eavesdropping in Houston

Overheard: Experts discuss why Houston is the next hub for tech investing

HX Venture Fund recently hosted a virtual panel on how the tide has turned in Houston when it comes to tech investment. Getty Images

When Joe Alapat, co-founder and CEO of Liongard, was first getting started on his company, he says a few people recommended he go to Austin or one of the coasts to give his software company a better chance.

"For me, the thought process never really entered my mind that Houston was a place where I would be challenged in doing what I do well. My network is here," Alapat shared on a virtual panel hosted by the HX Venture Fund.

Turns out, it was a good decision. Liongard recently closed a $17 million series B round led by Updata Partners, a portfolio fund of HXVF. Moderated by Brian Richards of Accenture's Houston innovation hub, the panel asked Alapat, Sandy Guitar of HXVF, and Carter Griffin of Updata why Houston is the next hub for tech investing. Here are some key moments from the discussion.

“We’re cautious when we go into places — like Austin and Boston — where there’s a lot of activity both on the company side and the investor side. We’d rather find the opportunities where things aren’t as competitive and frothy, and you’re really dealing with people trying to build a real business, serve customers, and build value in the right way, and not just catch lightning in a bottle and build the next unicorn.”

—says Griffin about Updata's strategy of looking at cities like Houston in the middle of the country.

“A lot has changed in the past couple of years — the thought process, the awareness, as well as the willingness for folks to think about Houston as a place where you can build a startup.”

— says Alapat about how Houston's startup ecosystem has evolved since he started Liongard in 2015. He later notes that Houston's innovation leaders have done well to not copy other metros, but listen and learn from the successes and mistakes of other innovation cities.

“There was this feeling that we needed to be uniquely Houston — we couldn’t replicate Silicon Valley or Austin, we needed to be us. But we were going to have to do things differently. We couldn’t keep doing the same things and expecting this [change.]”

— Richard says, noting the corporate mindset, among other aspects of the ecosystem, shifted to be more focused on startups.

“The VCs are very interested in engaging in this model. So, we’re spoiled for choices is one way of saying it.”

— Guitar says on interest from venture funds in HXVF, noting that the VCs see an opportunity for their portfolio startups to connect with HXVF's corporate partners.

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Building Houston

 
 

Insight Surgery is opening its first international location, and the UK company chose Houston for it. Photo via 3dlifeprints.com

An innovative health tech company headquartered in the United Kingdom has made its entrance into the United States — and Houston's Texas Medical Center is where it's setting up shop.

The company, newly renamed to Insight Surgery — neé 3D LifePrints — was originally established in 2011 by Paul Fotheringham as a social enterprise to create 3D printed prosthetics for amputees in Kenya. While the company still provides this care to developing countries, Fotheringham, who serves as CTO, evolved his mission into a business in 2015. The company is gearing up for its next evolution — starting with its first international expansion.

“We’re pivoting away from being a 3D printing company toward a company that personalizes surgery,” Fotheringham tells InnovationMap.

Insight Surgery's focus now is to provide digital planning for surgeons and create personalized medical devices. All the technology the company is working with is FDA approved, but will be customized for patients and surgeons. Previously, this type of customized care could take weeks or months, Fotheringham says, but with Insight Surgery's technology, they can accomplish this in a matter of days.

“We’ve coupled this all together at the point of care by putting people and technology in the hospitals,” Fotheringham explains. “We are changing the norm about (traditional surgery)."

Fotheringham and his team connected with Texas Medical Center Innovation Hub by way of a biobridge — an initiative by TMC to work with international entities to provide an exchange of tech and innovative care. TMC originally launched this UK partnership in 2018 and has expanded it to other countries, including Ireland, Australia, and Denmark.

Insight Surgery is currently building out its 5,000-square-foot space in TMCi that will have a print room for manufacturing. Local operations will be led by David Collins, US engineering lead, who will collaborate with Houston medical professionals at the point of care.

"The US is about 45 percent of the global market for personalized devices, so for us it's part of our expansion — both revenue and investment. We're moving into our fourth round of investment, and the funds will be used for geographic expansion," Fotheringham says. "It's the right time. There's not a lot of competitors."

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