Houston expert shares 3 venture capital predictions for 2022

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Blockchain growth and funds reaching new groups of people — this Houston investor has VC trends for 2022. Image via Getty Images

New Year’s resolutions are all well and good, but this year, in true VC fashion, I’m making some New Year’s predictions, too. Though I’m not an oracle, I am an investor, which means I use what I learned in the past to guide my decisions in the present. With that in mind, here are three predictions for 2022.

Blockchain’s gaining ground and will be used to solve some of the world’s toughest problems.

This year, expect to see more corporates adopting blockchain. Blockchain is the digital recordkeeping technology that cryptocurrencies depend on, but its impact goes far beyond powering Bitcoin and giving speculative traders something to do. It allows corporations to do everything from transferring data more securely, to tackling supply chain issues (a problem we became all too familiar with last year), to eradicating the double spending problem in carbon credit markets and helping businesses prove their ESG claims.

When it comes to environmental, social, and governance (ESG) investing, blockchain will be a major part of the solution to a myriad of pressing issues, from climate change to social unrest.

On the environmental front, expect blockchain to be an essential tool in our quest to get to net zero: the technology allows companies to better track and trace their carbon footprint, and will lead to greater accountability across industries. It also has the potential to bring much-needed transparency to the global food supply chain, so that consumers can make informed decisions about the products they’re buying.

So much of the social unrest we are experiencing today is the result of power concentrated in too few hands and the lack of access to financial services. Blockchain is already being used to help the unbanked to improve their credit scores through microloans and to provide farmers with crop insurance. In 2022, blockchain will continue to democratize access to capital and unlock opportunities for retail investors to build wealth on their own terms.

As of last fall, 85 percent of the market cap of digital assets was driven by retail investor interest. In the first half of 2021 we saw a 100 percent increase in crypto users and a 700 percent growth in the DeFi token market cap. And there’s no signs of a slowdown. In December, Visa announced they were launching a “crypto advisory practice” to help their clients understand this next frontier. Visa’s announcement is just one of many announcements from major firms embracing the notion that digital assets will soon be a vital thread in the broader financial ecosystem.

If you let 2021 pass without getting educated on blockchain, 2022 is the time to dive deep.

The tech industry knows entrepreneurs can build from anywhere, and they’re doubling down on geographic diversity.

Until a few years ago, the conventional wisdom was that you couldn’t build a successful startup from anywhere but Silicon Valley. In 2022, entrepreneurs will build — and build successfully — in cities across the country, basing themselves in communities that best align with not only their industries, but their interests.

Rising innovation hubs will succeed based on how well they distinguish themselves from their counterparts. Want to build in a vibrant metropolitan area which is also the most diverse city in America and has built an inclusive startup ecosystem? Join us in Houston. Want to join a thriving ecosystem that is close to nature activities and still (somewhat) affordable? Move to Austin.

Though this geographic diversification started pre-pandemic, COVID-19 sped it up. In 2021, for the first time in more than 10 years, the percentage of seed capital going to Bay Area startups fell under 30 percent. The possibility of building an innovation community anywhere is finally becoming a reality as the pandemic years forced digital adoption and innovative thinking.

The upshot: if you’re a founder looking to lay roots, you can find the soil that’s best for your growth.

For women, Black and Latinx founders, the needle is moving in 2022.

For years now, a few in the tech industry have been working hard to diversify capital allocation, planting seeds aimed at getting more capital into the hands of women, Black and Latinx founders. In 2022, those seeds will sprout.

Two years ago, only 5.6 percent of VC firms in the U.S. were women-led, and of those 73 percent had been founded in the previous five years. But venture is a long game so investing initiatives can take years. When women are writing the checks, they tend to fund more diverse teams, which, in turn, routinely outperform teams with no women or people of color.

The work, in short, is paying off. In 2021, venture firms founded by women were on pace to bring in over 7 billion dollars, nearly one billion dollars over the previous high, from 2019. Expect the trend to continue into this year.

In summary, expect 2022 to be a blockbuster year for blockchain utility, and enjoy the increased capital deployed into previously underrepresented founders living all across America. We’ll check back in 2023 to see how I did.

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Samantha Lewis is principal at Houston-based venture capital firm, Mercury Fund.
Ashley Small, founder and CEO of Medley Inc., joins the Houston Innovators Podcast this week to discuss COVID-19's affect on her business and fostering diversity at startups. Photo courtesy of Medley Inc.

Houston founder calls for business leaders to 'make room for diverse voices'

HOUSTON INNOVATORS PODCAST EPISODE 70

Last year was one of quick pivots and tech solutions for Ashley Small and her company's clients. Small — the CEO and founder of Medley Inc., a Houston-based branding and public relations firm — works with both for-profit and nonprofit entities to tell their stories, and of course 2020 had its challenges in doing so. But they weren't anything Small, her team, and technology couldn't overcome.

Small founded Medley over 12 years ago, and for the past three of those years, her team has been completely virtual. She shares on the Houston Innovators podcast that this give her team a headstart on being able to find and quickly adopt quick tech solutions — but last year's shutdown also meant navigating this for all her clients.

"The biggest obstacle we had to overcome was figuring out what the best technology was for each client," Small says. "Where the learning curve has been is understanding all the available resources out there and understanding how offline experiences can help audiences connect online."

Founded in Houston, Medley has grown to the Los Angeles and Chicago markets over the years — and Small says that was intentional. An Oklahoma native, Small fell in love with Houston's diversity when she attended Texas Southern University, and sought out other diverse markets to expand her business. And, as a Black female founder, she fosters an inclusive community at her company — and wants to remind her fellow business owners how imperative it is to running an innovative company.

"Innovation is actually impossible without diversity," Small says, adding that when you bring different people to the table, you get new ways of thinking. "A part of this is also being really open minded to the fact that you are going to hear ideas that sound and look different. Be open to that, because that is 100 percent the point."

Small knows early-stage companies aren't always able to hire a bunch of people from diverse backgrounds right from the start, but there are other ways to surround yourself with diverse ideas.

"Make room for diverse voices -- and you may have to be a bit creative," Small says.

Medley's team also realizes that not every startup can afford to bring on an in-house or third-party PR team, but the company has a few options for startups, such as a three-month retainer to start as well as a series of workshops available online for as low as $19.

Small discusses more about how she's honoring Black History Month with her team and the evolution the PR and media industries have seen over the past decade on the episode. Listen to the full interview below — or wherever you stream your podcasts — and subscribe for weekly episodes.
The Equity Innovation Center Powered by Reliant will have online resources as well as an interactive learning lab at Tellepsen Family Downtown YMCA. Photo courtesy of Urban Land Institute Houston

YMCA of Greater Houston announces equity-focused innovation center backed by Reliant

it's fun to innovate at the

Houston is the most diverse city in the nation, and the YMCA of Greater Houston is looking to do its part to promote equity innovation by opening a new center.

The Equity Innovation Center Powered by Reliant will be the first of its kind in the region, and it will operate as a space for Houstonians to gather and collaborate.

"The YMCA of Greater Houston vows to stand with our brothers and sisters who are made to feel less safe by the many recent incidents – fighting for health equity in the face of the inequities being laid bare by the COVID-19 pandemic and unjust killings," says Stephen Ives, president and CEO, YMCA of Greater Houston, in a press release. "The Y will continue expanding and strengthening its commitment to combat racism, bias, prejudice and inequalities while fighting for justice."

The center will provide resources and activities so that visitors and collaborators can "walk away with a solid learning or unlearning" of social justice issues that are prominent in both Houston and nationally.

Rolling out in three phases, the project's first step is to foster conversations, consulting, and online trainings regarding systemic racial inequities. The next two phases will include setting up an interactive learning lab at Tellepsen Family Downtown YMCA, which would come to fruition by early next year.

The project is made possible by Reliant, a partner of the YMCA of Greater Houston.

"At Reliant, we respect, recognize and celebrate that our differences shape us, and that diversity and inclusion make us stronger. We're committed to powering change and supporting progress in the places where we live and work," says Elizabeth Killinger, president at Reliant, in the release. "By powering the Equity Innovation Center, we hope to further strengthen Houston so we can harness our full potential and make lasting change for future generations."

Reliant has donated $100,000 to the project, which will be distributed in $50,000 commitments over two years. The sum is a part of Reliant and NRG's "Powering Change" initiative, which has committed $1 million to go to organizations that combat racial inequities, injustice, and related violence, according to the release.

"We are grateful Reliant is joining our efforts to implement lasting and meaningful change within our community and beyond. We know that when we work as one, we move people and communities forward," Ives says.

Stephen Ives (left) is the president and CEO of YMCA of Greater Houston, and Elizabeth Killinger is president of Reiliant. Images courtesy
The Ion has tapped DivInc. as a partner. Courtesy of Rice University

The Ion announces partnership with nonprofit to serve Houston's diverse entrepreneurs

diving into diversity

Houston is ranked the No. 1 diverse city in the nation, and a local organization has forged a new partnership to make sure that diversity is represented within the city's innovation ecosystem.

The Ion, an innovation hub currently rising in Midtown Sears Building, and DivInc, a Texas nonprofit, have agreed to partner to advance diversity among Houston entrepreneurs. It's Austin-based DivInc's first Houston initiative, according to a news release.

"Our experience equipping diverse entrepreneurs with strategies to create exceptional companies, coupled with the Ion's enthusiasm and thoughtful approach to building an inclusive space where entrepreneurs from all walks of life can thrive is a winning combination," says Preston L. James, founder and CEO of DivInc, in the release.

"No matter where they are in their entrepreneur journey, we want all Houstonians to know DivInc is here to help you achieve your biggest dreams."

Since its founding in 2016, DivInc has worked to provide over 60 founders and more than 50 tech companies with resources and support for growth. Locally, DivInc is already working on programming to extend its reach to Houston entrepreneurs, including a kick-off event at The Ion on Tuesday, March 3, at 5:30 pm.

"As The Ion looked for a partner to provide best practices and resources to our local business communities and leaders that have historically been overlooked, we knew our partner needed to be ambitious, thoughtful and encouraging, but also have a record of success and experience working shoulder-to-shoulder with entrepreneurs," says Deanea LeFlore, senior director of The Ion, in the release.

"Our efforts and relationship with DivInc will do just that. We can't wait to help our stakeholders take their businesses to new heights and further demonstrate Houston is the best city in America for diverse entrepreneurs to thrive."
A new study ranks Houston as the country's 10th most ethnically diverse large city. Getty Images

Houston named a top 10 big city for ethnic diversity by new study

BAYOU CITY BRAGGING RIGHTS

Houston prides itself on its diversity — and rightfully so. A new study ranks Houston as the country's 10th most ethnically diverse large city.

Among 501 U.S. cities, Houston also ranks 28th overall and first in Texas, according to the study, released February 11 by personal finance website WalletHub.

To come up its ranking, WalletHub measured three key indicators of ethnic diversity: language, ethnicity and race, and birthplace. Houston ranks 25th for language diversity, 36th for ethnic and racial diversity, and 244th for birthplace diversity.

This finding differs from a study by Rice University's Kinder Institute for Urban Research that found Houston was the most ethnically and racially diverse metro area in the U.S. as of 2010. Why the disparity? The WalletHub study looked at data for the city of Houston, while the Kinder Institute study examined data for the entire Houston metro area.

The new finding also differs from a broader WalletHub study published in April 2019. In that study, Houston was crowned the most diverse city in the U.S., based on socioeconomic, cultural, economic, household, and religious diversity. Ethnic diversity is only one component of that ranking.

"Houston is the most diverse city in the United States. But diversity alone is not enough — we must always strive to be more inclusive," Houston Mayor Sylvester Turner tweeted in December 2019. "As your mayor, I know that diversity and inclusivity are what makes us strong. And I will always work to build one complete Houston."

However you slice it, Houston leads the pack in Texas for ethnic and racial diversity. Here's how other major cities in the Lone Star State fare in the new WalletHub study:

  • Arlington, No. 38
  • Plano, No. 46
  • Dallas, No. 47
  • Fort Worth, No. 62
  • Austin, No. 73
  • San Antonio, No. 136

While Austin and cities in the Dallas-Fort Worth area don't rank particularly high in the WalletHub study, Austin and DFW do show up on a recent list of the country's most racially diverse metro areas.

DFW held the No. 11 spot in the Bloomberg news service's 2018 ranking of racial diversity among the 100 largest U.S. metros, while Austin stood at No. 19. Houston bested both of those areas, though, landing at No. 5.

Austin and Dallas didn't perform as well in a racial and ethnic index compiled by U.S. News & World Report.

The index shows the racial and ethnic diversity of Dallas actually slipped 3.4 percent from 2010 to 2018, with Austin's diversity declining by 0.10 percent. The decrease was 2.6 percent in San Antonio and 1.2 percent in Houston, the index shows.

The diversity picture was brighter in other Texas cities included in the U.S. New & World Report index, which measured racial and ethnic diversity in U.S. cities with at least 300,000 residents. Arlington saw its racial and ethnic diversity rise 3.6 percent from 2010 to 2018, with Fort Worth at 1.8 percent.

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This article originally ran on CultureMap.
Houston-based Work & Mother is rethinking how new mothers pump in the office. Courtesy of Work & Mother

This growing Houston company is revolutionizing the way new mothers pump in the office

Pump it up

A new mom returning to work is probably dreading her new daily inconvenience of taking the time out of the workday to pump her breast milk.

While some employers provide a wellness room to us, but the more likely scenario is that she will have to pump in your car, an empty conference room or the bathroom. And once she is done pumping, she'll have to wash her equipment in the kitchen sink, alongside her coworkers' coffee mugs or dirty Tupperware containers.

One newly launched company mission is to make that scenario a thing of the past.

Work & Mother is a boutique pumping and wellness center that opened its first location in downtown Houston in 2017 and is planning its second downtown location. The 600-square-foot space opened on the first floor of 712 Main St. and offers memberships to companies and individuals, regardless of whether they work in the building.

Abbey Donnell founded the company after speaking with friends who recently returned to work after giving birth.

"There were constant stories about [women] being told the use the IT closet, or the conference room, or the bathroom or their cars," Donnell says. "Some of them were pretty big oil and gas firms companies that should've had the resources and space to do better than that."

Work & Mother offers its members several private pumping rooms, private pumping office spaces, a kitchen area, member lockers and a small retail section where members can buy pumping and wellness equipment. The company's pitch to individual mothers is simple: come to us for privacy and community. But its pitch to companies is more rooted in regulations.

Per the Fair Labor Standards Act Section 7(r), companies with 50 or more employees are required to provide "a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public, which may be used by an employee to express breast milk." Companies that aren't in compliance with Section 7(r) — and lack the resources to do so — can either purchase individual or company memberships to Work & Mother.

"The reception from moms has been incredible," Donnell says. "I've gotten a lot of support from women who are older in their fields, who talk about how [pumping in the office] was a horrible experience for them."

Work & Mother is planning its second location, which will also be in downtown Houston, but Donnell declined to share additional details. When she started the company in 2017, she took minimal investments from friends and family, she says. But in anticipation of the company's second location, Work & Mother will likely launch a pre-seed fundraising round this summer, Donnell says. No financial figures have been finalized, but Donnell says the tentative plan is to raise roughly $1 million.

The company is also hoping to open in cities such as Chicago, New York, Austin, and Dallas in the near future.

Work & Mother isn't targeting companies that are solely concerned about meeting Section 7(r) compliance, Donnell says. Rather, she's hoping to show companies that investing in the well-being of new mothers is essential to running a successful business – and it's the right thing to do.

"If there's an employer who really only cares about the compliance, then they're not exactly a good fit, because they'll convert a closet and check that box," Donnell says.

But what Donnell says she's found refreshing is that most of the companies she's interacted with have had great feedback for her. They're trying to recruit — and retain — top female talent, she says.

More soon

Courtesy of Work & Mother

Donnell has plans for a second Houston location, as well as an expansion to other major United States cities.

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Space City News: Houston Spaceport receives grant, unicorn hires architecture firm

rocketing roundup

The Space City is starting 2022 off strong with news launching out of the Houston Spaceport — a TK-acre space in TK Houston.

The two big headlines include a unicorn company releasing the latest details of its earthbound project and fresh funds from the state to support the space ecosystem in Texas.

Governor Abbott doles out $10M in spaceport grants

Texas has launched fresh funding into two spaceport projects. Image via fly2houston.com

Last week, Gov. Greg Abbott announced $10 million in funding to two Texas spaceports as a part of the state's Spaceport Trust Fund. The Houston Spaceport Development Corp. received $5 million and the Cameron County Spaceport Development Corp. received $5 million.

The fund is administered by the Governor's Office of Economic Development and Tourism and was created to support the development of spaceport infrastructure, create quality jobs, and attract continuing investments that will strengthen the economic future of the state, according to a news release.

"For decades, Texas has been a trailblazer in space technology and we are proud to help cultivate more innovation and development in this growing industry in Cameron and Harris County," says Abbott in the release. "This investment in the Cameron County and Houston Spaceport Development Corporations will create even more economic opportunities for Texans across the state and continue our legacy as a leader in space technology."

Axiom Space hires Dallas-based architecture and engineering firm

Axiom Space has made progress on developing its 14-acre headquarters. Image via axiomspace.com

Houston-based unicorn Axiom Space has announced that it awarded Dallas-based Jacobs the architecture and engineering phase one design contract. The firm will be working on the 100,000-square-foot facility planned for the 400-acre Houston Spaceport at Ellington Airport.

Axiom Space's plans are ro build the first commercial space station that will provide a central hub for research, to support microgravity experiments, manufacturing, and commerce in low Earth orbit missions, according to a news release.

"This is an exciting and historic moment for Axiom and the greater Houston area," says Axiom CTO Matt Ondler in the release. "For the first time, spacecraft will be built and outfitted right here in Houston, Texas. This facility will provide us with the infrastructure necessary to scale up operations and bring more aerospace jobs to the area. With this new facility, we are not only building next generation spacecraft, but also solidifying Houston as the U.S. commercial industry's gateway to space."

Axiom Space, which raised $130M in venture capital last year, is building out its 14-acre headquarters to accommodate the creation of more than 1,000 high-paying jobs, from engineers to scientists, mathematicians, and machinists.

"Houston is a city built on innovation and is becoming a next-generation tech hub in the United States," says Ron Williams, senior vice president at Jacobs. "Privately funded infrastructure will drive U.S. leadership in space. Jacobs is committed to providing integrated solutions to accelerate the future of commercial space operations."

Houston food charity scores prestigious Amazon tech grant

high tech gift

One of Houston’s most cherished food charities has been recognized for its tech prowess. Houston Food Bank has been awarded the Amazon Web Services (AWS) Imagine Grant.

The endowment honors “the vision and work of nonprofit organizations as they seek to improve their communities and the world with the help of cloud technology,” per a press release.

Specifically, the food bank was recognized in the Go Further, Faster category for the launching of a cloud-native digital logistics platform to better serve vulnerable populations facing food insecurity (that insecurity was greatly exacerbated by the COVID-19 pandemic, the food bank notes.

Each winner in this category receives up to $150,000 in unrestricted funding, up to $100,000 in AWS Promotional Credit, and essential engagement with AWS technical specialists.

The challenges of COVID and the pandemic forced the food bank to get creative — and it responded. The food bank began delivering meals in March 2020 as part of its COVID-19 response through partnerships with volunteers, staff, corporate donors, and organizations such as CrowdSource Rescue, Task Rabbit, and Amazon.

This pilot has been a success: to date, more than 2.3 million meals have been delivered to those in need, the food bank notes in press materials.

Tech-wise, the food bank’s Home Delivery Platform operates using a cloud-native serverless architecture which includes heavy use of AWS services (AWS Lambda, Amazon DynamoDB, Amazon API Gateway, AWS Amplify, and more), with a mobile web responsive front-end written in React/Typescript.

The client side is split across four responsive web applications, each with a different function: Home Delivery management, pantry management, client orders, and driver deliveries. All of these apps utilize shared components and APIs that communicate with each other based on the different user personas.

Pariveda Solutions serves as the technology partner for the implementation of this platform. The project is a capability expansion on top of an existing manual process to deliver food to clients.

Houston Food Bank applied for the Imagine Grant in order to enhance their process digitally, connect submitted orders to the client’s nearest pantry, and manage delivery operations more effectively, with an emphasis on time management and delivery logistics, the organization notes in a release.

“With the success of our home delivery operations, Houston Food Bank’s goal now is to scale operations to expand home delivery for greater reach and impact,” said HFB president/CEO Brian Greene in a statement. “Additionally, with the proposed improvements, we hope to shift to utilizing volunteers for this important service instead of third-party delivery providers, and to deliver food using the client choice model, where clients may select foods based on personal preference, cultural and dietary needs. We are thankful to AWS and Pariveda Solutions for providing their support and expertise as we continue to find new ways to solve the age-old problem of hunger and work towards our ultimate vision of a world that no longer needs food banks.”

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This article originally ran on CultureMap.

New Ion exec focuses on building density, bridging the gaps within Houston innovation

houston innovator podcast episode 117

After years of being in the works, The Ion Houston opened last year — but not in the way it was always hoping to. With the COVID-19 pandemic, the 300,000-square-foot space in the renovated historic Sears building in Midtown slowly opened its doors to the Houston innovation community and brought back in-person programming as safely as it could.

Despite the challenges the pandemic posed, The Ion, which is owned and operated by Rice Management Company, had a lot to show for 2021 — 95 events on and offline, new coworking space opened, corporate partners built out their offices, and more. And, among the additions to The Ion, was Joey Sanchez, who previously served as director of corporate engagement at Houston Exponential. Sanchez has been in his new role as senior director of ecosystem at The Ion for about three months now.

"I'm focusing specifically on the communities of entrepreneurs, startups, investors — and trying to bridge connections among them," Sanchez says on the Houston Innovators Podcast. "This is the biggest challenge in Houston and we want to flip that with density. Density is really the key to solving connections."

Sanchez says The Ion, and the surrounding Innovation District, is building out to be that convening space for this density of innovation and tech activity.

This month, The Ion is set to deliver on a few of the amenities that have been in the works. First, the investor studio, a place for venture capital investors to meet with local businesses, will open next week. Later this month a high-tech prototyping lab will be unveiled as well as Common Bond, which Sanchez describes as a must-visit coffee shop for Houston's innovators.

"That's going to be the hottest coffee shop in Houston to run into a co-founder, tech talent, an investor — it really is exciting," Sanchez says. "Bridging these connections has been made easier now that I have a home that's as large as this."

Sanchez is familiar with connecting over coffee. He launched a weekly coffee meet up for Houston innovators. He hosts Cup of Joey every Friday morning at Finn Hall in downtown Houston to give everyone in Houston — new or old to the tech ecosystem — a chance to connect. He says he's excited to keep this up throughout 2022 too.

As for taking initial steps into Houston innovation, Sanchez advises attending any of the 400 to 500 events — virtual and in person — that happen in Houston.

"Just show up," Sanchez says. "It's so underrated, and through a pandemic it was obviously tough to do, but just showing up is the first step."

Sanchez shares more about what gets him so excited about Houston innovation on the show. Listen to the full interview below — or wherever you stream your podcasts — and subscribe for weekly episodes



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