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Houston named one of the fastest growing metros for tech startups

Houston has seen an almost 150 percent increase of tech startups over the past decade. Nick Bee/Pexels

Houston has seen an influx of new startups entering the market — and that growth hasn't gone unnoticed.

A new study from New York-based Center for an Urban Future analyzed Crunchbase data to find 17 cities have have had the most percentage of growth in startup activity. While Houston ranked last on the list, the city's numbers speak for themselves.

In 2008, Crunchbase's data reflects that Houston only had 567 startups, and, by 2018, that figure had increased to 1,409, representing a 149 percent growth. It's worth noting that Crunchbase's data tracks tech startups in particular through various avenues of public and private reporting.

The study included a few other Texas cities that outranked Houston, including Dallas (223 percent growth), Austin (with 221 percent growth), and San Antonio (with 155 percent growth). While the percentage is larger, Dallas' number of startups —according to Crunchbase — is slightly lower than Houston's at 1,293.

Chart via the Center for an Urban Future

While indicative of Houston's growth, the study unintentionally omits non-tech startups or companies that haven't been entered into the Crunchbase system. The study also seems to recognize only Houston data, rather than the greater Houston area as a whole.

Meanwhile, the Greater Houston Partnership's data reflects that the greater Houston area added 11,700 firms between 2013 to 2018 — an average addition of 2,340 per year.

Last month, WalletHub found that Houston was the 13th best city to start a business. The study analyzed 19 key metrics — such as five-year business-survival rate and office-space affordability — to compare 100 cities in the U.S.

More recently, Houston grabbed the fifth spot on a new 2019-20 list of the 10 North American Cities of the Future produced by the fDi Intelligence division of the Financial Times. The ranking is based on data in five categories: Economic potential, business friendliness, human capital and lifestyle, cost effectiveness, and connectivity.

To Susan Davenport, senior vice president of economic development at the Greater Houston Partnership, the results of the study make a lot of sense. Houston's diversity and friendly business climate are prime.

"Houston's future is a bright one," Davenport says in a previous InnovationMap article. "Our young and well-educated workforce, coupled with targeted infrastructure investments, will help us become a hub for innovation in the years ahead."

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Building Houston

 
 

Seven startups walked away with cash prizes from this year's MassChallenge accelerator program in Houston. Photo via Getty Images

MassChallenge named its winners of its 2020 accelerator at a virtual event on October 22. The program awarded a total of $200,000 in equity-free prizes across seven startups from its second Houston cohort.

This year's program took place completely virtually due to the pandemic. Already, the 56 startups involved in the cohort have raised $44.4 million funding, generated $24 million in revenue, and created 297 jobs, says Jon Nordby, managing director of MassChallenge Texas in Houston, in a news release.

"This has been a year full of change, to say the least," he says. "But startups thrive in uncertain times — because they can move fast and remain agile, they are able quickly meet each new need that arises. I'm extremely proud of the startups in our 2020 cohort — during the course of the program, they've pivoted, adjusted, and evolved in order to grow their businesses."

The startups that won across the Houston cohort included Houston-based PATH EX Inc., which won the $100,000 Diamond Award, is focused on the rapid diagnosis and treatment of sepsis through an unique pathogen extraction platform.

Four companies won $25,000 Gold Awards:

  • Healium, based in Columbia, Missouri, is an extended reality device created for self-management of anxiety.
  • Ozark Integrated Circuits Inc., based in Fayetteville, Arkansas, specializes in problem solving using technology and software in the harshest environments – from jet engines to earth orbit.
  • PREEMIEr Diagnostics, based in Southfield, Michigan, created a way to identify which premature infants need an adjustment to their glucose levels to prevent them from losing vision.
  • Scout Inc., based in Alexandria, Virginia, is developing the first commercial in-space satellite inspection service.

Two companies won the Sidecar Awards, securing each a $25,000 Innospark Artificial Intelligence Prize.

  • Articulate Labs, based in Dallas, makes mobile, adaptive devices to help knee osteoarthritis and knee replacement patients rehabilitate on the go during everyday activity.
  • Houston-based Starling Medical has tapped into tech to optimize urinary catheter for patients with neurogenic bladder dysfunction.
The Houston Angel Network awarded Ozark Integrated Circuits their prize of $50,000.
"The progress these entrepreneurs made in just a few months has all of the hope, drama, anticipation, and optimism of seeing dawn break after a particularly difficult night," says Wogbe Ofori, Principal at 360Approach and a MassChallenge mentor, in the release. "It's fulfilling, actually, and makes me proud to be a MassChallenge mentor."
The seven startups were awarded alongside 27 other startups from this year's Austin, Boston, and Rhode Island accelerators at the virtual event. The event was hosted by Chris Denson of Innovation Crush, and featured a fireside chat between Arianna Huffington, founder and CEO of Thrive Global, and Linda Pizzuti Henry, managing director at the Boston Globe.
Earlier this fall, MassChallenge named its 10 startup finalists, whittled down from 56 from 13 countries and 13 states to its first-ever virtual accelerator, which began in June.

"In the face of great uncertainty, MassChallenge Texas in Houston charged forward and did exactly what they ask their startups to do: love the problem," says Houston Mayor Sylvester Turner in the release. "The successful pivot to virtual is a testament to the strength of their global community and the motivation of the Houston ecosystem to get behind new ideas and create businesses that will set roots and grow here.

"As one of the most innovative cities, Houston is a place where startups can thrive – even in the midst of a pandemic. Programs like MassChallenge provide the best practices and networks to ensure startups get the access they need to create sustainable businesses and lasting change."

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