By the numbers

4 things you need to know from the Greater Houston Partnership's annual report as it pertains to innovation

The Greater Houston Partnership has the facts. Nick Bee/Pexels

Every year, the Greater Houston Partnership — the city's economic development arm — gathers up data and reports to paint a full picture of the Bayou City. In the past few editions, innovation has been a key component.

The GHP's innovation coverage spans three pages under the top industry and sectors category. From tech startup growth to money raised, here's what you need to know from the 2019 Houston Facts.

Houston has the 12th largest tech sector in the United States

Christina Morillo/Pexels

The innovation section starts pretty strong with this fun fact. The No. 12 tech sector ranking comes from Computing Technology Industry Association, which cites that Houston has more than 223,000 tech workers. According to the report, about two-thirds of Houston's tech workers are in industries outside of computer and software.

GHP credits Houston's large population of tech workers to its connection to aerospace and oil and gas.

"As the home of NASA's Johnson Space Center and headquarters to the global energy industry, Houston has long been a global hub of engineering talent," the report reads. "In recent years, those skills have given rise to a thriving ecosystem of digital technology companies."

GHP's data reflect that Houston has more than 8,200 tech-related firms, which includes over 500 tech startups.

Venture funding was up over 50 percent between 2017 and 2018

Via Houston Facts


Houston's recorded venture funding doesn't have a hockey stick chart to brag about. Over the past few years, venture funding has been up and down, according to S&P Capital IQ.

"Houston companies in clean energy, health innovation and digital technology have received $3.1 billion in venture capital and growth funding across 333 deals since 2014, averaging $576 million every year," the report reads.

But between 2018 and 2017, VC funds were up 50.9 percent. Of the three categories, clean energy technology pulled in the most money each year and was responsible for 64 percent of the funding during the 2014-2018 period. Sunnova, a residential solar company, had the most money raised during this time with $1.3 billion.

The largest deals reported in Houston in 2018 were:

  • Sunnova Energy — $183 million
  • OncoResponse — $40 million
  • Trisun Energy Services — $39 million
  • Arundo Analytics — $25 million
  • Procyrion — $16 million
  • QuVa Pharma — $15 million
  • NeoSensory — $12 million

University-backed entrepreneurship remains strong

Courtesy of Rice University

The Princeton Review ranks Rice University and the University of Houston as having among the best entrepreneurship programs in the country. Rice runs its Rice Alliance for Technology and Entrepreneurship out of its Jones Graduate School of Business, while University of Houston's Cyvia and Melvyn Wolff Center for Entrepreneurship is housed in the Bauer College of Business.

Both schools have run accelerator programs for seven years — the past six of which have been in collaboration. Rice's OwlSpark and UH's RED Labs finished this summer's program on August 1 at the Bayou Startup Showcase with 16 startup pitches.

Meanwhile, the Rice Business Plan Competition is deemed the "richest pitch competition" in the country. In 2019, the competition saw $3 million invested. RBPC companies have gone on to raise $1.2 billion in capital during the competition's 18-year history.

At UH, which has its own set of pitch events, the Wolff Center's graduate students manage a million-dollar Cougar Venture Fund. The fund has a group of experts that analyze and invest in early stage technology companies.

The life science industry continues to grow

Via Houston Facts

In 2018, Houston housed 20.5 percent of the country's clinical trials, with over 1,800 active. The city has more than 1,760 life sciences companies and over 25,100 biotech experts and 7,200 medical researchers.

Thankfully, the money seems to match this volume of activity. Last year, Houston's medical research grant funding from the National Institutes of Health, which totaled $668 million in 2018, was up almost 7 percent from 2017. The city's medical institutions have received nearly $3 billion from NIH since 2014 — an average of $600 million a year.

According to the GHP, the top Houston institutions receiving NIH funding in 2018 were:

  • Baylor College of Medicine — $255 million
  • University of Texas MD Anderson Cancer Center — $149 million
  • University of Texas Health Science Center — $90 million
  • University of Texas Medical Branch Galveston — $87 million
  • University of Houston — $24 million
  • Methodist Hospital Research Institute — $19 million
  • Rice University — $14 million
  • Texas Southern University — $3 million

As mentioned before, venture capital and private equity investment has increased in Houston, and that trend is also represented in the life science sector. In 2018, life science startups raked in $119 million, which represents a a 41.7 percent increase from $84 million in 201717, according to S&P Capital IQ.

In 2018, the top biotech firms receiving investment were:

  • OncoResponse — $40 million
  • Procyrion — $16 million
  • QuVa Pharma — $15 million
  • Pulmotect — $10 million
  • Tvardi Therapeutics — $9 million

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Building Houston

 
 

This health tech company has made some significant changes in order to keep up with its growth. Photo via Getty Images

With a new CEO and chief operating officer aboard, Houston-based DataJoint is thinking small in order to go big.

Looking ahead to 2022, DataJoint aims to enable hundreds of smaller projects rather than a handful of mega-projects, CEO Dimitri Yatsenko says. DataJoint develops data management software that empowers collaboration in the neuroscience and artificial intelligence sectors.

"Our strategy is to take the lessons that we have learned over the past four years working with major projects with multi-institutional consortia," Yatsenko says, "and translate them into a platform that thousands of labs can use efficiently to accelerate their research and make it more open and rigorous."

Ahead of that shift, the startup has undergone some significant changes, including two moves in the C-suite.

Yatsenko became CEO in February after stints as vice president of R&D and as president. He co-founded the company as Vathes LLC in 2016. Yatsenko succeeded co-founder Edgar Walker, who had been CEO since May 2020 and was vice president of engineering before that.

In tandem with Yatsenko's ascent to CEO, the company brought aboard Jason Kirkpatrick as COO. Kirkpatrick previously was chief financial officer of Houston-based Darcy Partners, an energy industry advisory firm; chief operating officer and chief financial officer of Houston-based Solid Systems CAD Services (SSCS), an IT services company; and senior vice president of finance and general manager of operations at Houston-based SmartVault Corp., a cloud-based document management company.

"Most of our team are scientists and engineers. Recruiting an experienced business leader was a timely step for us, and Jason's vast leadership experience in the software industry and recurring revenue models added a new dimension to our team," Yatsenko says.

Other recent changes include:

  • Converting from an LLC structure to a C corporation structure to enable founders, employees, and future investors to be granted shares of the company's stock.
  • Shortening the business' name to DataJoint from DataJoint Neuro and recently launching its rebranded website.
  • Moving the company's office from the Texas Medical Center Innovation Institute (TMCx) to the Galleria area. The new space will make room for more employees. Yatsenko says the 12-employee startup plans to increase its headcount to 15 to 20 by the end of this year.

Over the past five years, the company's customer base has expanded to include neuroscience institutions such as Princeton University's Princeton Neuroscience Institute and Columbia University's Zuckerman Institute for Brain Science, as well as University College London and the Norwegian University of Science and Technology. DataJoint's growth has been fueled in large part by grants from the U.S. Defense Advanced Research Projects Agency (DARPA) and the Brain Research Through Advancing Innovative Neurotechnologies (BRAIN) Initiative at the National Institutes of Health (NIH).

"The work we are tackling has our team truly excited about the future, particularly the capabilities being offered to the neuroscience community to understand how the brain forms perceptions and generates behavior," Yatsenko says.

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