Houston medical device startup closes $6M series A

money moves

This innovative medical device company has closed $6 million for further product development and clinical trials. Image via Getty Images

A Houston-based medical device company born out of the Texas Medical Center has closed its series A round of funding.

Ictero Medical's oversubscribed $6 million round was led by MedTex Ventures, S3 Ventures, and an undisclosed strategic investor, according to a news release. The company's novel cryoablation system was designed to treat high-risk gallstone disease patients and provide a less invasive and lower risk alternative to gallbladder removal surgery — something over 1 million Americans undergo annually.

“Our technology provides an immediate solution for critically ill patients who currently have no good treatment options, and also has the potential to benefit healthier patients who want to avoid surgery,” says Ictero Co-Founder and CEO Matthew Nojoomi in the release.

Recently, Ictero Medical entered into a partnership with Houston medical device development firm Biotex. The collaboration provides the company with engineering resources and in-house manufacturing tools. Ictero also received capital support from MedTex Ventures through its Biotex Medical Device Fund.

“We are excited about working with the Ictero team to advance its technology, which we believe can significantly improve patient experiences and outcomes by providing a non-surgical alternative to treating gallbladder disease,” says Biotex CEO Ashok Gowda in the release.

The fresh funds will be put toward further product development and initial clinical testing.

“MedTex Ventures is enthusiastic about Ictero’s novel cryoablation technology and its potential to solve the unmet need of inoperable patients with gallbladder disease,” says John Fichthorn, CIO of MedTex Ventures, in the news release. “Equally important is the team. We believe the combination of Ictero and Biotex’s technical capabilities, alongside the support from key investors with commercial experience, such as S3 Ventures, position the company for long term success.”

Ictero was founded as a part of the Texas Medical Center’s Biodesign Fellowship program in 2018. Since launch, the company has received a Phase I NSF grant and closed a $1 million seed round co-led by the Texas Medical Center Venture Fund and Texas HALO Fund.

“Ictero is at the forefront of pioneering cryotherapy for gallstone disease, and S3 Ventures is excited about the potential for Ictero’s novel solution to rapidly bring an impactful outcome to patients,” says Kim Rodriguez, venture partner at S3, in the release. “Our research suggests a substantial opportunity to help patients suffering from gallstone disease who are dependent on drainage catheters or too sick for surgery. We are joining a solid investment syndicate in supporting a very capable team.”

This week's roundup of Houston innovators includes Angela Holmes of Mercury Data Science, Ashok Gowda of BioTex, and Rachel Moncton of ClassPass. Courtesy photos

3 Houston innovators to know this week

who's who

Editor's note: In the week's roundup of Houston innovators to know, I'm introducing you to three local innovators across industries — data science, consumer tech, and medical device innovation — recently making headlines.

Angela Holmes, chief operating officer of Mercury Data Science

Mercury Data Science has taken a tool it originally developed for COVID-19 research and applied it into new areas of research and innovation. Photo courtesy of MDS

When the pandemic hit, the team at Mercury Data Science knew data was going to have a huge role to play. Last fall, MDS released an AI-driven app designed to help researchers unlock COVID-19-related information tucked into biomedical literature. The app simplified access to data about subjects like genes, proteins, drugs, and diseases.

Now, a year into the coronavirus pandemic, the company is applying this technology to areas like agricultural biotech, in which the platform enables researchers to sift through literature to dig up data about plant genetics, says Angela Holmes, chief operating officer at MDS. The lack of gene-naming standards in the world of plants complicates efforts to search data about plant genetics, she says.

The platform's ability to easily ferret out information about plant genetics "allows companies seeking gene-editing targets to make crops more nutritious and more sustainable as the climate changes to have a rapid way to de-risk their genomic analyses by quickly assessing what is already known versus what is unknown," Holmes says. Click here to read more.

Ashok Gowda, founder and CEO of BioTex

Houston-based BioTex works with medical device and health tech companies from all stages, from R&D to commercialization. Photo via biotexmedical.com

In the process of building a medical device company called Visualase and exiting it to Medtronic for over $100 million, Ashok Gowda learned a lot. And, over the past two decades, he's been sharing that knowledge and expertise of his and his team to medtech companies of all stages at Houston-based BioTex.

"Ultimately we built a nice infrastructure by supporting (the Visualase) spin out," Gowda tells InnovationMap. "And we learned a lot about not just product development, but about commercializing and creating a new market that may not exist. And we had some really good, experienced commercial folks we had hired on the Visualase side. I just think it's a good learning lesson that you can't really teach this stuff — you gotta experience it really to understand." Click here to read more.

Rachel Moncton, vice president of Global Marketing at ClassPass

Rachel Moncton shares why ClassPass tapped Houston as a prime place to expand. Photo courtesy of ClassPass

Rachel Moncton has lived all over the world in her career at fitness and wellness-focused consumer tech company, ClassPass — and her latest assignment has been standing up the company's fourth domestic office right here in Houston, Texas.

On last week's episode of the Houston Innovators Podcast, Moncton shares how Houston as a hub offers the growing company a chance to be a big fish in a small consumer tech pond.

"I get a lot of people saying, 'Houston? That's an interesting choice and not what we'd expect,'" Moncton says. "But that's one of the things we like about it. There's a good startup scene here but not a million different consumer tech companies, so it's nice that we are able to make a bit of a splash." Click here to read more.

Houston-based BioTex works with medical device and health tech companies from all stages, from R&D to commercialization. Photo via biotexmedical.com

Houston medtech company helping to get health care innovations from idea to exit

future of health care

Founding a health tech company is a process unlike any other startup. From the regulatory phase to clinical trials, health tech innovators face a long runway from idea to market, but a Houston-based organization has been working for over 20 years to help make that take-off process run more smoothly.

Ashok Gowda founded BioTex Inc. in 1998, and at the time he was finishing up his PhD at Texas A&M University and wanted a company to support his own health tech ideas, including Visualase Inc. After the real-time tissue monitoring system exited to Medtronic for over $100 million, Gowda realized he can put everything he had learned from taking Visualase from idea to exit and apply it to new medical device innovation.

At this point, BioTex has worked with over 40 medical device and health tech companies in some capacity — from early prototyping and research and development to FDA approval, manufacturing, and even distribution. With a staff of around 50 and an 18,000-square-foot facility just south of the Texas Medical Center, BioTex can support around 10 to 15 clients at a time — usually in the medical device sector but across specialties from neurosurgery, cardiology, radiology, urology, gynecology, orthopedics, anesthesia, and more.

BioTex has an 18,000-square-foot facility just south of the Texas Medical Center with R&D space for its clients. Photo via biotexmedical.com

"It's a pretty broad experience, and I think it gives us a good perspective when we talk to a physician or a group of entrepreneurs — we can pretty easily get up to speed or understand the problem because we've usually worked in this space before," Gowda says.

With the infrastructure BioTex has in place, Gowda says he still sees one aspect of health tech development that needs more attention.

"There are obviously a lot of really good ideas here and a lot of push to try to get those ideas to market. But, there are very few of those that have gotten to market and to become commercial products," Gowda says. "It does require a lot of capital to bring medical technology to market — and it usually requires a lot of time as well."

Health tech founders facing the long runway of development usually need enough funds to support them through the process — as well as the know how and support BioTex has.

"We think we solve few of these problems with our in-house expertise, but the one that we are now focused on and trying to solve is the funding gap," Gowda says. "When we see a good idea or a technology, we want to help them get that to market and not let that lack of funding be an impediment."

Ashok Gowda is the president and CEO of BioTex. Photo via biotexmedical.com

At Houston Exponential's second annual HX Capital Summit, four Houston entrepreneurs turned investors discussed their lessons learned. Getty Images

Here's what startups can learn from Houston exits

Success stories

One way to evaluate a city's innovation ecosystem is by the number of successful exits they've had. From startups being acquired by big companies to bringing in a private equity partner, exits can put a city on the map.

Houston has quite a few exits under its belt, and some of those entrepreneurs have stayed in town to fund future success stories. At Houston Exponential's second annual HX Capital Summit, four entrepreneurs discussed their exits, providing key lessons learned for entrepreneurs.

Houston has some perks.

One thing moderator Samantha Lewis, director at the GOOSE Society of Texas, asked each panelist was what made each entrepreneur start their companies in Houston — and furthermore, what made them stay here after their successful exit.

Panelist Ashok Gowda co-founded and served as COO at Visualase Inc., a real-time tissue monitoring system that exited to Medtronic for over $100 million. He now leads Biotex, a Houston-based medical technology investment firm and accelerator, as president and CEO.

For Gowda, Houston was obviously a key market for med tech, but it provided something even more once he reached the commercialization phase of a product.

"From a commercial standpoint, once the technology became commercial, it was an ideal location," Gowda says. "We were traveling all across the US, and it was a nice hub. We're right in the center of the country, and you can get to either coast very quickly."

The panel also agreed that the quality of life in Houston played a major role in settling down.

You might need to rethink your executive team.

The panel full of venture capitalists of course touched on the ability to fundraise in Houston, as each panelist had been on both sides of the table. For Gowda, it's pretty simple.

"If you're struggling to raise money, you either have a bad idea or the wrong team," he says, adding that if you really believe in your idea, take a good hard look at who's at the leadership level of your team.

Talent is still a challenge in Houston.

Of course, if you do identify a problem within your team, finding the right leader for your technology might be difficult in Houston.

Keith Kreuer, who was also on the panel, is principal at RedHouse Associates, a group of angel investors that invest like a find would, but without having a fund. Between Kreuer and his team, they were involved in 10 startups before forming the investment group.

"We could find developer and sales talent here, but to get to that higher executive talent, we had to go out to other places," Kreuer says.

However, not all of the panelists agreed that talent was a major challenge they faced. Some noted that they got lucky with the talent they found.

Don Kendall, CEO of Kenmont Capital Partners, came to Houston to run a power company and family office. He turned $100,000 into $1.6 billion and now is a member of GOOSE.

"We had no problem getting the engineering talent," Kendall says. "We really found Houston to be a good environment, and it's only just continued to improve."

Playing to Houston's strengths might be key to success.

For Gray Hall, managing director at Austin-based BuildGroup, which focuses on writing big checks to a small amount of software startups, he knew how to play to his company's and Houston's strengths.

Hall previously served as CEO of AlertLogic, which had a private equity exit in 2013, and Hall stayed on until 2018 as the company continued to grow. He also co-founded Veracenter, which had a strategic exit after growing to $80 million in annual revenue.

"The common theme across both companies and why we were able to grow is real simple: Customer and people," Hall says.

Houston might be one of the country's best kept secrets when it comes to midmarket activity, Hall notes — midmarket companies being defined as those with $50 million to $1 billion in revenue.

"What Houston doesn't get enough credit for is the midmarket in Houston, which I think is tremendous," Hall says. "It's as strong as anywhere else in the country."

AlertLogic was able to tap into this midmarket to quickly grow its client base.

Something else that differentiates Houston from other cities is its culture, which is less focused on the glitz and glam and more focused on hard work.

"Engage with people that have a credible story and a credible plan to solve a problem," he says.

Houston is growing.

One thing each of the entrepreneurs agreed on is that the city is only growing its resources and quality of startups.

"I see Houston as sort of a startup in the startup world," Kreuer says. "And, what we're trying to do is grow and catch up to the West Coast and the East Coast, but I think Texas as a whole is going to be pretty powerful, and Houston is going to be a central part of that mainly because we have the markets here, and the people in the area and the talent to do that."

As Houston's success stories become more frequent, this provides an avenue for more entrepreneurs turned investors.

"When you've done it before, you've learned the lessons, and you feel like you can do it again and again," Gowda says. "That's what we're trying to do. You see all the possibilities here."

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California-founded biotech startup relocates to join Houston's emerging bioeconomy

Cameron Owen had an idea for a synthetic biology application, and he pitched it to a handful of postdoctoral programs. When he received the feedback that he didn't have enough research experience, he decided to launch a startup based in San Diego around his idea. He figured that he'd either get the experience he needed to re-apply, or he'd create a viable company.

After three years of research and development, Owen's path seems to have taken him down the latter of those two options, and he moved his viable company, rBIO, to Houston — a twist he didn't see coming.

“Houston was not on my radar until about a year and a half ago,” Owen says, explaining that he thought of Houston as a leading health care hub, but the coasts still had an edge when it came to what he was doing. “San Diego and the Boston area are the two big biotech and life science hubs.”

But when he visited the Bayou City in December of 2021, he says he saw first hand that something new was happening.

“Companies from California like us and the coastal areas were converging here in Houston and creating this new type of bioeconomy,” he tells InnovationMap.

Owen moved to Houston last year, but rBIO still has an academic partner in Washington University in St. Louis and a clinical research organization it's working with too, so he admits rBIO's local footprint is relatively small — but not for long.

"When we look to want to get into manufacturing, we definitely want to build something here in Houston," he says. "We’re just not to that point as a company."

In terms of the stage rBIO is in now, Owen says the company is coming out of R&D and into clinical studies. He says rBIO has plans to fundraise and is meeting with potential partners that will help his company scale and build out a facility.

With the help of its CRO partner, rBIO has two ongoing clinical projects — with a third coming next month. Owen says right now rBIO is targeting the pharmaceutical industry’s biologics sector — these are drugs our bodies make naturally, like insulin. About 12 percent of the population in the United States has diabetes, which translates to almost 40 million people. The demand for insulin is high, and rBIO has a way to create it — and at 30 percent less cost.

This is just the tip of the iceberg — the world of synthetic biology application is endless.

“Now that we can design and manipulate biology in ways we’ve never been able to before,” Owen says, "we’re really only limited by our own imagination.”

Synthetic biology is a field of science that involves programing biology to create and redesign natural elements. While it sounds like science fiction, Owen compares it to any other type of technology.

“Biology really is a type of software,” he says. “Phones and computers at their core run on 1s and 0s. In biology, it’s kind of the same thing, but instead of two letters, it’s four — A, C, T, and G.”

“The cool thing about biology is the software builds the hardware,” he continues. “You put that code in there and the biology builds in and of itself.”

Owen says the industry of synthetic biology has been rising in popularity for years, but the technology has only recently caught up.

“We’re exploring a brave new world — there’s no doubt about that,” Owen says.

Houston Airports soar with first-class awards in international ceremony

top of the line

We can now dub Houston the city of first-class airports and first-class service.

During the 2023 Skytrax World Airport Awards in Amsterdam, the Houston airport system earned several prestigious honors, including a second consecutive five-star rating.

Skytrax is the leading international air transport rating organization; they determine their ratings based on annual audits of every airport. This year, the Houston airport system won in a new category that was unveiled at the ceremony – “Best Art in the Airport” – which was determined by a panel of judges.

Mario Diaz, the director of aviation for Houston Airports, said in a press release that superior customer service is the “guiding light” for the city’s airport system.

“Excellent customer service is at our core; an expansive and eclectic arts program, just awarded World’s Best Art Program in 2023, provides a meaningful and memorable experience,” said Diaz.

The awards continued to stack up. William P. Hobby Airport maintained its five-star rating for the second year in a row. It is one of 18 total five-star airports in the world, but the one and only five-star Skytrax airport in North America.

Other accolades the Hobby Airport earned include:

Best Regional Airport in North America, for the second consecutive year
No. 2 Best Airport in the United States
No. 3 Best Airport in North America

George Bush Intercontinental Airport (IAH) maintained its four-star classification for the sixth year in a row. It was also named the fourth best airport in North America, and third best in the United States.

Houston mayor Sylvester Turner said the Skytrax awards reaffirm the city airports’ “dedication to detail and commitment to customer service.”

“Houston truly is a global city where our guests are valued and celebrated,” he praised. “Another year of [five]-star and [four]-star ratings is proof that the investments we continue to make in our Houston Airports arts program, airport infrastructure and technology and team members are smart and successful investments that lead to a world-class and award-winning passenger experience.”

More information about the awards can be found on fly2houston.com.

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This article originally ran on CultureMap.

Houston expert: Here's why your top candidate turned down your job offer

guest column

One of the most disappointing (and costly) things as a hiring manager is when your top candidate declines the job offer. You spend months defining target skills and characteristics, reviewing résumés and interviewing candidates to narrow down to your finalist of choice. You put together what you believe is a strong offer, and the candidate says “no.” What went wrong?

It’s not an employer’s job market anymore. In this transformed workplace, and at a time of historically low unemployment, it is very much an employee’s market, and he/she can afford to be selective. Below are some common reasons candidates turn down job offers and what you can do to prevent them.

No. 1: The interview process took too long

It takes time to identify the right fit, and a typical hiring process will often involve 2-3 interviews with decision makers in different locations. You also want to pinpoint a candidate you like and compare him/her to other candidates. When all is said and done, you’re often looking at an interview process that can take 6-8 weeks. During this time, it’s critical to stay in touch with the candidate. A simple email with a status update will help keep them engaged. This is also a great time to check references, showing the candidate your continued interest.

While you’re focused on filling the position, it’s easy to forget candidates have deadlines, too. A lengthy interview process with periods of little interaction can make a candidate feel you don’t respect his/her time or make your company appear disorganized, something they may be leery of based on past experience. Setting expectations upfront and maintaining open lines of communication are key in this candidate-driven environment.

Equally important to an efficient hiring process is encouraging non-essential decision makers to let go after a certain point. For example, once a small sized business graduates to a midsized company, a CEO should not make the mistake of thinking they have to talk to every single prospect. They need to approve them. Delegating and trust are key.

No. 2: You didn’t ‘sell’ the opportunity enough

It’s easy to forget interviews are as much about the candidate interviewing you as you interviewing the candidate. While you want to assess the person’s skills and cultural fit, the candidate wants to know how the role will match his/her personal and professional goals. Heck, they want to know how it stacks up against other jobs for which they might be applying!

Career growth is something every candidate wants. It’s critical for the hiring manager to discuss training and personal development opportunities. This is particularly important for millennials, who are often more motivated by the ability to learn and grow than they are by an increase in financial compensation. It’s also important to talk about the company culture and what makes you stand out. Bottom line: You want the candidate to leave the interview knowing he/she will be appreciated by your company and will get an experience that can’t be found elsewhere. To this end, expressing genuine interest in their life outside of work (loved ones, what makes them tick, etc.) can make all the difference.

No. 3: Lack of employer brand appeal

Companies spend a lot of time branding their products and services but don’t always think about how they look to future employees. Your M.O. is how you show candidates what it’s like to work for you. This includes their overall interview process experience, reviews on websites like Glassdoor, as well as posts your company and employees share on social media.

Let candidates get to know your company through posts. Show your team having fun together, being involved in the community and as customer-focused professionals. Employees also give hints about their work experience in their own social content. If they’re happy, it’ll show in their online activity.

These first three reasons for why a job offer might be turned down are all about how a hirer makes a candidate feel, but the fine print matters too.

No. 4: Job duties

It may seem like a no-brainer that a job description should be well-written, but more often than not, it’s unclear what will be expected of said employee. When you do the internal work ahead of time, getting alignment on what’s required and the intricacies of the existing (or new) position, it leaves little room for misunderstanding and/or disappointment post-hire.

No. 5: Compensation and benefits

Lastly, a strong compensation and benefits package is critical in securing your top pick. For some roles, that will mean an offer heavily weighed on the salary side. For others, it will be uncapped commissions or the opportunity for equity. Make sure the package is competitive with the industry, and will appeal to your ideal candidate and make him/her want to join your team.

Remember to think “outside the box” with extra benefits like flexible work hours, the ability to work remotely, PTO/unlimited sick days or vacation. The cost to implement these perks is low, but they often mean more to the candidate than higher pay.

In today’s employee-driven job market, top candidates are looking for a comprehensive package, growth opportunities, and a welcoming work environment that will provide lasting happiness and satisfaction.