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

 
 

From opioid research to plastics recycling, here are three research projects to watch out for in Houston. Photo via Getty Images

Research, perhaps now more than ever, is crucial to expanding and growing innovation in Houston — and it's happening across the city right under our noses.

In InnovationMap's latest roundup of research projects, we look into studies on robotics advancing stroke patient rehabilitation, the future of opioid-free surgery, and a breakthrough in recycling plastics.

The University of Houston's research on enhancing stroke rehabilitation

A clinical trial from a team at UH found that stroke survivors gained clinically significant arm movement and control by using an external robotic device powered by the patients' own brains. Image via UH.edu

A researcher at the University of Houston has seen positive results on using his robotics on stroke survivors for rehabilitation. Jose Luis Contreras-Vidal, director of UH's Non-Invasive Brain Machine Interface Systems Laboratory, recently published the results of the clinical trial in the journal NeuroImage: Clinical.

The testing proved that most patients retained the benefits for at least two months after the therapy sessions ended, according to a press release from UH, and suggested even more potential in the long term. The study equipped stroke survivors who have limited movement in one arm with a computer program that captures brain activity to determine the subject's intentions and then works with a robotic device affixed to the affected arm, to move in response to those intentions.

"This is a novel way to measure what is going on in the brain in response to therapeutic intervention," says Dr. Gerard Francisco, professor and chair of physical medicine and rehabilitation at McGovern Medical School at The University of Texas Health Science Center at Houston and co-principal investigator, in the release.

"This study suggested that certain types of intervention, in this case using the upper robot, can trigger certain parts of brain to develop the intention to move," he continues. "In the future, this means we can augment existing therapy programs by paying more attention to the importance of engaging certain parts of the brain that can magnify the response to therapy."

The trial was funded by the National Institute of Neurological Disorders and Stroke and Mission Connect, part of the TIRR Foundation. Contreras-Vidal is working on a longer term project with a National Science Foundation grant in order to design a low-cost system that would allow people to continue the treatments at home.

"If we are able to send them home with a device, they can use it for life," he says in the release.

Baylor College of Medicine's work toward opioid-free surgery

A local doctor is focused on opioid-free options. Photo via Getty Images

In light of a national opioid crisis and more and more data demonstrating the negative effects of the drugs, a Baylor College of Medicine orthopedic surgeon has been working to offer opioid-free surgery recovery to his patients.

"Thanks to a number of refinements, we are now able to perform hip and knee replacements, ranging from straightforward to very complex cases, without patients requiring a single opioid pill," says Dr. Mohamad Halawi, associate professor and chief quality officer in the Joseph Barnhart Department of Orthopedic Surgery, in a press release.

"Pain is one of patients' greatest fears when undergoing surgery, understandably so," Halawi continues. "Today, most patients wake up from surgery very comfortable. Gone are the days of trying to catch up with severe pain. It was a vicious cycle with patients paying the price in terms of longer hospitalization, slower recovery and myriad adverse events."

Halawi explains that his work focuses on preventative measures ahead of pain occurring as well as cutting out opioids before surgery.

"Opioid-free surgery is the way of the future, and it has become a standard of care in my practice," he says. "The ability to provide safer and faster recovery to all patients regardless of their surgical complexity is gratifying. I want to make sure that pain is one less thing for patients to worry about during their recovery."

Rice University's breakthrough on recycling plastics

A team of scientists have found a use for a material that comes out of plastics recycling.

Houston scientists has found a new use for an otherwise useless byproduct that comes from recycling plastics. Rice University chemist James Tour has discovered that turbostratic graphene flakes can be produced from pyrolyzed plastic ash, and those flakes can then be added to other substances like films of polyvinyl alcohol that better resist water in packaging and cement paste and concrete, as well as strengthen the material.

"This work enhances the circular economy for plastics," Tour says in a press release. "So much plastic waste is subject to pyrolysis in an effort to convert it back to monomers and oils. The monomers are used in repolymerization to make new plastics, and the oils are used in a variety of other applications. But there is always a remaining 10% to 20% ash that's valueless and is generally sent to landfills.

Tour's research has appeared in the journal Carbon. The co-authors of the study include Rice graduate students Jacob Beckham, Weiyin Chen and Prabhas Hundi and postdoctoral researcher Duy Xuan Luong, and Shivaranjan Raghuraman and Rouzbeh Shahsavari of C-Crete Technologies. The National Science Foundation, the Air Force Office of Scientific Research and the Department of Energy supported the research.

"Recyclers do not turn large profits due to cheap oil prices, so only about 15% of all plastic gets recycled," said Rice graduate student Kevin Wyss, lead author of the study. "I wanted to combat both of these problems."

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