following the money

New report shows what industries in Houston are attracting the most venture capital investment

According to a new report, Houston's energy and health care industries are attracting the most VC investment — with cleantech and oncology investments specifically on the rise. Graphic via the Houston Tech Report by the GHP

According to a recently released report, a few key industries in Houston have attracted the bulk of the city's venture capital investment dollars.

The Houston Tech Report by the Greater Houston Partnership and Houston Exponential has revealed that the city is home to 8,800 tech-related firms, including over 700 venture-backed startups that have attracted over $2.6 billion in VC funding over the past five years. Annual VC investment has tripled in that same timeframe — from $284 million in 2016 to $753 million in 2020.

"Houston is a city that has been leading the way for decades, with breakthrough innovations that have truly changed the world," says Bob Harvey, president and CEO of the Greater Houston Partnership, in a news release. "Over the past few years, we have been working to transform an already incredible economy into one that competes as a leading digital tech city."

Zooming into the industries attracting the most capital in Houston, life sciences and oil and gas technology continue to reign supreme. Of the VC dollars going into Houston companies, 17 percent goes into life science companies and 17 percent goes into oil and gas, according to the report. Cleantech and Oncology are both niches in Houston that have seen growth in VC investment.

Graphic via the Houston Tech Report by the GHP

Software as a service has seen significant growth since 2011, and represents the third-most invested in industry with 14 percent of the VC investment.

Contributing to the innovation ecosystem's growth is an increase in startup development organizations — the city now has added over 30 SDOs including non-profits, incubators/accelerators, coworking spaces and makerspaces since 2017 — and access to tech talent. According to the report, Houston has the 12th largest tech sector in the U.S. with 235,000 tech workers, and this sector generates $28.1 billion to the region's GDP.

"Houston in 2020 had not one but two unicorns (private tech companies exceeding a $1 billion valuation), our first ever," says Harvin Moore, president of HX. "That's a reflection of both the rate of growth and early stage of our ecosystem. We will see an increasing number of startups as these companies continue to grow and others follow."

Graphic via the Houston Tech Report by the GHP

According to the report, the most active investors into Houston-based companies between 2017 and 2020 include Austin-based Capital Factory with 29 deals, Houston-based TMC Innovation with 25 deals, and Houston Angel Network with 23 deals.

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Building Houston

 
 

This week's roundup of Houston innovators includes entrepreneur and author Jay Steinfeld, Clemmie Pierce Martin of Houston Exponential, and Matthew Costello of Voyager Portal. Courtesy photos

Editor's note: In this week's roundup of Houston innovators to know, I'm introducing you to three local innovators across industries — from startup development to software — recently making headlines in Houston innovation.

Jay Steinfeld, author of Lead From The Core

Blinds.com founder Jay Steinfeld has released his new book last week. Photos courtesy of Jay Steinfeld

After Blinds.com successfully exited to Home Depot, founder Jay Steinfeld started thinking about what he wanted to do next. The entrepreneur is now on the boards of five companies and has taught at Rice University before publishing his new book, "Lead From The Core."

"The book was originally written so that the people at Blinds.com would know what got us to where we were and would use it as the foundation for continuing what that success was all about. As I began teaching and expanding my influence throughout the community nationally, I realized that there were many entrepreneurs who could learn from the same success, the techniques, the strategies," Steinfeld says. Click here to read the full interview.

Clemmie Pierce Martin, director of marketing and strategy at Houston Exponential

Clemmie Pierce Martin will oversee marketing and strategy for Houston Exponential. Photo via LinkedIn

Houston Exponential has made another new hire. Clemmie Pierce Martin has joined Houston Exponential as director of marketing and strategy. The nonprofit helps spur the growth of Houston’s innovation ecosystem.

She most recently was director of strategic partnerships and products at Houston-based startup Goodfair, which operates an online thrift store. Before that, she was head of client success at Austin-based startup Mesa Cloud, which offers a platform for tracking student progress.

Martin, who grew up in Houston and graduated from the University of Texas at Austin and Houston’s The Kinkaid School, says her new employer “sees the potential in Houston and our startup ecosystem that I’ve always felt was underserved and underrepresented nationally. I couldn’t be more excited to join a team that is working tirelessly to make sure that for founders and startups anywhere in the world, Houston is not just a choice but rather the clear choice of venue.” Click here to read more.

Matthew Costello, CEO and co-founder of Voyager Portal

Matthew Costello Voyager

Matthew Costello is the\u00a0CEO and co-founder of Voyager Portal. Photo courtesy of Voyager

Voyager Portal, a software-as-a-service platform, closed an $8.4 million series A investment round this week. The round was led by Phaze Ventures, a VC fund based in the Middle East, and included new investors — ScOp Venture Capital, Waybury Capital and Flexport. Additionally, all of Voyager's existing investors contributed to this round.

“Voyager Portal was created to significantly reduce cost, risk, and complexity when transporting bulk materials around the world,” says Matthew Costello, CEO and co-founder of Voyager, in the release. “The last two years have demonstrated just how critical shipping bulk commodities is to global markets – freight rates have increased and port congestion is at an all-time high – accelerating the demand for Voyager’s solution.” Click here to read more.

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