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

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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Houston e-commerce unicorn reaches $1.6B valuation with $50M fundraising round

fresh funding

Houston-based Cart.com, a provider of fulfillment and logistics services for B2C and B2B brands, has raised $50 million in venture capital, pushing its valuation to $1.6 billion. Since it was founded in 2020, Cart.com has raised $475 million.

Cart.com earned “unicorn” status in 2023 after securing a $60 million Series C round of funding. In the startup universe, “unicorn” refers to a private company that’s valued at $1 billion or more. Last year, Cart.com nailed down $130 million in debt funding, lifting its valuation to $1.2 billion.

Technically, Cart.com no longer qualifies as a startup. Rather, it’s now in “scaleup” territory. This term refers to a startup that has notched substantial growth and has maintained a stable workforce, among other positive achievements. Notable brands that have graduated from startup to scaleup include Airbnb, Peloton and Uber.

The $50 million round includes money from funds and accounts managed by BlackRock and Neuberger Berman, and new investors such as eGateway Capital, along with several unidentified venture capital firms, investors and family offices.

The company said it will use the fresh capital to fuel its global expansion through investments in infrastructure, technology, and M&A.

“Cart.com is continuing our strong growth trajectory across all operating metrics, and we intend to utilize this additional capital to accelerate the expansion of our platform and bring our customers new capabilities to enable their growth,” Omair Tariq, founder and CEO of Cart.com, said in a news release. Tariq added that his company is “well on our way to building the largest and most comprehensive platform in our space.”

Over the past 12 months, Cart.com completed its acquisition of OceanX, the fulfillment operation of direct marketing company Guthy-Renker, and Amify, an Amazon marketplace optimization and advertising platform. Bill Guthy, founder of Guthy-Renker, now sits on Cart.com’s board of directors

Texas luxury bus service adds route connecting The Woodlands and Dallas

Travel Time

Houston-area business and leisure travelers have a convenient new route to check out thanks to Vonlane. The Texas-based luxury motor coach service is adding a new daily service between The Woodlands and Dallas starting June 13.

Vonlane already offers service between Dallas and downtown Houston, at the Hyatt Regency at 1200 Louisiana St., eight times per day starting at 6 am. The ride takes 3 hours and 45 minutes.

According to Vonlane founder and CEO Alex Danza, The Woodlands has been a much-requested route.

“The Woodlands area has been our most requested geographic addition for several years, so we’re thrilled to announce this expansion, our 10th destination on our 11th anniversary,” Danza says. “Bringing our elevated bus service to suburban areas is a strategic priority as we seek to relieve the hassles of driving and air travel for our passengers and better meet them where they live, work, and play.”

The new service brings a convenient nonstop route to and from the northern fringe of Houston — The Woodlands, Spring, Cypress, Conroe, Montgomery County, and northern Harris County.

Beginning June 13, The Woodlands-Dallas route will offer the following departures:

  • Monday, Thursday, and Friday: 6:15 am, 10:15 am, 2:15 pm, and 6:15 pm – departing both The Woodlands and Dallas
  • Tuesday, Wednesday, and Sunday: 10:15 am and 2:15 pm – departing both The Woodlands and Dallas
  • Saturday: 9 am: departing The Woodlands
  • Saturday 1 pm: departing Dallas

This ride will take 3 hours and 15 minutes.

The new drop-off point for The Woodlands service will be at Woodlands Waterway Marriott Hotel & Convention Center, 1601 Lake Robbins Dr.. According to Danza, The Woodlands Waterway Marriott offers easy access to I-45, ample parking, and high-quality accommodations.

Riders will depart in Dallas at the established stop at Doubletree Love Field, 3300 W. Mockingbird Ln. The new route offers proximity to major employers in the area such as Alight Solutions, Baker Hughes, Chevron Phillips, Entergy, ExxonMobil, Hewlett-Packard, Houston Methodist, Huntsman Corporation, Lone Star College, McKesson, Memorial Hermann, Occidental Petroleum, St. Luke’s Health, and Texas Children’s.

Visit The Woodlands president Nick Wolda says in a statement that The Woodlands is a popular destination for Dallas residents.

“Visit The Woodlands is excited to welcome Vonlane to The Woodlands Waterway Marriott and Conference Center. This first-class amenity is a fantastic addition to our vibrant community, perfectly designed to elevate the travel experience,” Wolda says. “The Woodlands is the go-to destination for trips from the DFW area—whether you're a corporate conventioneer, a Pavilion concertgoer, a college student coming home, or a weekend shopping trip with friends. With this new service, getting to and from The Woodlands has never been easier or more enjoyable!"

Vonlane buses have 22 first-class leather seats, ample workspace, complimentary Wi-Fi, and an onboard attendant offering premium cabin service with snacks, meals, and beverages included.

Fares are a flat rate of $125 for one-way trips with advance purchase. No taxes, baggage fees, or change fees apply. Rates increase with less than seven days’ notice and within 24 hours before departure.

Tickets can be booked at www.vonlane.com.

Vonlane was founded in Texas in 2014 and offers more than 475 weekly departures across 10 destinations.

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A version of this story originally appeared on CultureMap.com.

Houston aerospace co. soars with first U.S. test flight of hypersonic engine

taking off

Houston-based Venus Aerospace successfully completed the first U.S. flight test of its proprietary engine at a demonstration at Spaceport America in New Mexico.

Venus’ next-generation rotating detonation rocket engine (RDRE) is supported by a $155,908 federal Small Business Innovation Research (SBIR) grant from NASA and aims to enable vehicles to travel four to six times the speed of sound from a conventional runway. The recent flight test was the first of an American-developed engine of its kind.

"With this flight test, Venus Aerospace is transforming a decades-old engineering challenge into an operational reality,” Thomas d'Halluin, managing partner at Airbus Ventures, an investor in Venus, said in a news release. “Getting a rotating detonation engine integrated, launch-ready, and validated under real conditions is no small feat. Venus has shown an extraordinary ability to translate deep technical insight into hardware progress, and we're proud to support their bold approach in their attempt to unlock the hypersonic economy and forge the future of propulsion."

Venus’ RDRE operates through supersonic shockwaves, called detonations, that generate more power with less fuel. It is designed to be affordable and scalable for defense and commercial systems.

The RDRE is also engineered to work with the company's air-breathing detonation ramjet, the VDR2, which helps enable aircraft to take off from a runway and transition to speeds exceeding Mach 6. Venus plans for full-scale propulsion testing and vehicle integration of this system. Venus’ ultimate goal is to develop a Mach 4 reusable passenger aircraft, known as the Stargazer M4.

"This milestone proves our engine works outside the lab, under real flight conditions," Andrew Duggleby, Venus co-founder and chief technology officer, said in the release. "Rotating detonation has been a long-sought gain in performance. Venus' RDRE solved the last but critical steps to harness the theoretical benefits of pressure gain combustion. We've built an engine that not only runs, but runs reliably and efficiently—and that's what makes it scalable. This is the foundation we need that, combined with a ramjet, completes the system from take-off to sustained hypersonic flight."

The hypersonic market is projected to surpass $12 billion by 2030, according to Venus.

"This is the moment we've been working toward for five years," Sassie Duggleby, CEO and co-founder of Venus Aerospace, added in the release. "We've proven that this technology works—not just in simulations or the lab, but in the air. With this milestone, we're one step closer to making high-speed flight accessible, affordable, and sustainable."