\u201cWe\u2019re very, very leery of AI companies right now.\u201d<\/p>\n
Malcolm Handelsman, Active Angels Network<\/p>\n
In Pittsburgh, about 75% of the total raised went to just two startups: AI security firm Gray Swan\u2019s $40 million raise<\/a> and AI hardware company Hellbender\u2019s 12.5 million raise<\/a>.\u00a0<\/p>\n Local investors aren\u2019t necessarily looking for AI companies, though, according to Malcolm Handelsman, managing director of the Active Angels Network<\/a>, a Pittsburgh-based group of roughly 40 angel investors that participated in the latest Hellbender raise.\u00a0<\/p>\n \u201cWe\u2019re very, very leery of AI companies right now,\u201d Handelsman told Technical.ly.\u00a0<\/p>\n AI startups can be great today and gone tomorrow if big firms like OpenAI or Anthropic take notice and decide to pursue similar ventures, so in this case, \u201cwe did not look at Hellbender as an AI company,\u201d Handelsman said, \u201cwe looked at them as a robotics company.\u201d<\/p>\n The angel group had its eye on Hellbender for at least three years before investing, according to Handelsman. What ultimately sealed the deal was the combination of Hellbender\u2019s traction in the market, the investor\u2019s relationship with the management team and the startup\u2019s relatively low valuation \u2014 the group generally invests when valuations are between $15 and $50 million, he said.\u00a0<\/p>\n Healthcare-focused companies also made a healthy showing, making up about 15% of the top deals.\u00a0<\/p>\n The region\u2019s top ten deals:\u00a0<\/p>\n Gray Swan (AI security)\u2014 $40 million, Series A<\/a><\/p>\n Hellbender (AI hardware) \u2014 $12.5 million, seed<\/a><\/p>\n Contra Healthcare Solutions (in stealth) \u2014 $4.1 million, early-stage VC<\/p>\n IK Start USA (sports streaming platform) \u2014 $4 million, seed<\/p>\n ThoroughCare (digital healthcare platform) \u2014 $2.3 million, later-stage VC<\/p>\n Aethl Bio (regenerative healing therapeutics) \u2014 $1.6 million, seed<\/p>\n NOCTEM Health (insomnia management platform) \u2014 $1.5 million, later-stage VC<\/p>\n Duo Oncology (cancer-killing drug development)\u2014 $1.4 million, later-stage VC\u00a0<\/p>\n Pipe Force (subsurface inspection tech) \u2014 $1 million, seed<\/p>\n Avenue to Close (real estate) \u2014 $12,950, angel funding<\/p>\n Besides Handelsman\u2019s angel group, the only local investor that participated in the quarter\u2019s top deals was Magarac Venture Partners<\/a>, which joined both Gray Swan\u2019s and Hellbender\u2019s raises.\u00a0<\/p>\n A majority of the Active Angels Network\u2019s investments over the last four years have gone to companies outside the Pittsburgh region.\u00a0<\/p>\n \u201cThe companies in Pittsburgh were not as strong as some of the companies outside of the region,\u201d Handelsman said, but he\u2019s noticed somewhat of a shift in the landscape over the past year with new AI, robotics and life sciences startups.\u00a0<\/p>\n Investors are looking for companies that clearly solve a worthwhile problem, have a strong team and show early signs of traction, like a consistently growing customer base and revenue, according to Handelsman.<\/p>\n \u201cYou can have a great team, but if you have a lousy product, you may not be successful,\u201d he said.\u00a0<\/p>\n Another possible factor affecting local investment is a lack of fresh funds flowing into VCs.\u00a0<\/p>\n Pittsburgh-based firms haven\u2019t raised additional funding to date this year, according to PitchBook\u2019s report, and this tracks with national trends.\u00a0<\/p>\n In the first half of the year, almost 50% of all the money that investors, or limited partners (LPs), put into VC funds went to only three firms, according to Nizar Tarhuni, executive vice president of research and market intelligence at PitchBook. This means smaller firms across the US have fewer funds to deploy.\u00a0<\/p>\n \u201cLPs aren\u2019t spreading bets anymore,\u201d Tarhuni said, \u201cthey\u2019re consolidating around track records and brands, a response to five years of thin distributions. This year\u2019s numbers will look like a recovery, but for most of the industry, it likely won\u2019t feel like one.\u201d<\/p>\n The lone exit\u00a0<\/p>\n There was one local exit during the quarter.\u00a0<\/p>\n Idelic, a commercial trucking analytics company founded in 2016, was acquired<\/a> by Descartes Systems Group in April for $28 million. Before the acquisition, Idelic had raised approximately $38 million.\u00a0<\/p>\n One of Idelic\u2019s lead investors was local firm Birchmere Ventures, which participated in the company\u2019s seed, Series A and Series B rounds, according to PitchBook.<\/p>\n Another exit during the quarter \u2014 humanoid robotics company Agility\u2019s merger and pending $2.5 billion IPO<\/a> \u2014 was not counted in Pittsburgh\u2019s totals since Agility is technically headquartered in Oregon.\u00a0<\/p>\n![\"chart](\"https:\/\/www.newsbeep.com\/us-pa\/wp-content\/uploads\/2026\/07\/1784199492_544_thumbnail.jpeg\")
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