Ven Raju, President & CEO, Innovation Works

Ven Raju, president and CEO of venture capital firm Innovation Works, spoke with Invest: about staying on the forefront of early-stage investment in the Pittsburgh region. “Investment is coming into the Pittsburgh region not only to new companies, but into infrastructure, power, and other elements required for the new paradigm of the AI economy.”

Over the past year, what key changes have most shaped Innovation Works and its role in Pittsburgh’s innovation ecosystem?

Last year, the region saw $1.89 billion of capital inflows into tech companies. In keeping up with the ecosystem, we launched a number of new programs to support early-stage robotics startups in the region, including an accelerator program focused on robotics called Accelerate. This programmatic support provides both capital and support for early-stage startups. The support helps them with customer discovery, customer validation, product development, and go-to-market strategies. We also have a fully operational prototyping lab that helps robotics companies build out their product in our facility. We also launched a dedicated life sciences fund in partnership with Highmark AHN, that invests in life sciences companies. It is envisioned to be able to sustain itself into perpetuity. We deploy capital, garner returns from investments made, and those returns go back into the funds giving us the ability to continue investing in the life sciences ecosystem in the region. 

The UpPrize Social Innovation Challenge introduced a two-track model to support startups. What is its impact?

This long-standing initiative is in partnership with BNY, one of the largest financial service companies in the United States. The premise of the partnership is to bring capital and support resources to help mission-centric businesses that have an impact on the region, the nation, and around the globe. These companies are addressing acute challenges that help society. We curate the top business models and opportunities here in the region, fund them, and put them through targeted programming that helps with the basics of running and scaling a startup. This year, we started a two-track model for early and advanced stages because we saw a number of companies applying that were beyond this early stage and had evolved models further along in the business cycle. We wanted to offer an avenue for them as well. 

What makes Pittsburgh a uniquely strong place for entrepreneurs and innovators to build companies, and what advantages does it offer compared to other U.S. markets?

Pittsburgh is experiencing a tremendous surge in investment. Pittsburgh has strong clusters in AI, life sciences, and robotics. These clusters have benefitted from recent macro tailwinds.  We also have two very dominant R1 universities in the way of CMU and the University of Pittsburgh. Pittsburgh is a capital-efficient place to start and scale a business. We are seeing investment in the Pittsburgh region, not only to companies, but also into infrastructure, power, and other elements required for the new AI economy. 

What do you see as the defining trends and challenges for the region’s entrepreneurial ecosystem, and how is Innovation Works positioning itself to address them?

As we are seeing a surge of investment in Pittsburgh, the vast majority of that capital is coming from outside the region. IW is the most active early-stage investor in the state of Pennsylvania and one of the most active in the United States. We are the largest provider of capital in the region for early- and growth-stage startups. We have increased that share organically by launching a number of funding vehicles and funds over the course of the last 18-24 months to help support regional startups. 

What are your top goals and priorities for Innovation Works for the next two to three years?

Our goal is to ensure that IW is able to support the next generation of innovation in the region. As the ecosystem scales and as capital inflows grow into the ecosystem, there are more opportunities to build and scale these companies. We want to ensure that IW’s programming, as well as its investment vehicles, appropriately support the new paradigm in the Pittsburgh technology startup ecosystem. We are constantly evolving our programming and increasing our share of investment in the region to support companies and create jobs. With tailwinds in AI, robotics, and life sciences, Pittsburgh is well-positioned to harness these developments.