Money moves

Houston sees significant jump in annual venture capital investments, according to new data

The city of Houston still lags behind Dallas and Austin when it comes to venture capital funds raised but did outshine compared to its 2018 numbers. Getty Images

While Houston fell behind Austin and Dallas when it came to amount of venture capital raised last year, the Bayou City still closed out 2018 with more funds raised than it reported in 2017, according to Crunchbase data.

Houston had a reported $372.8 million in investments in 77 known deals across 2018. In 2017, Houston had 95 deals reported but with a smaller total of funding dollars — $257.7 million — which gives Houston a 45 percent increase year over year.

Compared to other Texas metros, Houston still lags behind. Austin reported $1,285.5 million and Dallas companies had $601.8 million. These figures reflect only the reported deals to Crunchbase.

Photo via news.crunchbase.com

Even though 2018 overall shows Austin had a huge lead, in the third quarter of last year, Houston reported a similar amount of VC funds as Austin. In Q3, Houston startups pulled in $138.8 million — 39.2 percent of the state's entire VC funding — while Austin startups reported receiving $150.6 million — 42.6 percent of the funds, according to Crunchbase.

The fourth quarter was a slightly different story. Houston still edged out Dallas, but Austin took a significant lead. Houston had a reported $121.4 million from 11 reported VC deals, compared to Dallas' $101 million and Austin's $299.9 million. For Houston, the largest 2018 deal took place in Q4. Apex International, and oil and gas company, raised $75 million.

Austin-based Capital Factory's co-founder, Joshua Baer, tells Crunchbase that it will take some time for Houston's VC economy to catch up to Austin's, but that he doesn't think there's any reason it couldn't happen. Capital Factory, which has contributed to some Houston startups, recently announced it has preleased space in Houston-based The Cannon's new 120,000-square-foot space that's expected to deliver in spring.

Baer tells Crunchbase that Houston's biggest problem is access to venture capital — something that isn't rare of a problem at all. But Houston has a unique opportunity too.

"What Houston has that most places don't is a lot of corporate VCs," Baer says to Crunchbase. "Almost every energy company headquartered in Houston has a venture arm. They tend to fund companies that are Series B and later… so not the seed-stage stuff that is so popular in Austin and they do it all over the world, not just in Houston."

Five different Houston startups closed out 2018 with some funds. Here's how they plan to spend their investments.

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Building Houston

 
 

Catch up on two big pieces of news landing at the Houston Spaceport. Image via fly2houston.com

The Space City is starting 2022 off strong with news launching out of the Houston Spaceport — a TK-acre space in TK Houston.

The two big headlines include a unicorn company releasing the latest details of its earthbound project and fresh funds from the state to support the space ecosystem in Texas.

Governor Abbott doles out $10M in spaceport grants

Texas has launched fresh funding into two spaceport projects. Image via fly2houston.com

Last week, Gov. Greg Abbott announced $10 million in funding to two Texas spaceports as a part of the state's Spaceport Trust Fund. The Houston Spaceport Development Corp. received $5 million and the Cameron County Spaceport Development Corp. received $5 million.

The fund is administered by the Governor's Office of Economic Development and Tourism and was created to support the development of spaceport infrastructure, create quality jobs, and attract continuing investments that will strengthen the economic future of the state, according to a news release.

"For decades, Texas has been a trailblazer in space technology and we are proud to help cultivate more innovation and development in this growing industry in Cameron and Harris County," says Abbott in the release. "This investment in the Cameron County and Houston Spaceport Development Corporations will create even more economic opportunities for Texans across the state and continue our legacy as a leader in space technology."

Axiom Space hires Dallas-based architecture and engineering firm

Axiom Space has made progress on developing its 14-acre headquarters. Image via axiomspace.com

Houston-based unicorn Axiom Space has announced that it awarded Dallas-based Jacobs the architecture and engineering phase one design contract. The firm will be working on the 100,000-square-foot facility planned for the 400-acre Houston Spaceport at Ellington Airport.

Axiom Space's plans are ro build the first commercial space station that will provide a central hub for research, to support microgravity experiments, manufacturing, and commerce in low Earth orbit missions, according to a news release.

"This is an exciting and historic moment for Axiom and the greater Houston area," says Axiom CTO Matt Ondler in the release. "For the first time, spacecraft will be built and outfitted right here in Houston, Texas. This facility will provide us with the infrastructure necessary to scale up operations and bring more aerospace jobs to the area. With this new facility, we are not only building next generation spacecraft, but also solidifying Houston as the U.S. commercial industry's gateway to space."

Axiom Space, which raised $130M in venture capital last year, is building out its 14-acre headquarters to accommodate the creation of more than 1,000 high-paying jobs, from engineers to scientists, mathematicians, and machinists.

"Houston is a city built on innovation and is becoming a next-generation tech hub in the United States," says Ron Williams, senior vice president at Jacobs. "Privately funded infrastructure will drive U.S. leadership in space. Jacobs is committed to providing integrated solutions to accelerate the future of commercial space operations."

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