funding fumble

Houston sees underwhelming venture capital funds in Q3 2019, following larger Texas trend

Texas venture capital deals had a slow quarter, according to Crunchbase data. Getty Images

The entire state of Texas saw an unimpressive third quarter of venture deals — especially compared to the second quarter's reports — and Houston was not immune.

The state reported $372.4 million fundraised by tech startups in Q3 of 2019, according to Crunchbase data, which is less than half of what was reported in Q3 of 2018 ($776.8 million) and what the state raked in the second quarter of this year ($830.6 million).

Houston brought in a measly $38.4 million last quarter, per Crunchbase, and compared to the $251 million raised by Houston companies in Q2, that drop stings. It's the lowest quarterly venture amount Houston's seen in over a year, and lower than Houston's $44.7 million reported for Q1. Zooming out a little, the city's venture reports remain a rollercoaster of sorts with strong quarters bookended by lousy ones.

Chart via InnovationMap using Crunchbase data.

Austin maintained its top spot on the Texas venture leader board with $236.4 million of Texas' total $372.4 million raised in Q3 2019, according to Crunchbase, but that's about $200 million less than the city raised in Q2. Meanwhile, Dallas — a city Houston usually competes with for the No. 2 spot — raised $70.3 million compared to its $126.7 million raised in Q2. The only region up in raises is categorized as "other Texas metros," which went from $7.3 million to $27.4 million between Q2 and Q3.

According to Crunchbase, the city's $38.4 million was raised in six deals between June and September 2019. The top deal of those six companies was raised by Axiom Space, which closed a $16 million in a seed round.

Crunchbase's Texas reporter, Mary Ann Azevedo, reminds readers that their proprietary data is subject to reporting delays.

"Actual deal counts and dollar volume totals are higher than what Crunchbase currently has on record, and the numbers we're reporting today are likely to change as more data gets added to Crunchbase over time," she writes.

Just like Crunchbase, InnovationMap doesn't get to report on every single venture deal. However, here are some of the raises we covered in the third quarter of this year.

  • Spruce, a service provider for apartment residents, raised a $3 million round in July. The company moved its headquarters to Austin around the same time. Read more.
  • Grab, a mobile software company that's designed an airport mobile ordering app, closed a multimillion-dollar series A this summer. Read more.
  • Fannin Partners LLC, an early-stage life science commercialization company, closed a $5.25 million round this summer. Read more.
  • Voyager, a bulk shipping software company, raised $1.5 million in seed funding in August. Read more.
  • Cemvita Factory, which created a way to mimic photosynthesis, raised an undisclosed amount from corporate partners in August and September. Read more.
  • Galen Data, which uses its cloud-based software to connect medical devices, closed a $1 million seed round in September. Read more.
  • Syzygy Plasmonics, a hydrogen fuel cell creator, closed a $5.8 million Series A round in September. Read more.
  • sEATz, an app that allows in-seat ordering, closed a $1.3 million seed round in September. Read more.
  • Sourcewater Inc., which specializes in oilfield water intelligence, closed its series A round at $7.2 million in September. Read more.
  • Topl, a blockchain developer, raised over $700,000 in its seed round in September. Read more.

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Building Houston

 
 

Jani Tuomi, co-founder of imaware, joins the Houston Innovators Podcast to discuss his company's, early disease screening, COVID-19 testing, and more. Photo courtesy of imaware

A family illness got Jani Tuomi thinking — why does treatment of chronic conditions seem like too little, too late? When his brother fell ill, he wondered if more could have been done preemptively.

"The doctors were really good at treating him — but the question I had was why couldn't we have screened for this in advance," Tuomi says on this week's episode if the Houston Innovators Podcast.

He entertained his intuition and started researching, which transitioned into co-founding imaware, a digital health platform that focuses on early identification of chronic conditions — such as diabetes, heart disease, autoimmune issues. What Tuomi and his team found was that these chronic diseases come with biomarkers you can measure before you see symptoms.

Now, imaware exists to provide at-home blood tests for everything from heart health and allergies to thyroid and arthritis screening. And, as COVID-19 was emerging as an international threat across January and February, Tuomi says his team quickly jumped on a way to provide at-home coronavirus testing.

"Right away there was an amazing reception," Tuomi says, adding that big companies were looking to provide their employees on-site training. "There was way more need for testing than supply was available."

Imaware formed strategic partnerships with other Texas companies, including Austin-based startup Wheel — the telemedicine partner. Basically, users take a quick assessment online and if they are high risk, a health care worker is deployed to the patient's site to conduct the test. Once finished, the lab analyzes the sample and telemedicine professionals reach out with results and next steps.

Business for imaware has been booming, and Tuomi has had to scale his business virtually amid the pandemic. Imaware also has an office in Austin, which is focused on the digital side of business.

Looking forward, Tuomi says he's planning on zooming in on the various ways patients were affected by COVID-19, and this summer imaware formed a partnership with Texas A&M University researchers to begin that investigation. Tuomi says he doesn't expect the finalized data until early next year, but what he says the research seems to show is people reacted differently to the disease, and those reactions seem to relate to underlying or chronic conditions — the same conditions imaware has developed early testing for.

"Before COVID, imaware's mission was to identify individuals with chronic conditions earlier, so we're going to double down on our tests," Tuomi says.

Tuomi shares more about the lessons learned from turning around the COVID test so quickly, as well as some of the ways the pandemic has affected the health care industry as a whole. Listen to the full interview below — or wherever you stream your podcasts — and subscribe for weekly episodes.


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