Houston PE firm scores $725M to launch new business unit to invest in decarbonization

seeing green

HF Capital, the Knoxville, Tennessee-based investment arm of the Haslam family, made the multimillion-dollar commitment to set up Ara Energy Decarbonization. Photo via Getty Images

Houston-based Ara Partners, a private equity firm that focuses on industrial decarbonization investments, is receiving up to $725 million from a Tennessee-based family office to launch an energy decarbonization unit.

HF Capital, the Knoxville, Tennessee-based investment arm of the Haslam family, made the multimillion-dollar commitment to set up Ara Energy Decarbonization. The new business will work toward reducing carbon emissions at ethanol plants, natural gas power plants, and other traditional energy assets.

The Haslam family founded Pilot Co., North America’s largest transportation fuel business and chain of travel centers. Shameek Konar, former CEO of Pilot, has been tapped to lead Ara Energy Decarbonization.

“It is an uncomfortable truth that highly pollutive energy sources are going to play an essential role in delivering an energy transition over the next several decades,” Charles Cherington, co-founder and managing partner of Ara, says in a news release. “We can ignore these staggering carbon emissions, or we can apply our proven methods and financing expertise to decarbonize the conventional energy value chain.”

The energy sector accounts for more than 75 percent of global greenhouse gas emissions.

“The world’s energy demands are increasing and complex, and renewable power needs time and support for it to fulfill rising global energy demand. Ara’s … skillset, portfolio network, and decarbonization management knowledge [are] perfectly positioned to attack the carbon-intensive energy sector,” Konar says.

Ara Partners closed its third private equity fund in December 2023 with over $2.8 billion in new commitments. As of June 30, 2024, Ara Partners had about $6.3 billion of assets under management.

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This article originally ran on EnergyCapital.

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Utility Global’s technology enables reduction of greenhouse gas emissions along with generation of low-carbon fuels and chemicals. Photo courtesy of Utility Global

Houston clean energy company secures $53M series C investment

big raise

Houston-based Utility Global, a maker of decarbonization-focused gas production technology, has raised $53 million in an ongoing series C round.

Among the participants in the round are Canada’s Ontario Power Generation Pension Plan, the XCarb Innovation Fund operated by Luxembourg-based steel company ArcelorMittal, Houston-based investment firm Ara Partners, and Saudi Aramco’s investment arm.

Also, Utility Global and ArcelorMittal have agreed to develop at least one decarbonization facility at an ArcelorMittal steel plant.

The latest infusion of cash will support the rollout of Utility Global’s eXERO technology, including establishment of the company’s first commercial facilities in 2026.

“With the successful completion of its demonstration program at a commercial steel facility resulting in the first hydrogen ever produced from blast furnace off-gasses in a single reactor, the company has shifted to commercial deployments,” Utility Global says in a news release.

Utility Global’s technology enables reduction of greenhouse gas emissions along with generation of low-carbon fuels and chemicals.

“Our eXERO solution is the first of its kind to convert process gasses into clean hydrogen in a single reactor, onsite, in a cost-effective manner that extends the life of existing customer assets and processes while providing significant emissions reductions,” says Claus Nussgruber, CEO of Utility Global.

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This article originally ran on EnergyCapital.

Ara Partners announced this week that it has acquired a majority interest in Houston-based USD Clean Fuels. Image via Getty Images

PE firm acquires Houston renewables fuels infrastructure company

m&a moves

Fresh off its $3 billion fund closure, a Houston private equity firm has made its latest acquisition.

Ara Partners announced this week that it has acquired a majority interest in Houston-based USD Clean Fuels, a developer of logistics infrastructure for renewable fuels. The terms of the deal were not disclosed.

"We have high conviction that the green molecules economy – whether it's renewable fuel feedstocks or biofuels – offers disproportionate opportunity for returns and impact," George Yong, partner and co-head of Infrastructure at Ara Partners, says in a news release. "The USDCF platform is particularly compelling because it combines a best-in-class management team with a portfolio of premiere terminal logistics projects that provide the ideal foundation for a durable and scalable infrastructure business."

Included in the transaction, USDCF has acquired the West Colton Rail Terminal, a biofuels terminal operating in in California. Ara has reportedly committed additional capital to support USDCF's infrastructure footprint expansion.

"We are excited to join forces with Ara Partners to bring critical infrastructure solutions to the rapidly growing North American renewable fuel market, beginning with the West Colton Rail Terminal," Dan Borgen, CEO of USDCF, says in the release. "We are proud to be backed by an investor that is completely focused on enabling an accelerated and economical path to a low-carbon economy."

Ara Partners, which has around $5.6 billion of assets under management, closed its third fund a few weeks ago to the tune of $3 billion. The firm has offices in Houston, Boston and Dublin, Ireland, and focuses on industrial decarbonization.

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This article originally ran on EnergyCapital.

The Ion has announced the latest companies to move into the hub. Photo courtesy of The Ion

The Ion announces new tenants that have recently moved in, expanded within the hub

moving in

Several organizations — from tech startups to a nonprofit — have moved into the Ion recently to either relocate or expand their presence in Houston.

The Ion District announced new tenants today, bringing the total space leased to 86 percent, according to a news release. The recent additions to the Ion include:

  • Carbon Clean announced its new United States HQ last month. The startup’s technology has captured nearly two million tons of carbon dioxide at almost 50 sites around the world.
  • Cognite is a Norwegian software company for asset-heavy industries that turns industrial data into customer value.
  • OpenStax, a Houston-based nonprofit, is publishing openly licensed college textbooks that are free online and low cost in print.
  • Synopic is a California-based startup that's building next-gen depth-enabled cameras to improve visualization and decision making during medical procedures.
  • Houston-based Motif Neurotech, a medical equipment manufacturing startup, is working to develop minimally invasive electronic solutions for mental health.
  • RedSwan CRE, founded in Houston, is a crowdfunding-style investment platform and marketplace of tokenized commercial real estate.
  • Nauticus Robotics, a marine robotics hardtech and software company, recently went public.
  • Rice University’s Office of Innovation and its Nexus Lab, which is under construction and designed for prototyping and scaling-up technologies, is increasing its presence in the Ion.
  • Also noteworthy is the expanded office of Ara Partners, which first moved into the Ion last year. The Houston-based, global private equity firm is focused on investing in carbon decentralization technology.
  • Dallas-headquartered flexible workspace provider Common Desk announced that it would expand its space by nearly 50 percent at the Ion last December.

“Welcoming this amazing lineup of new tenants, across the breadth of sectors they represent, demonstrates that the Ion is the place to be and do business in Houston,” says Jan E. Odegard, executive director of the Ion, in the news release. “By continuing to fill our space with new innovators across all these different offerings, from all around the globe, we’ve become the home for collisions that will create solutions to the biggest problems facing our world today.

"We pride ourselves on advancing the diverse knowledge, teams, technologies, and products that will propel our world forward. Our inspiring new tenants will do just that,” he continues.

The Ion's grand opening took place just about a year ago, and existing tenants include Chevron, Microsoft, (Schlumberger) SLB Innovation Factori, Houston Methodist. The growing Ion District is home to more than 300 businesses, including corporates, small businesses, startups, and restaurants.

“The Ion continues to see leasing demand from companies that understand the value of a creative and active work environment,” says Bryson Grover, investment manager of real estate development at Rice Management Co. “Companies are choosing Ion District because it offers more than just a solution for space needs. Workers are given the opportunity to experience a sense of community that brings together like-minded individuals and those with different perspectives.”

Here's your latest roundup of Houston startup and innovation news you may have missed. Photo via Getty Images

Houston startup raises $25M, biz plan competition opens apps, and more local innovation news

Short stories

We're on the other side of the hill that is Houston's summer, but the Bayou City's still hot in terms of innovation news, and there might be some headlines you may have missed.

In this roundup of short stories within Houston startups and tech, a Houston venture capital fund has made its latest investment, a hydrogen startup has raised fresh funding, accelerators open apps, and more.

Houston hydrogen startup closes $25M series B

This hydrogen company has fresh funding. Photo via utility.global

Utility Global, a Houston-based sustainable hydrogen company, has closed its series B round of funding to the tune of $25 million, Axios reports.

Houston-based private equity firm Ara Partners led the round. Other participating investors included: Samsung Ventures, NOVA, and Aramco.

Utility Global, founded in 2018, has developed a clean hydrogen solution. The proprietary tech — called the eXERO Technology Platform — includes a zero electricity process that converts sustainable waste streams into high-purity hydrogen. Additionally, the company developed its H2Gen Product Line that delivers customers reliable, low carbon, and high purity hydrogen, which offers unparalleled feedstock flexibility and highly competitive economics.

"Leveraging our industry-first eXERO™ Process, Utility Global is expanding into numerous industrial sectors," reads the company's website. "Whether it's next-gen fueling, green chemicals, or sustainable steel, Utility Global's products can meet your needs. Our ultra-high-purity hydrogen is also ideal for the electronics, food, and glass industries. In the steel industry, our waste-to-hydrogen offering converts waste-gases into pure hydrogen, enabling decarbonization of the steel making process.

Houston female-focused VC fund leads round of fintech company

The Artemis Fund — led by Diana Murakhovskaya, Leslie Goldman, and Stephanie Campbell — has announced its latest investment. Courtesy photos

Houston-based Artemis Fund — a women-led, female-focused venture capital fund, has released information on its latest investment. The firm announced it has led the seed funding round for Los Angeles-based Payverse, a payment processor focusing on enabling global commerce via emerging technologies.

The round also saw participation from Alpha Ascent Ventures, Frank Mastrangelo, Mary Wieler, and Jonathan Palmer. Hunton Andrews Kurth LLP represented Artemis in the deal.

“The Artemis Fund invests in phenomenal female talent modernizing and diversifying wealth. Payverse is poised to transform the payments industry by making it easier and more cost-effective for businesses and consumers to transact globally," says Stephanie Campbell, general partner at The Artemis Fund, in a news release. "We are proud to lead the company’s seed round which includes other top FinTech experts and industry leaders."

Houston public service professional accelerator opens applications for its second cohort

HTXelerator is gearing up for its second cohort. Photo via HoustonTX.gov

With its mission to identify and prepare future-focused leaders for public service, specifically boards, commissions, and city council, HTXelerator, a nonprofit that launched last fall, has opened applications for the second cohort. The three-month program trains class members on the nuts and bolts of city government and ends with a competition known as The Pitch, which enables each participant to put forward a policy platform for a hypothetical race.

“The Houston region continues to grow and subsequently so does the need for public leadership to reflect the city’s dynamic diversity," says Renee Cross, senior director at the University of Houston's Hobby School of Public Affairs, in a news release. "HTXelerator will allow people with an interest in public service to learn from experts in government, non-profit organizations, academia and the private sector. Whether pursuing a leadership position or running for office, HTXelerator graduates will be ahead of the game.”

Applications are due by August 22, and the cohort members will be announced by August 29. There is no fee to apply, but the program costs $250 per participant. Scholarships are available for those that need assistance. The program kicks off with a weekend retreat September 10 and 11 and ends with The Pitch competition on December 7.

Houston startup partners with pet tech giant

Wag, Robinhood, and DonateStock have teamed up on a new initiative. Photo by Jason Briscoe on Unsplash

Houston-based DonateStock, a fintech platform that easily enables stock-based donations, has been adopted by Wag, a mobile-first marketplace for pet services. The company, which also struck a deal with Robinhood. Through these partnerships, the company has launched its Wag! Community Shares Program, a new method of charitable giving for the community of pet caregivers and for domestic pet nonprofit organizations, according to a news release.

Through its SPAC, CHW Acquisition Corp., Wag! will reserve up to 300,000 shares of common stock for the program, to be arranged through and administered by Robinhood. The company goes into more details — including information on how to participate — in the release.

“We are excited to play a key role in this ground-breaking initiative to use common stock to support domestic pet nonprofits at scale,” says Steve Latham, CEO and co-founder of DonateStock, in the release. “Our mission is to democratize charitable stock gifting. By allocating stock to more than 500 pet nonprofits, Wag! is expanding the definition of what that means.”

Annual business competition lifts off

Houston business competition opens applications

Small businesses in Houston can apply for the annual Liftoff Houston competition. Photo via liftoffhouston.smapply.org

The city of Houston's annual business plan competition has kicked off. Liftoff Houston is an entrepreneurial initiative aimed at empowering Houston entrepreneurs mentorship and business support and education.The program's sponsor, Capital One Bank, provides cash prizes totaling $30,000.

To be eligible for the startup program, the applicant:

  • Must be in the start-up phase of your business, which means you either must have a business idea or have a business in operation for less than one year
  • Must have revenue of less than $10,000
  • Must live within the city of Houston limits. Also, if you have a business location, it must be within the city of Houston limits.

Participants can also apply for the 2022 Liftoff Houston Educational Pathway. There are no eligibility requirements for that program, which will support small businesses and provide access to workshops and the final competition event.

There will be three award categories: product, service, and innovation.

  • $10,000 – Awarded for top “Product” Based Business Plan (Retail, resale, merchandise, etc.)
  • $10,000 – Awarded for top “Service” Based Business Plan (Food, labor, consulting, etc.)
  • $10,000 – Awarded for top “Innovation” Based Business Plan (Software, Hardware, inventions, new market businesses, etc.)

The competition will open applications online on July 27 and close August 19. The full schedule is online.

The energy industry is finally prioritizing new technology and greener energy — both in light of and in spite of a global pandemic. Photo via Getty Images

Overheard: Here’s what these energy VCs think of the pandemic’s effect on the energy transition

eavesdropping online

In a lot of ways, venture capital firms are tasked with predicting the future. They put money into tech and business services that are going to disrupt the status quo, and energy VCs are tasked with taking bets on the energy transition.

At a virtual event as a part of the 18th annual Rice Alliance Energy Tech Venture Forum, which is taking place online this week, a group of panelists moderated by Sandy Guitar, managing partner at the HX Venture Fund, discussed how the pandemic has affected the energy transition. The group of experts talked about the future of work, decarbonization, and more.

If you missed the event, here are a few key moments from the discussion.

“The role of digitization is going to be huge. The pandemic really exacerbated just how far oil and gas had been behind in that.”

— Sean Ebert, partner at Altira. Ebert explains that when times are good for energy companies, it's hard to get the attention of executives to introduce new technologies. Now, corporations are having to invest in tech that allows their employees to be mobile and remote.

“There’s never been a better time to invest in energy technology. … We are at a point where we can get the type of returns [we look for.]”

— George Coyle, managing partner at Energy Innovation Capital. Coyle adds that he's seen the pandemic effect major growth opportunities in energy startups in his portfolio.

“What we have is a sense of urgency that didn’t exist 15 years ago. Public companies virtually all have a sustainability report and need to show some sort of progress."

— Cory Steffek, managing director at Ara Partners. He adds, "I really think the opportunity in the near term is de-risking software or hardware technologies and showing people that you can construct assets where they can deploy substantial amounts of capital profitably. If you have that, from a returns standpoint, you have something that should generate significant yield."

“The part we have been focused on is how can you make the conventional more efficient, so energy-on-energy conversion is even better.”

— Hossam Elbadawy, managing director at SCF Ventures and technology partner at SCF Partners. He's referring to the question of whether to prioritize new low-carbon innovations or to make conventional methods more sustainable. His observation is that the solution is going to be a hybrid of both.

“When we think about the future of work, we think about what are the capabilities going to be required in the future to be able to improve operations in the field today?”

— Ricardo Angel, managing director and CEO of PIVA. Angel adds that, "a lot of activities might be replaced by AI," and he and his firm are thinking about how they can go about "developing the skills for the people who will be working with those tools."

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Texas plugs in among states at highest risk for summer power outages in 2025

hot, hot, hot

Warning: Houston could be in for an especially uncomfortable summer.

A new study from solar energy company Wolf River Electric puts Texas at No. 2 among the states most at risk for power outages this summer. Michigan tops the list.

Wolf River Electric analyzed the number of large-scale outages that left more than 5,000 utility customers, including homes, stores and schools, without summertime electricity from 2019 to 2023. During that period, Texas experienced 7,164 summertime power outages.

Despite Michigan being hit with more summertime outages, Texas led the list of states with the most hours of summertime power outages — an annual average of 35,440. That works out to 1,477 days. “This means power cuts in Texas tend to last longer, making summer especially tough for residents and businesses,” the study says.

The Electric Reliability Council of Texas (ERCOT), which operates the electric grid serving 90 percent of the state, predicts its system will set a monthly record for peak demand this August — 85,759 megawatts. That would exceed the current record of 85,508 megawatts, dating back to August 2023.

In 2025, natural gas will account for 37.7 percent of ERCOT’s summertime power-generating capacity, followed by wind (22.9 percent) and solar (19 percent), according to an ERCOT fact sheet.

This year, ERCOT expects four months to surpass peak demand of 80,000 megawatts:

  • June 2025 — 82,243 megawatts
  • July 2025 — 84,103 megawatts
  • August 2025 — 85,759 megawatts
  • September 2025 — 80,773 megawatts

One megawatt is enough power to serve about 250 residential customers amid peak demand, according to ERCOT. Using that figure, the projected peak of 85,759 megawatts in August would supply enough power to serve more than 21.4 million residential customers in Texas.

Data centers, artificial intelligence and population growth are driving up power demand in Texas, straining the ERCOT grid. In January, ERCOT laid out a nearly $33 billion plan to boost power transmission capabilities in its service area.

Houston ranks among top 5 cities for corporate HQ relocations in new report

h-town HQ

The Houston area already holds the title as the country’s third biggest metro hub for Fortune 500 headquarters, behind the New York City and Chicago areas. Now, Houston can tout another HQ accolade: It’s in a fourth-place tie with the Phoenix area for the most corporate headquarters relocations from 2018 to 2024.

During that period, the Houston and Phoenix areas each attracted 31 corporate headquarters, according to new research from commercial real estate services company CBRE. CBRE’s list encompasses public announcements from companies across various sizes and industries about relocating their corporate headquarters within the U.S.

Of the markets included in CBRE’s study, Dallas ranked first for corporate relocations (100) from 2018 to 2024. It’s followed by Austin (81), Nashville (35), Houston and Phoenix (31 each), and Denver (23).

According to CBRE, reasons cited by companies for moving their headquarters include:

  • Access to lower taxes
  • Availability of tax incentives
  • Proximity to key markets
  • Ability to support hybrid work

“Corporations now view headquarters locations as strategic assets, allowing for adaptability and faster reaction to market changes,” said CBRE.

Among the high-profile companies that moved their headquarters to the Houston area from 2018 to 2024 are:

  • Chevron
  • ExxonMobil
  • Hewlett-Packard Enterprise
  • Murphy Oil

Many companies that have shifted their headquarters to the Houston area, such as Chevron, are in the energy sector.

“Chevron’s decision to relocate its headquarters underscores the compelling advantages that position Houston as the prime destination for leading energy companies today and for the future,” Steve Kean, president and CEO of the Greater Houston Partnership, said in 2024. “With deep roots in our region, Chevron is a key player in establishing Houston as a global energy leader. This move will further enhance those efforts.”

According to CBRE, California (particularly the San Francisco Bay and Los Angeles areas) lost the most corporate HQs in 2024, with 17 companies announcing relocations—12 of them to Texas. Also last year, Texas gained nearly half of all state-to-state relocations.

In March, Site Selection magazine awarded Texas its 2024 Governor’s Cup, resulting in 13 consecutive wins for the state with the most corporate relocations and expansions.

In a news release promoting the latest Governor’s Cup victory, Gov. Greg Abbott hailed Texas as “the headquarters of headquarters.”

“Texas partners with the businesses that come to our great state to grow,” Abbott said. “When businesses succeed, Texas succeeds.”

CBRE explained that the trend of corporate HQ relocations reflects the desire of companies to seek new environments to support their goals and workforce needs.

“Ultimately, companies are seeking to establish themselves in locations with potential for long-term success and profitability,” CBRE said.

SpaceX test rocket explodes in Texas, but no injuries reported

SpaceX Update

A SpaceX rocket being tested in Texas exploded Wednesday night, sending a dramatic fireball high into the sky.

The company said the Starship “experienced a major anomaly” at about 11 pm while on the test stand preparing for the 10th flight test at Starbase, SpaceX’s launch site at the southern tip of Texas.

“A safety clear area around the site was maintained throughout the operation and all personnel are safe and accounted for,” SpaceX said in a statement on the social platform X.

CEO Elon Musk ’s SpaceX said there were no hazards to nearby communities. It asked people not to try to approach the site.

The company said it is working with local officials to respond to the explosion.

The explosion comes on the heels of an out-of-control Starship test flight in late May, which tumbled out of control. The FAA demanded an investigation into the accident.

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