sizes and higher valuations.

National highlights show emergence of corporates and some non-traditional investors

► Investment increased more than 5X from $550 million in 2018 to almost $3.0 billion driven by $2.0 billion of corporate investment and $928 million of venture capital investment.

► The number of local investment deals increased 51% from 2010 to 2019 and 139 unique Pittsburgh area startups attracted funding this year.

► In dollar terms, autonomous vehicles dominated funding, but by number of companies, funding was diversified across software, life sciences, hardware/robotics, materials and industrial technologies.

Pittsburgh draws $3B in investment in 2019

In 2019, 139 Pittsburgh companies attracted close to $3B Investment dollars grew 627% from 2010 to 2019

Source: CB Insights, Dow Jones VentureSource, Innovation Works, PitchBook

Strong trends in number of deals and companies fundedThe number of unique companies funded increased 48% from 2010 to 2019

Source: CB Insights, Dow Jones VentureSource, Innovation Works, PitchBook

Growth in investors, exits, research boost Pittsburgh

► Local companies generated over $10.7 billion in disclosed exit values from 2010 to 2019.

► Pittsburgh companies attracted investment from over 270 firms from around the world in the past 5 years.

► 39 firms made first investment in Pittsburgh in 2019► Pittsburgh stacks up favorably per capita to other regions in the

US, outpacing other emerging tech hubs in terms of deals and/or dollars.

► Our pipeline is strong. Local research universities have deployed more than $10 billion in research funding in the past decade.

Pittsburgh has a diverse array of industries attracting capital

Source: CB Insights, Dow Jones VentureSource, Innovation Works, PitchBook

Unique Pittsburgh companies receiving funding by tech sector

103 exits valued at $10.7 billion from 2010 to 2019 and 8 exits in 2019Representative Deals

GiftCards.com acquired by

Blackhawk Network2016

Net Health acquired by

The Carlyle Group2017

M*Modal acquired by

3M2018

Cancer Treatment Services International

acquired byVarian Medical Systems

2019

Creehan & Company acquired byInovalon

2016

Krystal BiotechIPO2017

Avere Systemsacquired byMicrosoft

2018

VoIP Innovations acquired by

Sangoma Technologies2019

Think Through Learning acquired by

Imagine Learning2016

NoWaitacquired by

Yelp2017

TandemLifeacquired byLivaNova

2018

StelKastacquired by

Globus Medical 2019

Thar Pharmaceuticalsacquired by

Grunenthal2016

ModClothacquired byJet.com

2017

Wombat Security Technologiesacquired by

Proofpoint2018

The Efficiency Network acquired by

Duquesne Light 2019

Firms investing in Pittsburgh companies

3Lines Venture CapitalAltos VenturesAmazon Alexa FundARCH Venture PartnersAspect VenturesAV8 VenturesBlackhorn VenturesBling CapitalBreakout LabsBreakTrail VenturesCapitalGCota CapitalCureDuchenne VenturesFoundation CapitalFounders FundGeodesic Capital

Greylock PartnersHomebrewIllumina VenturesIndie.vcIntel CapitalKeiretsu ForumKleiner Perkins Caufield & ByersLightspeed Venture PartnersLucas Venture GroupMenlo VenturesMotus VenturesNewGen CapitalNorwest Venture PartnersOriza VenturesPartech VenturesPaxion Capital Partners

Plexo CapitalRight Side Capital ManagementRiverwood Capital GroupSalesforce VenturesSequoia CapitalSilverton PartnersSpace Angels NetworkStout Street CapitalTech Coast AngelsTridel CapitalTrucks VCTsingyuan VenturesUberWestern Digital CapitalWestly GroupWRVY Combinator

New England regionBain Capital VenturesGE VenturesHarborlight CapitalHyperplane Venture CapitalL CattertonLearnLaunch Accelerator

Liberty Mutual Strategic Ventures

PillarProvidence EquitySaturn PartnersVentureWell

New York regionAllen & Co.Carbon VenturesDFWEastern Advisors Capital Groupff Venture CapitalGolden SeedsGreat Oaks Venture CapitalGrit Capital ManagementHearst VenturesInsight Venture PartnersKKR

Lead Edge CapitalLevel EquityNew York AngelsPfizer Venture InvestmentsProspect Capital CorporationRed Swan VenturesSony Innovation FundSpace AngelsTechStarsTrimaran Capital PartnersTwo Sigma VenturesUnion Square VenturesValueStream Ventures

California and Western region

Allos VenturesArboretum VenturesAscension VenturesBoeing HorizonXCentennial VenturesChrysalis VenturesCoreNetwork FundDrive Capital

Dundee Venture CapitalEkistic VenturesElevate VenturesFirebrand VenturesKB PartnersLiberty Global VenturesM25 GroupNew Stack Ventures

Origin VenturesRadical VenturesSalix VenturesSerra VenturesStadia VenturesSterling PartnersWest Capital Advisor

Philadelphia regionActivate Venture PartnersCommerce Health VenturesDreamit HealthLeading Edge VenturesMI-12 VenturesNovitas CapitalSeventySix Capital

ABS CapitalAzafran CapitalBilgola CapitalGrotech VenturesHarbert Growth PartnersLavrock VenturesNew Enterprise Associates

Revolution VenturesRise of the Rest Seed FundSaaS VenturesSands Capital VenturesTDF VenturesUpdata PartnersVital Venture Capital

Baltimore/Washington, DC region

Pittsburgh regionActive X-itAdams Capital ManagementAGSMBirchmere VenturesBlueTree Capital GroupDraper Triangle VenturesEagle VenturesIdea FoundryiNetworksInnovation WorksMountain State CapitalNewlin Investment CompanyNext Act Fund

Midwest region

Adiuvo Investment (Poland)Advantech Capital (China)Balderton Capital (UK)DENSO (Japan)Edmond de Rothschild Investment

Partners (France)Forward Partners (UK)Greensoil Investments (Canada)H&M CO:LAB (Sweden)Hatcher Plus (Singapore)

HBM Healthcare Investments (Switzerland)

HBM Partners (Switzerland)Hydra Ventures (Netherlands)Hyundai (South Korea)ITIC (Taiwan)JAFCO (Japan)next47 (Germany)Northern Light Venture Capital (China)

Philips (Netherlands)Renewal Partners (Canada)Runa Capital (Russia)Softbank Group (Japan)Tencent (China)Toyota (Japan)TVM Capital (Germany)Volkswagen Group (Germany)

International

Over 180 unique venture capital firms, angel groups and strategic investors have made investments in Pittsburgh companies in the past five years. The chart below contains a sampling of these firms including 31 firms – listed in bold font –that made their first investments in the region in 2018.

Open Fields Entrepreneurs FundPittsburgh Equity PartnersPittsburgh Life Sciences Green

HousePLSG Accelerator FundRiverfront VenturesStartbotSteelbridge LabsThe Robotics HubTNC VenturesTopanga PartnersUPMC EnterprisesVelocity Fund Partners

Pittsburgh ranked 15th in deals per million residents in 2019among the 40 largest Metropolitan Statistical Areas

Source: Pitchbook and US Census

Pittsburgh ranked 21st in investment dollars per capita in 2019among the 40 largest Metropolitan Statistical Areas

Source: Pitchbook and US Census

Note: The data presented above is based on raw data from the Pitchbook database. Pitchbook omits several of the most significant financing events in the past several years, including major financing rounds raised by Argo AI, Uber ATG and Aurora.

Patent generation and licensing at Pittsburgh’s world-class research universities continue to increase

Source: Carnegie Mellon University, Duquesne University and the University of Pittsburgh

197

280

244

322 333

297

334360

406373

6179 82

96

128

122145

186 180 178

2 0 1 0 2 0 1 1 2 0 1 6 2 0 1 8 2 0 1 92 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5

Licenses, Options, and Other Agreements

2 0 1 7

Patents Issued

2019 Pittsburgh investment highlights

AuroraAmazon, Geodesic Capital, Hyundai, Lightspeed VenturePartners, Sequoia Capital, Shell Ventures, T. Rowe Price, Greylock Partnersand Index Ventures

Gecko RoboticsDrive Capital, Founders Fund, Y Combinator, Next47 andMark Cuban

Argo.aiFord, Volkswagen

AstroboticSpace Angels Network, Innovation Works

DuolingoNewView Capital, Drive Capital, Inside Capital, Capital G, Kleiner Perkins, A-Grade Investments and Union Square Ventures

fifth seasonDrive Capital

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This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.

Neither Innovation Works, Inc., Ernst & Young LLP nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor.