numbers game

Data-focused Houston company arms startups with the AI tools they need to grow

It's all a numbers game, and Mercury Data Science is about setting up startups for success. Getty Images

While some say a picture is worth a thousand words, having the right data can be make or break. Houston-based Mercury Data Science is using data and artificial intelligence to paint some really specific pictures for its clients.

MDS was born out of a need for Houston-based Mercury Fund's portfolio companies that wanted a firmer handle on artificial intelligence and data science.

"Three years ago, a number of Mercury Fund portfolio companies and potential investments began to have increasingly important data science and AI components," says Dan Watkins, co-founder and managing director of Mercury Fund. "Mercury's partners wanted a deeper understanding of AI, to understand how the cutting edge meets industry use cases."

Mercury Fund's first move was to tap data scientist Angela Wilkins to lead some training, which then turned into even more workshops and advising. The companies ranged from early seed stage startups to companies that had raised over $100 million — and they wanted Wilkins' help, either with the basics of data science or execution of analytics.

"In fact, many of the more established companies were sitting on data assets with plans to build AI-enabled products but didn't have the time or people to really start that process," Wilkins says. "After helping a few companies, we realized the need was pretty deep, and bigger than the Mercury Fund portfolio."

Wilkins, who serves the company as CTO and co-CEO with Watkins, has seen her efforts grow MDS client base. InnovationMap sat down with Wilkins to see how far MDS has come — and where it's going.

InnovationMap: What sort of problems and data solutions are you providing clients?

Angela Wilkins: We love projects that have a direct impact on human health. In health, we build machine learning driven products to create new forms of digital diagnostics to help improve diagnosis in areas like cognitive functioning and depression. We have helped several therapeutics companies accelerate drug discovery and development by extracting insights from biological and imaging data. We have internal tools that use natural language processing to extract knowledge from millions of scientific publications and patents.

We have also worked quite a bit in consumer behavior and some of our physics-oriented data scientists are now working on noise reduction in geophysics technologies.

IM: What feedback do you get from clients?

AW: Company leaders in every sector are feeling the pressure to gain the advantages of AI or risk falling behind. There are many expert level teams available to Fortune 500 organizations. We are one of the very few teams that is entrepreneurial and agile enough to work with earlier stage, high growth organizations.

IM: How does MDS work with Mercury Fund? Has that relationship evolved over the years?

AW: We continue to work with the Mercury Fund portfolio companies but that is a smaller part of what we do. We are venture backed ourselves, and have now become a Mercury Fund portfolio company, with the same growth ambitions as all venture backed companies.

IM: Recently, MDS has seen some growth. How many employees have you added and are you still hiring?

AW: We are up to 20 employees, mostly data scientists, many with 5 to 8 years of experience working in AI, bioinformatics, and data science to provide insights and build products. We are always looking for great data scientists and data engineers to join our team. We also started a fellowship position for recent graduates, and so we can identify and train the next generation of data scientists

IM: What's been the biggest surprise for you as MDS has grown?

AW: We have been able to create this unique culture that thrives on diversity of thought and background. Half of our team is women. We are solving hard problems that benefit from the creativity you get from a wide variety of views.

IM: Where are MDS clients based?

AW: We have clients from San Francisco to Basel. We have learned how to build an integrated, high communication team with the client, so location is not critical.

That being said, we are active in and committed contributors to the Houston innovation ecosystem. Many of us are from a computational biology and bioinformatics background with deep roots in the Texas Medical Center institutions. Houston has amazing talent and we want to show the data scientists that they don't have to leave Houston to work on interesting problems and continue to build skills at the cutting edge while working for companies all over the world.

IM: What sort of trends are you seeing in venture capital? Are these trends happening in Houston?

We are seeing increasing investments in health AI. Fierce Healthcare reports that health AI topped all other sectors last year with $4B invested into AI startups. Andreesen Horowitz has announced their third and largest biotech and health care fund with $750 million to invest: "Machine learning and artificial intelligence [will] have an outsize impact on how we discover drugs and diagnose disease."

We see similar trends in other areas from industrial software to financial services. The upshot is that the adoption of AI creates significant opportunities for startups and significant challenges for larger companies that are not entrepreneurial and able to build their own data science skill set.

As far as Houston goes, the same trends are there but we tend to lag the major technology hubs in adoption. Efforts like TMC Innovation, Station, Rice University/The Ion and Houston Exponential are having a big impact on both the number and pace of startups and, increasingly, those have AI as a key part of their technology stack.

IM: We've talked about how MDS flies under the radar — why do you think that is? Do you think that'll change as you grow?

AW: Our initial focus was on the work for our clients and on building our team. We are ready to be noticed. Thank you for helping us tell the story with this article.

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Building Houston

 
 

"There's something magical happening in Houston, and [VCs] want a piece of it." Photo via Getty Images

Houston's seen a growth in startup and venture investment — even amid the pandemic — and a group of Houston innovators sat down for a virtual event to discuss what's lead to this evolution.

The Greater Houston Partnership hosted an installment of its Houston Industry Series focused on Digital Tech on Thursday, September 24. The panel of experts, moderated by Krisha Tracy of Google Cloud, discussed how they've observed the paradigm shift that's occurred in Houston over the past few years — and why.

Missed the discussion? Here are some significant overheard moments from the virtual event.

“I think there really is an interest for venture capital here, both locally and also welcoming it from outside of Houston. … There’s something magical happening in Houston, and [VCs] want a piece of it. I think that magical piece is a renewed interest in collaborating.”

Stephanie Campbell, managing director of Houston Angel Network and co-founder of The Artemis Fund. "I think a lot [of this progress] is due to the GHP, Houston Exponential, and the founding of the HX Venture Fund to bring those venture funds to Houston to say, 'what's happening here?'" Campbell adds, saying that this connectivity and collaboration that's happening in Houston VC is unique.

“I think there’s a misconception around all we do is oil and gas and life science in Houston, but when you think about what VC-backable companies look like, they’re tech, they’re B2B SaaS, they’re highly scalable, and they don’t tend to be capital-intensive types of things we see corporate venture backing.”

Campbell says, adding "the connectivity and the interest in VC is really taking off. It's an exciting time to be in Houston and Texas in general."

“Plug and Play’s ventures team is based in Silicon Valley and one thing they enjoy about meeting Houston-based founders is valuations tend to be more reasonable than in the Bay Area."

Payal Patel, director of Plug and Play Tech Center in Houston. "There are gems to be found," she adds.

“I don’t know what it is — if it’s something in the water or just Texans being very friendly, but the investors here share deal flow. It takes a village, and I think we all understand a rising tide lifts all boats."

Patel says on the collaborative nature of Houston. "It's really magical."

“What you’re witnessing is a city that has been waiting for industrial innovation to reach the point where it can be adopted at a really high scale, and that happened around 2017.”

Jon Nordby, managing director at MassChallenge Texas in Houston. Nordby adds that MassChallenge in Houston hasn't been keen on consumer tech, or the "grilled cheese delivery apps," as he describes. "We like companies that are in love with problems, not so much in love with solutions. … We build really meaningful tech."

“Over the last year or two, we’ve seen that sleeping giant get awoken. Open and external innovation is newly adopted by more legacy industries where it wasn’t before — and that’s just created a mountain of opportunities for startups and investors alike.”

Nordby says on the shift toward this meaningful, problem-solving technology, which Houston is full of, as he observes.

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