Mobile vet business, virtual reality for space, plant-based biotech, and more — all this innovation and more is coming out of Houston startups. Courtesy photos

Editor's note: As 2020 comes to a close, InnovationMap is looking back at the year's top stories in Houston innovation. This past year, InnovationMap featured profiles on dozens of these Houston startups — from blockchain and software companies to startups with solutions in health care and oil and gas. Here are excerpts of 10 that stood out throughout 2020 — be sure to click through to read the full story.

Houston health tech startup moves into new office amid major growth

BrainCheck has moved to a new office as it grows its team and expands its product. Natalie Harms/InnovationMap

Following a series A round of fundraising, a Houston digital health startup is on a bit of a hiring spree, leading to new office space the company has room to grow into.

BrainCheck, which was founded in 2015 by neuroscientist David Eagleman, is a cognitive assessment startup that has developed a software tool for primary care doctors to use to assess their patients' cognitive health so that they can more quickly diagnose and treat them for maladies like dementia.

The 19-person company headquartered in Houston — with a secondary office in Austin focused on product development — has relocated its operations from coworking space in the Texas Medical Center to an office in the Rice Village area. The move was made possible by an $8 million series A financing round that closed in October.

"It's pretty exciting to have reached this milestone where we need more space," Yael Katz, co-founder and CEO of BrainCheck, tells InnovationMap. "We were pretty much bursting at the seams in our old office." Click here to continue reading.

Houston startup raises $30M, plans to be 'next iconic chemical company' with plant-based alternatives

Solugen, which uses plant-centered biotechnology to produce environmentally friendly chemicals, has raised an additional $30 million and is speculated to soon reach unicorn status. Photo via solugentech.com

While Forbes recently anointed Houston-based Solugen Inc. as one of the next billion-dollar "unicorns" in the startup world, Dr. Gaurab Chakrabarti shrugs off the unicorn buzz.

Chakrabarti, a physician and scientist who's co-founder and CEO of the startup, concedes he doesn't know whether Solugen will be worth $1 billion or not. But he does know that the startup aspires to be a key competitor in the emerging "climate tech" sector, whose players strive to combat climate change. Chakrabarti estimates the climate-tech chemical space alone represents a global market opportunity valued at $1 trillion to $2 trillion per year.

Solugen's overarching goal in the climate-tech market: Replace petroleum-based chemicals with plant-based substitutes.

"I'd love it if we were the poster child that drives climate tech to be the next big, sexy trend," Chakrabarti says.

Chakrabarti acknowledges Solugen's investors, executives, and employees hope the startup succeeds financially. But success, he believes, goes beyond making money and plotting an exit strategy. Instead, Chakrabarti emphasizes "a shift in thinking" on climate tech that he says promises to transform the fledgling sector into a "true niche" that'll be "good for everyone." Click here to continue reading.

Houston mobile vet company plans to roll out services statewide

A Houston vet has seen growth in business for her mobile vet company due to the pandemic. Now, she's planning major growth. Photo courtesy of Rollin' Vets

It's safe to say that the real winners of work-from-home trends that sparked due to the pandemic are our pets. Dogs and cats that were used to not seeing their owners for eight hours every work day now have 24-hour access to attention, treats, and ear scratches.

This increased attention pets are getting from their owners has also meant an increased awareness of pet health, says Katie Eick, founder of Houston-based Rollin' Vets, a startup that has mobilized veterinary services.

"People are home and observing their animals more. They're seeing and recognizing things they might not have if they were at work all day," Eick says.

That's, of course, not the only way the pandemic has affected business for Eick. She founded her company in 2016 and was seeing steady growth as delivery and on-demand services like Uber, DoorDash, etc. increased in use and awareness. Click here to continue reading.

With fresh funds, this Houston entrepreneur plans to scale his industrial e-commerce startup

Tim Neal, CEO of Houston-based GoExpedi, shares how his company plans to scale following its recent series C closing. Photo by Colt Melrose for GoExpedi

Consumers are getting more and more used to picking up their laptops or phones and ordering everyday items in just a few clicks or taps — and seeing those items delivered in just a few days. To Tim Neal, CEO of Houston-based GoExpedi, ordering parts and tools for industrial businesses should be just as easy.

GoExpedi, which just closed a $25 million series C round, has seen rising demand for its e-commerce platform focused on industrial orders, and Neal credits this demand on a change in mindset within the industrial sector. Additionally, he says he's seen clients more and more focused on cutting costs.

Neal shared his company's plans for growth and scale, as well as how fundraising during a pandemic went, in an interview with InnovationMap. Click here to continue reading.

Family-owned composting startup redesigns how Houston disposes of waste

A Houston-area family has made it their business to help Houstonians reduce waste in a convenient, sustainable way. Photo courtesy of Happy Earth Compost

Jesse Stowers has always strived to do his part for the environment. From recycling and making eco-conscious choices, the Stowers were doing everything right, but was it enough?

The family of five was throwing away two trash bags of waste a day that would later end up in landfills until Stowers stumbled on composting as a solution. In May, he launched Happy Earth Compost, a company set on making Houston more sustainable.

If you're unfamiliar with composting, get ready for a crash course. Composting is a sustainable method of decomposing organic solid wastes and turning that waste into compost, a substance that helps plants grow. Food scraps and household items like rice, pasta, meat, poultry, fish, vegetables, fruits, coffee grounds, spoiled food, and tea bags are just a few of the many things that can be composted rather than thrown away.

"Your food waste and compostable waste is anywhere from 25 to 50 percent depending on the family," explains Stowers. According to Happy Earth Compost, one human creates an estimated 1,642 pounds of trash each year. Click here to continue reading.

Houston virtual reality company collaborates with space health organization

Houston-based Z3VR has been granted $500,000 to work or virtual reality applications in space. Photo courtesy of Z3VR

Houston-based startup Z3VR received a $500,000 grant from Baylor College of Medicine's Translational Research Institute for Space Health, or TRISH, last month to continue exploring how the wide world of virtual reality can boost mental and physical health for astronauts on a mission to Mars.

Founded in 2017 by a group of emerging tech enthusiasts, Z3VR discovered its niche in what CEO Josh Ruben calls the "intersection of biosensors and VR" and began consulting with TRISH in 2018. Last year, the company received its first funding from the institution to create virtual reality platforms that promote exercise and provide additional sensory experiences for isolated Mars-bound astronauts.

This new grant, however, takes Z3VR's mission one step farther. The year-long grant will allow Z3VR, in partnership with NASA labs in California and Houston, to further develop their VR platform to use eye movement tracking to identify cognitive, psychiatric, or ophthalmological issues before they arise.

Getting out ahead of issues is more important than ever on the Mission to Mars. Because of the duration and distance of the mission, these astronauts will be uniquely isolated and will face a communication lag of up to 45 minutes between space shuttle and command center.

"What that means from a health care perspective is that pretty much everything you need to treat and diagnose these astronauts needs to be self contained on the spacecraft itself," Ruben says. "The system that we are building is sensitive enough to pick up on these cognitive, ophthalmological, and psychiatric conditions well before they become clinically relevant. It'll be long before the astronaut knows there's a problem. That's the hope." Click here to continue reading.

Houston startup — buoyed by Halliburton — plans to scale

Houston-based Nanotech was the first company to be selected for Halliburton Labs, a recently announced startup incubator. Photo via halliburtonlabs.com

A Houston-based material science startup that uses nanotechnology for thermal insulation and fireproofing has been chosen as the first participant of Halliburton Labs, an innovation incubator, announced late last month by the oil and gas giant.

Halliburton Company chose Nanotech Inc., among a round of contenders to be the first participant of their 12-month program located at their Houston headquarters. Halliburton will provide Nanotech with its own office space, access to Halliburton facilities, technical expertise, and an extensive network to accelerate their product to market.

"With Nanotech's shield material we can have fireproofing infrastructure, saving lives and helping save the planet," says Mike Francis, CEO of Nanotech. "But it's tremendously difficult to scale our small lab to take our product globally, so when we heard about this opportunity with Halliburton Labs, we jumped immediately on it."

Nanotech Inc., started with a singular technology and a simple mission to fireproof the world and reduce energy consumption globally. The base nano shield, flex shield, and forged shield products contain nanoparticles ranging from 1 micrometer to 1 nanometer in a water-based solution with other inorganic compounds. The coating is heat resistant, non-flammable, and the nontoxic properties ensure it is sustainable for the environment. Click here to continue reading.Click here to continue reading.

This Houston tech startup is helping businesses find the funds during COVID-19 crisis and beyond

Houston startup Grant Source, which helps its clients find the right grants to apply for, has seen a surge in business amid the coronavirus shutdown. Getty Images

Since 2015, Grant Source has perfected the art of helping businesses, foundations, and organizations find and secure grant funding — and now their expertise has become vital to COVID-19 response initiatives.

With the devastation caused by the novel coronavirus, America's medical organizations have been scrambling to obtain the funds required to purchase the testing kits, masks, PPE, and other life-saving products needed to help curb the effects of the global pandemic and now, thanks to the mobile and web platform, they're getting the assistance they need to accomplish that goal.

"COVID-19 response is actually our claim to fame right now," says Allen Thornton, founder and CEO of Grant Source. "We have probably done more business in the last few months than we have since we started. Simply because we are helping people find grants with the CARES Act. There's over $500 billion out there, which has created overnight a $40 billion market opportunity for us."

Grant Source has worked extensively with city, county, state, and government agencies to secure grant funding, which is why they have become a game changer for those that need emergency capital to combat COVID-19's challenges. Click here to continue reading.

Houston energy tech startup raises $11M to grow its team locally

Houston-based Datagration Solutions Inc. has raised millions in its latest round — led partially by a local VC firm — to grow its local presence. Photo via Datagration Solutions/Facebook

An $11 million round of funding will fuel national and international growth at Houston-based Datagration Solutions Inc., whose cloud-based software aggregates data to improve workflows and analytics at upstream oil and gas operators.

Houston-based venture capital firm Quantum Energy Partners LLC and New York City-based venture capital firm Global Reserve Group LLC led the round. Datagration represents the sixth investment in energy tech involving the duo of Quantum Energy Partners and Global Reserve Group.

Braxton Huggins, chief marketing officer at Datagration, says the new capital will enable the company to build a technology team in Houston; add to its operations, sales, and marketing team in Houston; and supplement its development team in Austria. These new hires will help Datagration expand its national and international market presence, he says.

Huggins says Datagration aims to more than double in size by the end of 2021. The startup currently employs more than 30 people. Click here to continue reading.

Houston startup uses artificial intelligence to bring its clients better business forecasting calculations

Houston-based Complete Intelligence was just recognized by Capital Factory as the "Newcomer of the Year." Photo via completeintel.com

The business applications of artificial intelligence are boundless. Tony Nash realized AI's potential in an underserved niche.

His startup, Complete Intelligence, uses AI to focus on decision support, which looks at the data and behavior of costs and prices within a global ecosystem in a global environment to help top-tier companies make better business decisions.

"The problem that were solving is companies don't predict their costs and revenues very well," says Nash, the CEO and founder of Complete Intelligence. "There are really high error rates in company costs and revenue forecasts and so what we've done is built a globally integrated artificial intelligence platform that can help people predict their costs and their revenues with a very low error rate."

Founded in 2015, Complete Intelligence is an AI platform that forecasts assets and allows evaluation of currencies, commodities, equity indices and economics. The Woodlands-based company also does advanced procurement and revenue for corporate clients.

"We've spent a couple years building this," says Nash. "We have a platform that is helping clients with planning, finance, procurement and sales and a host of other things. We are forecasting equity markets; we are forecasting commodity prices, currencies, economics and trades. We built a model of the global economy and transactions across the global economy, so it's a very large, very detailed artificial intelligence platform."

That platform, CI Futures, has streamlined comprehensive price forecasting and data analysis, allowing for sound, data-based decisions.

"Our products are pretty simple," says Nash. "We have our basic off the shelf forecast which is called CI Futures, which is currencies, commodities, equities and economics and trade. Its basic raw data forecasts. We distribute that raw data on our website and other data distribution websites. We also have a product called Cost Flow, which is our procurement forecasting engine, where we build a material level forecasting for clients." Click here to continue reading.

This week's innovators to know are focused on using artificial intelligence in data management, banking for startups, and 5G awareness in Houston. Courtesy photos

3 Houston innovators to know this week

Who's who

This year, Houston's innovation ecosystem is set to change tenfold — from the rise of 5G to burgeoning startup and entrepreneurial hubs emerging across town.

Today's featured innovators know a bit about these movements — from an entrepreneur using artificial intelligence in data management for his clients to a banking exec who went all-in on startups.

Tony Nash, founder and CEO of Complete Intelligence

tony nash

Courtesy of Complete Intelligence

Every company wishes they have a crystal ball when it comes to making business decisions, and while a physical iteration of that wish isn't possible, Tony Nash has developed the next best thing for his clients at his startup, Complete Intelligence.

Founded in 2015, Complete Intelligence is an AI platform that forecasts assets and allows evaluation of currencies, commodities, equity indices and economics. The Woodlands-based company also does advanced procurement and revenue for corporate clients.

"We've spent a couple years building this," says Nash in a recent InnovationMap interview. "We have a platform that is helping clients with planning, finance, procurement and sales and a host of other things. ... We built a model of the global economy and transactions across the global economy, so it's a very large, very detailed artificial intelligence platform." Read more.

Brian Richards, Houston innovation hub director at Accenture and board member at Houston Exponential

brian richards

Courtesy of Accenture

The rise of 5G in Houston feels familiar to Brian Richards. He writes in a recent guest column that the development of the technology is similar to the moment in Houston's history when NASA landed a man on the moon.

There are a few similarities Richards expresses in his article, as well as providing more information about 5G itself, but the undeniable fact is 5G will create a lasting impact in Houston.

"Above all, as Houston continues to race toward building a world-class innovation ecosystem and a sustainable, thriving economy, we simply can't take our foot off the gas in the 5G race — much like the moon race," he writes. "It's an imperative that the region continue to lead in 5G network adoption and that our local industries and businesses envision, plan and develop new ways of working." Read more.

Jimmy Allen, executive vice president and chief operating officer of Texas Citizens Bank

jimmy allen

Courtesy of Texas Citizens Bank

It's become a bit of a trend to see banks taking a bet on startups — Capital One, for instance, has even entered the coworking industry itself. And one Houston-area bank has become an early adopter of this trend locally.

Jimmy Allen, executive vice president and chief operating officer of Texas Citizens Bank, says the bank's new 3,900-square-foot location — its seventh branch in the Houston area — fits perfectly within The Cannon's 120,000-square-foot building in West Houston, which Texas Citizens helped build. The branch opened in December 2019; the grand opening is planned for January 2020.

"Owner-operated businesses are both the genesis of our business model and [a] key customer segment served," says Allen, who was named to his position in November. "A subset of that group certainly includes young, relatively new companies, which favor the current trend in coworking or live-work-play communities." Read more.

Houston-based Complete Intelligence was just recognized by Capital Factory as the "Newcomer of the Year." Photo via completeintel.com

Houston startup uses artificial intelligence to bring its clients better business forecasting calculations

AI on the mind

The business applications of artificial intelligence are boundless. Tony Nash realized AI's potential in an underserved niche.

His startup, Complete Intelligence, uses AI to focus on decision support, which looks at the data and behavior of costs and prices within a global ecosystem in a global environment to help top-tier companies make better business decisions.

"The problem that were solving is companies don't predict their costs and revenues very well," says Nash, the CEO and founder of Complete Intelligence. "There are really high error rates in company costs and revenue forecasts and so what we've done is built a globally integrated artificial intelligence platform that can help people predict their costs and their revenues with a very low error rate."

Founded in 2015, Complete Intelligence is an AI platform that forecasts assets and allows evaluation of currencies, commodities, equity indices and economics. The Woodlands-based company also does advanced procurement and revenue for corporate clients.

"We've spent a couple years building this," says Nash. "We have a platform that is helping clients with planning, finance, procurement and sales and a host of other things. We are forecasting equity markets; we are forecasting commodity prices, currencies, economics and trades. We built a model of the global economy and transactions across the global economy, so it's a very large, very detailed artificial intelligence platform."

That platform, CI Futures, has streamlined comprehensive price forecasting and data analysis, allowing for sound, data-based decisions.

"Our products are pretty simple," says Nash. "We have our basic off the shelf forecast which is called CI Futures, which is currencies, commodities, equities and economics and trade. Its basic raw data forecasts. We distribute that raw data on our website and other data distribution websites. We also have a product called Cost Flow, which is our procurement forecasting engine, where we build a material level forecasting for clients.


completeintel.com

"Then we have a product that we'll launch next year called Revenue Flow, which is a sales forecasting tool that will use balance of both client data and publicly available data to forecast client sales by product, by geography and so on and so forth. So we really only do three things: revenues, costs and raw data forecasts."

Forecasting across industries

Complete Intelligence's Cost Flow and Revenue Flow products are specific to direct clients. They are working with clients in the food and beverage sector, the energy sector, the chemical sector, and the technology sector.

"Anybody that manufactures a tangible good, should use our product," says Nash. "Because we can take their historical data we can configure their bills of material and they can see the exact cost and exact revenue of those products by month over time."

CI is not a consulting firm, so they offer their clients an annual license, which allows them to receive updated forecasts every month to understand how markets will iterate over time.

"We're integrating with the client's enterprise data," says Nash. "Whether it's their ERP system or their procurement system or their CRM, we're integrating with client's enterprise data, and we're creating forecast outlooks that are perfectly contextually relevant for client buying decisions."

Called out by Capital Factory

As a business solution, CI has garnered widespread industry confidence and accolades, such as Capital Factory's coveted "Newcomer of the Year" award, which recognizes innovative companies from a pool of 110 startups in Texas.

"Honestly, I couldn't believe it because with a startup like ours, there's so much hard work that goes into it, there's so much time, there's so much persistence," says Nash.

"And the types of startups that Capital Factory attracts are very competitive startups, so for us to receive this award, it's given us a huge amount of credibility in the market and it's really encouraged the team inside the company to understand that what we're doing is being recognized, it's meaningful and we're really going places."

From consulting to billions of monthly calculations

Nash is no stranger to going places. Before setting up shop in his native Texas, he lived in Singapore for 15 years where he started his career in sourcing and procurement for American retail firms.

"I became very sensitive to costs, cost inflections and I got very involved in global sourcing and international trade and then I did a couple of corporate turnarounds and start ups and so with that you see costs as an issue with those types of firms," Nash says.

He then worked with the Economist running their global research business. There, he grew familiar with how clients and customers use data. At IHS Markit, a global information provider.

"When I was working with those firms, those firms helped companies with planning," says Nash. "The problem is that those firms have very large errors in their forecasts. It is not just the internal forecasts that have a 30 percent or higher error rate in their forecasts, even the industry forecasters typically have around a 20 percent error rates in their forecasts.

"Even the people who should actually know where prices are going are not very good forecasters. With Complete Intelligence, we wanted to use data and use artificial intelligence to machine learning to create a better way to identify where costs and revenues will go for companies."

Every month, CI runs billions of calculations. They test their error rates and record them for clients that request them. With 700 assets that they show publicly, CI their average error rate is 3.7 percent, which is dramatically lower than both corporate procurement professionals and industry experts.

"With us doing billions of calculations, it allows us to run simulations and scenarios that your average analyst just can't do and most companies haven't even thought of. We're able to run a comprehensive view of activities in the world to understand how things directly and indirectly affect a cost. In Houston, for example, that could be crude oil or natural gas or something like that."

Proving its value

Last year, the company tested its platform with a natural gas trader. After reviewing the data, CI revealed to the client that natural gas would fall by 40 percent over the next year.

"They looked at our forecast and said they couldn't work with us because it didn't make sense," says Nash. "A 40 percent fall didn't make sense, so they didn't subscribe to us. That was 2018. What has happened over the past 12 months? Natural gas prices had fallen by 49 percent. You would look at our forecasts and say, 'Wow, that's a dramatic drop over 12 months.' But reality was even more dramatic than that and there weren't analysts out there saying what our model was telling us."

That natural gas trading company never admitted its faux pas, but if they had listened to CI, they could have positioned themselves to negotiate their vendors down for their cost base, which helps the margin of their business.

"Nobody ever admits mistakes," says Nash. "But when you think about the numerous materials that require natural gas, especially things that are manufactured in Houston, it affects a lot of costs."

Houston roots — by way of Asia

The missed opportunity with the natural gas trader notwithstanding, Nash is happy that he brought Complete Intelligence to Houston.

"I went to Texas A&M and grew up in Texas, so I moved back to Texas knowing how good Americans are with planning, with math and with data. I like Houston because people make stuff in Houston," Nash says. "We just found Houston to be perfect after spending 15 years in Asia given the global centrality of Houston. The industry's here and there's a lot of diversity in Houston."

Nash's expectation was that he would be able to work with Western multinationals to improve their analytics and their artificial intelligence processes because he has learned that there is a lot of pressure in American financial markets and analysts communities to really know what is happening within companies.

"We want companies to be able to really tightly plan their costs so they can better improve their profitability," says Nash. "That's what I wanted to do when we moved to the U.S. and we're finding that there's a lot of interest from companies."

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Houston-based equitable entrepreneurship tech platform expands programs

coming soon

Fresh off of celebrating the dismissal of a lawsuit from former Trump Administration officials, Hello Alice is expanding some of its offerings for entrepreneurs.

In partnership with top organizations — like Progressive, Antares Capital, Wells Fargo, and FedEx — Hello Alice has added new offerings for its 2024 Boost Camp programs, a mix of skill-building support and grant opportunities.

“We are fortunate to continue working with great enterprise partners who share our commitment to supporting Main Street through crucial grants and mentorship programs,” Carolyn Rodz, CEO and co-founder of Hello Alice, says in a news release. “Small businesses drive our economy, yet often lack the necessary financing and resources. By partnering with major companies, Hello Alice is ensuring that small businesses have access to the tools and opportunities they need to thrive and create jobs in their local communities. Together, we are building a robust support system that fosters innovation and growth for small businesses across the country.”

This year's programs, according to Hello Alice, are as follows:

  • Antares Capital REACH Cohort: The Antares REACH Grant Program provides $20,000 grants to small businesses. Grant recipients will also take part in Antares’ Growth Track Boost Camp program, a digital community which will be home to monthly business coaching workshops, mentorship, networking, and more. Applications are open until June 28, and the program begins August 8.
  • Progressive Driving Small Business Forward Grant & Booster Camp Program: Progressive is dedicating $1 million to award 20 deserving businesses with a $50,000 grant each. Grant recipients will be invited to attend an exclusive 12-week virtual Boost Camp coaching program. Applications have closed for the program beginning September 10.
  • Wells Fargo: Wells Fargo is supporting four virtual accelerator programs over the next 18 months, designed to support up to 500 participants for each program, with a focus on business health and credit-building practices. Applications will be announced this summer for the program, which will begin in early fall.
  • FedEx: The FedEx Entrepreneur Fund supports entrepreneurs in the United States by providing them with the necessary funding, resources, and networks to enhance the success of their businesses, including the Boost Camp coaching program.
  • Applications will be announced this fall for the program, which will begin in the winter.

More information and application access is available online.

Last year's Boost programs benefitted 100 small businesses, according to Hello Alice, which reported that the 2023 Antares REACH Cohort resulted in 60 percent of participants seeing an increase in their Business Health Score and 93 percent felt better equipped to confront challenges and capitalize on opportunities. In the end, 85 percent of participants feeling more optimistic about their business growth prospects.

"Hello Alice is proud to partner with high-level enterprise companies to empower small businesses and foster their success," Natalie Diamond, vice president of business development at Hello Alice, adds. "Together, we are creating unparalleled opportunities for entrepreneurs to achieve brand success, drive financial fitness, and thrive in today's competitive market. Our joint endeavors not only offer access to capital and resources but also provide tailored guidance and mentorship, arming small business owners with the insights and support necessary to navigate challenges and seize growth opportunities.”

Houston company's sustainable oil product reaches milestone production capacity 5 years early

overachieving

Houston-based biotech company Cemvita has achieved a key production goal five years ahead of schedule.

Thanks to technology advancements, Cemvita is now capable of generating 500 barrels per day of sustainable oil from carbon waste at its first commercial plant. As a result, Cemvita has quadrupled output at the Houston plant. The company had planned to reach this milestone in 2029.

Cemvita, founded in 2017, says this achievement paves the way for increased production capacity, improved operational efficiency, and an elevated advantage in the sustainable oil market.

“What’s so amazing about synthetic biology is that humans are just scratching the surface of what’s possible,” says Moji Karimi, co-founder and CEO of Cemvita. “Our focus on the first principles has allowed us to design and create new biotech more cheaply and faster than ever before.”

The production achievement follows Cemvita’s recent breakthrough in development of a solvent-free extraction bioprocess.

In 2023, United Airlines agreed to buy up to one billion gallons of sustainable aviation fuel from Cemvita’s first full-scale plant over the course of 20 years.

Cemvita’s investors include the UAV Sustainable Flight Fund, an investment arm of Chicago-based United; Oxy Low Carbon Ventures, an investment arm of Houston-based energy company Occidental Petroleum; and Japanese equipment and machinery manufacturer Mitsubishi Heavy Industries.

Tech disruptions sparked by Texas co.'s update highlight the fragility of globally connected technology

Airlines, banks, hospitals and other risk-averse organizations around the world chose cybersecurity company CrowdStrike to protect their computer systems from hackers and data breaches.

But all it took was one faulty CrowdStrike software update to cause global disruptions Friday that grounded flights, knocked banks and media outlets offline, and disrupted hospitals, retailers and other services.

“This is a function of the very homogenous technology that goes into the backbone of all of our IT infrastructure,” said Gregory Falco, an assistant professor of engineering at Cornell University. “What really causes this mess is that we rely on very few companies, and everybody uses the same folks, so everyone goes down at the same time.”

The trouble with the update issued by CrowdStrike and affecting computers running Microsoft's Windows operating system was not a hacking incident or cyberattack, according to CrowdStrike, which apologized and said a fix was on the way.

But it wasn't an easy fix. It required “boots on the ground” to remediate, said Gartner analyst Eric Grenier.

“The fix is working, it’s just a very manual process and there’s no magic key to unlock it,” Grenier said. “I think that is probably what companies are struggling with the most here.”

While not everyone is a client of CrowdStrike and its platform known as Falcon, it is one of the leading cybersecurity providers, particularly in transportation, healthcare, banking and other sectors that have a lot at stake in keeping their computer systems working.

“They’re usually risk-averse organizations that don’t want something that’s crazy innovative, but that can work and also cover their butts when something goes wrong. That’s what CrowdStrike is,” Falco said. “And they’re looking around at their colleagues in other sectors and saying, ‘Oh, you know, this company also uses that, so I’m gonna need them, too.’”

Worrying about the fragility of a globally connected technology ecosystem is nothing new. It's what drove fears in the 1990s of a technical glitch that could cause chaos at the turn of the millennium.

“This is basically what we were all worried about with Y2K, except it’s actually happened this time,” wrote Australian cybersecurity consultant Troy Hunt on the social platform X.

Across the world Friday, affected computers were showing the “blue screen of death” — a sign that something went wrong with Microsoft's Windows operating system.

But what's different now is “that these companies are even more entrenched,” Falco said. "We like to think that we have a lot of players available. But at the end of the day, the biggest companies use all the same stuff.”

Founded in 2011 and publicly traded since 2019, CrowdStrike describes itself in its annual report to financial regulators as having “reinvented cybersecurity for the cloud era and transformed the way cybersecurity is delivered and experienced by customers.” It emphasizes its use of artificial intelligence in helping to keep pace with adversaries. It reported having 29,000 subscribing customers at the start of the year.

The Austin, Texas-based firm is one of the more visible cybersecurity companies in the world and spends heavily on marketing, including Super Bowl ads. At cybersecurity conferences, it's known for large booths displaying massive action-figure statues representing different state-sponsored hacking groups that CrowdStrike technology promises to defend against.

CrowdStrike CEO George Kurtz is among the most highly compensated in the world, recording more than $230 million in total compensation in the last three years. Kurtz is also a driver for a CrowdStrike-sponsored car racing team.

After his initial statement about the problem was criticized for lack of contrition, Kurtz apologized in a later social media post Friday and on NBC's “Today Show.”

“We understand the gravity of the situation and are deeply sorry for the inconvenience and disruption,” he said on X.

Richard Stiennon, a cybersecurity industry analyst, said this was a historic mistake by CrowdStrike.

“This is easily the worst faux pas, technical faux pas or glitch of any security software provider ever,” said Stiennon, who has tracked the cybersecurity industry for 24 years.

While the problem is an easy technical fix, he said, it’s impact could be long-lasting for some organizations because of the hands-on work needed to fix each affected computer. “It’s really, really difficult to touch millions of machines. And people are on vacation right now, so, you know, the CEO will be coming back from his trip to the Bahamas in a couple of weeks and he won’t be able to use his computers.”

Stiennon said he did not think the outage revealed a bigger problem with the cybersecurity industry or CrowdStrike as a company.

“The markets are going to forgive them, the customers are going to forgive them, and this will blow over,” he said.

Forrester analyst Allie Mellen credited CrowdStrike for clearly telling customers what they need to do to fix the problem. But to restore trust, she said there will need to be a deeper look at what occurred and what changes can be made to prevent it from happening again.

“A lot of this is likely to come down to the testing and software development process and the work that they’ve put into testing these kinds of updates before deployment,” Mellen said. “But until we see the complete retrospective, we won’t know for sure what the failure was.”