The Houston area has quickly become one of the country’s most important emerging technology hubs.
Over the past few years, entrepreneurs, investors, academia, local government, and the corporate sector have come together to unite, develop and promote the Houston startup ecosystem; and the progress is impressive. Today, Houston offers access to talent, funding and key clients, as well as a strong support system necessary for the development of young startups.
Each quarter, Josh Pherigo, director of research and data analytics at the Greater Houston Partnership, reviews, from data, the region’s momentum in building a thriving innovation ecosystem through the analysis of venture capital activity and key trends.
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Venture capital funding hits record $ 1.2 billion in one year
Earlier this year, Houston startups set a record raising $ 1 billion in venture capital funding for the first time in four quarters. Now they have raised the bar again. For the four quarters ending Q2 / 21, Houston companies raised $ 1.2 billion in venture capital funding, nearly double the total for the same period last year.
The last quarter’s transportation included $ 373 million across 31 transactions. The recipients included some of the most promising tech startups in the ecosystem. Here are several notable offers from Q2 / 21:
- ColubrisMX, a healthcare technology company developing surgical robots, raised $ 76 million (Series B)
- Cancer-Fighting Life Sciences Firm Tvardi Therapeutics Raised $ 74 Million (Series B)
- iNitrile, maker of a safer glove dispenser for healthcare workers, raised $ 33 million (round 1)
- Fervo Energy, a cleantech company developing geothermal energy, raised $ 28 million (Series B)
- Syzygy Plasmonics, a chemical start-up, raised $ 23 million (Series B)
- Bivacor, a healthcare tech company creating an artificial heart, raised $ 19 million (Series B)
For a full list of Q2 VC transactions, click here.
Cart.com establishes itself as one of the best startups in e-commerce
One of the most promising tech companies to emerge from the pandemic is e-commerce as a service company Cart.com. Founded on November 20, the company has already raised $ 140 million in venture capital for its end-to-end purchasing platform.
CEO Omair Tariq previously served as CFO of Blinds.com, where he developed the $ 100 million revenue website before it was acquired by Home Depot in 2014. Along with Cart.com, Tariq and his three co -Founders hope to disrupt the e-commerce industry by providing an integrated platform for retailers to grow online.
The company is backed by seven venture capitalists, including PayPal Ventures and Mercury Fund, based in Houston. In early August, investors closed a $ 98 million Series B round that valued Cart.com at $ 403 million, making it the third highest-valued tech startup in Houston. If the results live up to the high expectations of investors, Cart.com could become a flagship company for Houston’s tech economy.
Pandemic Technology Trends: Healthcare, FinTech and Clean Energy Leading the Way
Seventeen months since the onset of the first lockdowns, we are getting a clearer picture of the impact of the pandemic on individual technology segments in Houston. While disruption from COVID-19 has made it more difficult for investors to find new deals, fundamental changes in daily life have created new opportunities for many technology sectors.
In Houston, overall venture capital transactions have fallen about 20% in the past year. But the companies that received funding got more. The average deal size doubled as investors invested money in technology to make life safer, more sustainable and more productive in a year like no other.
Healthcare tech companies like Medical Informatics, whose software allows doctors to monitor patients remotely, were in greater demand than ever. So are software companies that facilitate online transactions, such as treasury software provider HighRadius, which has seen its valuation soar to $ 3.2 billion. Clean energy has also remained one of the main verticals as sustainability efforts have gained momentum. Here’s a look at the top recipients of Houston venture capital deals by technology segment.
GoCo, WizeHire, Onit Do List Inc 5000
The latest Inc. 5000 list of fast growing companies was released in August and 90 Houston companies were selected. Among those chosen were several notable SaaS companies supported by VC, including GoCo.io, an HR software platform, WizeHire, a provider of recruiting software, and Onit, a developer of automation software for the legal industry. Companies qualify for the annual list if they generate at least $ 2 million in revenue and have at least five years of sales. They are ranked based on revenue growth over the past year. Together, the 90 Houston companies on this year’s list created 4,500 jobs in ’20.
Learn more about Houston’s tech industry and read the latest report examining the local ecosystem.