startup support

Unique Houston-based venture studio looks to double portfolio in 2021

Cloudbreak Enterprises is getting in on the ground level with software startups — quickly helping them take an idea to market. Photo via Getty Images

Lauren Bahorich is in the business of supporting businesses. In February 2020, she launched Cloudbreak Enterprises — B-to-B SaaS-focused, early-stage venture studio — with plans to onboard, invest in, and support around three new scalable companies a year. And, despite launching right ahead of a global pandemic, that's exactly what she did.

Bahorich, who previously worked at Golden Section Ventures, wanted to branch off on her own to create a venture studio to get in on the ground level of startups — to be a co-founder to entrepreneurs and provide a slew of in-house resources and support from development and sales to marketing and administration.

"We start at zero with just an idea, and we partner with out co-founders to build the idea they have and the domain expertise and the industry connections to take that idea and built a product and a company," Bahorich says.

Bahorich adds that there aren't a lot of venture studios in the United States — especially in Houston. While people might be more familiar with the incubator or accelerator-style of support for startups, the venture studio set up is much more intimate.

"We truly see ourselves as co-founders, so our deals are structured with co-founder equity," Bahorich says, explaining that Cloudbreak is closer to a zero-stage venture capital fund than to any incubator. "We are equally as incentivized as our co-founders to de-risk this riskiest stage of startups because we are so heavily invested and involved with our companies."

Lauren Bahorich founded Cloudbreak Enterprises in February of 2020. Photo courtesy of Cloudbreak

Cloudbreak now has three portfolio companies, and is looking to onboard another three more throughout the rest of the year. Bahorich runs a team of 15 professionals, all focused on supporting the portfolio. While creating the studio amid the chaos of 2020 wasn't the plan, there were some silver linings including being able to start with part-time developers and transition them to full-time employees as the companies grew.

"Within the first month, we were in shutdown here in Houston," Bahorich says. "But it's been a great opportunity for us. Where a lot of companies were pivoting and reassessing, we were actually able to grow because we were just starting at zero ourselves."

Cloudbreak's inaugural companies are in various stages and industries, but the first company to be onboarded a year ago — Relay Construction Solutions, a bid leveling software for the construction industry — joined the venture studio as just an idea and is already close to first revenue and potentially new investors. Cloudbreak is also creating a commercial real estate data management software and an offshore logistics platform. All three fall into a SaaS sweet spot that Bahorich hopes to continue to grow.

"We are looking to replace legacy workflows that are still performed in Excel or by email or phone," Bahorich says. "It's amazing how many opportunities there are that fit into that bucket — these high-dollar, error-prone workflows that are still done like it's 1985."

Given the hands-on support, Bahorich assumed she'd attract mostly first-time entrepreneurs who don't have experience with all the steps needed to launch the business. However, she says she's gotten interest from serial entrepreneurs who recognized how valuable the in-house support can be for expediting the early-stage startup process.

"What I'm realizing is a selling point is our in-house expertise. These founders are looking for technical co-founders," Bahorich says. "We can both provide that role and be capital partners."

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Building Houston

 
 

Irving-based ExxonMobil has announced the Houston Ship Channel will be the site of an "innovation zone" for carbon capture and storage. Photo via Business Wire

In a move that would be a gamechanger for Houston, oil and gas giant ExxonMobil envisions creating a $100 billion carbon-capture hub along the Houston Ship Channel.

ExxonMobil foresees the Houston Ship Channel being the site of an "innovation zone" for carbon capture and storage. In a blog post on the ExxonMobil website, Joe Blommaert, the Houston-based president of ExxonMobil Low Carbon Solutions, says Houston would be "the perfect place" for the project because:

  • The ship channel is home to dozens of refineries and petrochemical plants.
  • The geological formations in the Gulf of Mexico could "safely, securely, and permanently" store tons of carbon emissions under the sea floor, according to the blog post. The U.S. Department of Energy estimates the storage capacity along the U.S. Gulf Coast could handle 500 million metric tons of CO2.

Irving-based ExxonMobil, which employs more than 12,000 people in the Houston area, says the project could capture and store about 50 million metric tons of CO2 annually by 2030. By 2040, that number could rise to 100 million metric tons.

"We could create an economy of scale where we can reduce the cost of the carbon dioxide mitigation, create jobs, and reduce the emissions," Blommaert tells the Reuters news service.

In a news release, Houston Mayor Sylvester Turner applauds the ExxonMobil plan.

"This proposal by ExxonMobil is the type of bold ambition and investment we will need to meet our climate goals and protect our communities from climate change," Turner says. "ExxonMobil's proposal represents a significant step forward for the energy industry, and I hope it brings more companies to the table to help Houston lead a global energy transition."

Turner notes that the Houston area is home to some of the largest emitters of carbon in the U.S., adding that everyone has "a responsibility and role to play in decarbonization."

Blommaert says the project would require public and private funding, along with "enhanced regulatory and legal frameworks that enable investment and innovation." According to Politico, ExxonMobil wants the federal government to kick in tax breaks or to set carbon-pricing policies to help get the project off the ground.

Politico reports that the Biden administration isn't considering ExxonMobil's idea as it prepares a climate-change package.

"Meanwhile, environmental groups and many Democrats have slammed carbon-capture proposals as a climate strategy, saying the only way to permanently reduce greenhouse gas pollution is a wholesale switch away from fossil fuels," Politico says.

Meanwhile, the International Energy Agency maintains that carbon capture and storage "are critical for putting energy systems around the world on a sustainable path." Achieving net-zero goals "will be virtually impossible" without carbon capture and storage, the group says.

ExxonMobil announced creation of its Low Carbon Solutions business unit in February as part of its push to invest $3 billion in lower-emission energy initiatives through 2025. Low Carbon Solutions initially will focus on technology for carbon capture and storage. The business unit is exploring opportunities along the Gulf Coast, as well as in Wyoming, Belgium, the Netherlands, Qatar, Scotland, and Singapore.

Last year, ExxonMobil hit the pause button on a $260 million carbon-capture project in Wyoming due to fallout from the COVID-19 pandemic, according to the Bloomberg news service.

In a December report, the Global CCS Institute, a think tank, said 65 commercial carbon-capture projects were in various stages of development around the world.

"Climate ambition, including efforts to decarbonize industry, has not been curtailed despite the adversities faced in 2020," Brad Page, CEO of the institute, says in a news release about the report. "We're continuing to see an upward trajectory in the amount of CO2 capture and storage infrastructure that is being developed. One of the largest factors driving this growth is recognition that achieving net-zero emissions is urgent yet unattainable without CO2 reductions from energy-intensive sectors."

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