Houston investor on SaaS investing and cracking product-market fit

Houston innovators podcast episode 230

Aziz Gilani, managing director at Mercury, joins the Houston Innovators Podcast. Photo via LinkedIn

Aziz Gilani's career in tech dates back to when he'd ride his bike from Clear Lake High School to a local tech organization that was digitizing manuals from mission control. After years working on every side of the equation of software technology, he's in the driver's seat at a local venture capital firm deploying funding into innovative software businesses.

As managing director at Mercury, the firm he's been at since 2008, Gilani looks for promising startups within the software-as-a-service space — everything from cloud computing and data science and beyond.

"Once a year at Mercury, we sit down with our partners and talk about the next investment cycle and the focuses we have for what makes companies stand out," Gilani says on the Houston Innovators Podcast. "The current software investment cycle is very focused on companies that have truly achieved product-market fit and are showing large customer adoption."



An example of this type of company is Houston-based RepeatMD, which raised a $50 million series A round last November. Mercury's Fund V, which closed at an oversubscribed $160 million, contributed to RepeatMD's round.

"While looking at that investment, it really made me re-calibrate a lot of my thoughts in terms what product-market fit meant," Gilani says. "At RepeatMD, we had customers that were so eager for the service that they were literally buying into products while we were still making them."

Gilani says he's focused on finding more of these high-growth companies to add to Mercury's portfolio amidst what, admittedly, has been a tough time for venture capital. But 2024 has been looking better for those fundraising.

"We've some potential for improvement," Gilani says. "But overall, the environment is constrained, interest rates haven't budged, and we've seen some potential for IPO activity."

Gilani shares more insight into his investment thesis, what areas of tech he's been focused on recently, and how Houston has developed as an ecosystem on the podcast.

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Originally expected to raise $150 million, Mercury's latest fund is the largest raised to date. Photo via mercuryfund.com

Houston-based VC secures oversubscribed $160M fund for early-stage startups

show me the money

A Houston venture capital firm has announce big news of its latest fund.

Mercury, founded in 2005 to invest in startups not based in major tech hubs on either coast, closed its latest fund, Mercury Fund V, at an oversubscribed amount of $160 million. Originally expected to raise $150 million, Fund V is the largest fund Mercury has raised to date.

“We are pleased by the substantial support we received for Fund V from both new and existing investors and thank them for placing their confidence in Mercury,” Blair Garrou, co-founder and managing director of Mercury Fund, says in a news release. “Their support is testament to the strength of our team, proven investment strategy, and the compelling opportunities for innovation that exist in cities across America.”

The fund's limited partners include new and existing investors, including endowments at universities, foundations, and family offices. Mercury reports that several of these LPs are based in the central region of the United States where Mercury invests. California law firm Gunderson Dettmer was the fund formation counsel for Mercury.

Fresh closed, Fund V has already made investments in several companies, including:

  • Houston-based RepeatMD, a patient engagement and fintech platform for medical professionals with non-insurance reimbursed services and products
  • Houston and Cheyenne Wyoming-based financial infrastructure tech platform Brassica, which raised its $8 million seed round in April
  • Polco, a Madison, Wisconsin-based polling platform for local governments, school districts, law enforcement, and state agencies
  • Chicago-based MSPbots, a AI-powered process automation platform for small and mid-sized managed service providers

Mercury's investment model is described as "operationally-focused," and the firm works to provide its portfolio companies with the resources needed to grow rapidly and sustainably. Since 2013, the fund has contributed to creating more than $9 billion of enterprise value across its portfolio of over 50 companies.

“Over the past few years there has been a tremendous migration of talent, wealth and know-how to non-coastal venture markets and this surge of economic activity has further accelerated the creation of extraordinary new companies and technology," says Garrou. "As the first venture capital firm to have recognized the attractiveness of these incredible regions a dozen years ago, we are excited to continue sourcing new opportunities to back founders and help these cities continue to grow and thrive.”

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Rice University's student startup competition names 2024 winners, awards $100,000 in prizes

taking home the W

A group of Rice University student-founded companies shared $100,000 of cash prizes at an annual startup competition.

Liu Idea Lab for Innovation and Entrepreneurship's H. Albert Napier Rice Launch Challenge, hosted by Rice earlier this month, named its winners for 2024. HEXASpec, a company that's created a new material to improve heat management for the semiconductor industry, won the top prize and $50,000 cash.

Founded by Rice Ph.D. candidates Tianshu Zhai and Chen-Yang Lin, who are a part of Lilie’s 2024 Innovation Fellows program, HEXASpec is improving efficiency and sustainability within the semiconductor industry, which usually consumes millions of gallons of water used to cool data centers. According to Rice's news release, HEXASpec's "next-generation chip packaging offer 20 times higher thermal conductivity and improved protection performance, cooling the chips faster and reducing the operational surface temperature."

The rest of the winners included:

  • Second place and $25,000: CoFlux Purification
  • Third place and $15,000: Bonfire
  • Outstanding Achievement in Social Impact Award and $1,500: EmpowerU
  • Outstanding Achievement in Artificial Intelligence and $1,000: Sups and Levytation
  • Outstanding Achievement in Consumer Goods Prize and $1,000: The Blind Bag
  • Frank Liu Jr. Prize for Creative Innovations in Music, Fashion and the Arts and $1,500: Melody
  • Outstanding Achievement in Climate Solutions Prizes and $1,000: Solidec and HEXASpec
  • Outstanding Undergraduate Startup Award and $2,500: Women’s Wave
  • Audience Choice Award and $2,000: CoFlux Purification

The NRLC, open to Rice students, is Lilie's hallmark event. Last year's winner was fashion tech startup, Goldie.

“We are the home of everything entrepreneurship, innovation and research commercialization for the entire Rice student, faculty and alumni communities,” Kyle Judah, executive director at Lilie, says in a news release. “We’re a place for you to immerse yourself in a problem you care about, to experiment, to try and fail and keep trying and trying and trying again amongst a community of fellow rebels, coloring outside the lines of convention."

This year, the competition started with 100 student venture teams before being whittled down to the final five at the championship. The program is supported by Lilie’s mentor team, Frank Liu and the Liu Family Foundation, Rice Business, Rice’s Office of Innovation, and other donors

“The heart and soul of what we’re doing to really take it to the next level with entrepreneurship here at Rice is this fantastic team,” Peter Rodriguez, dean of Rice Business, adds. “And they’re doing an outstanding job every year, reaching further, bringing in more students. My understanding is we had more than 100 teams submit applications. It’s an extraordinarily high number. It tells you a lot about what we have at Rice and what this team has been cooking and making happen here at Rice for a long, long time.”

HEXASpec was founded by Rice Ph.D. candidates Tianshu Zhai and Chen-Yang Lin, who are a part of Lilie’s 2024 Innovation Fellows program. Photo courtesy of Rice

2 Houston high schools rank among America's top 100 in 2024, says U.S. News

best in class

Two Houston high schools are dominating U.S. News and World Report's prestigious annual list of the country's best public high schools.

The 2024 rankings from U.S. News, released April 23, put Houston ISD’s Carnegie Vanguard High School at No. 31 nationally (up from No. 35 last year and No. 40 in 2022) among the country’s best high schools. The school also ranks No. 248 nationally among the best STEM (science, technology, engineering, and math) high schools and No. 12 among the best magnet high schools.

Meanwhile, DeBakey High School for Health Professions ranks No. 70 nationally among the best high schools (down from No. 66 last year and No. 50 in 2022) and No. 19 among best magnet high schools. DeBakey ranked No. 426 nationally among best STEM high schools.

Topping the national list for 2024 is the BASIS Peoria Charter School in Peoria, Arizona.

Each year, U.S. News evaluates about 18,000 high schools on six factors: college readiness, reading and math proficiency, reading and math performance, underserved student performance, college curriculum breadth, and graduation rates.

“The 2024 Best High Schools rankings offer a starting point for parents to understand a school’s academic performance, whether it’s a prospective school or one that their child is already attending,” said LaMont Jones, Ed.D., the managing editor of education at U.S. News, in a release. “Accessible data on our high schools can empower families across the country as they navigate today’s educational environment and plan for the future.”

Elsewhere in Texas
Around the state, these Texas high schools also made it into the top 100 nationally:

  • Dallas ISD's The School for the Talented and Gifted, No. 6 (unchanged from last year). No. 21 nationally among the best STEM high schools, and No. 3 among the best magnet high schools.
  • Dallas ISD's Irma Lerma Rangel Young Women's Leadership School, No. 23 (down from No. 18 last year) and No. 10 nationally among the best magnet high schools.
  • Dallas ISD's Science and Engineering Magnet School, No. 29 nationally among the best high schools (down from No. 23 last year), No. 37 nationally among the best STEM high schools, and No. 11 nationally among the best magnet high schools.
  • Grand Prairie ISD's Collegiate Institute, No. 30 (up from No. 188 last year). No. 6 nationally among best charter high schools.
  • Austin ISD’s Liberal Arts and Science Academy, No. 38 (down from No. 32 last year and No. 34 in 2022). No. 34 nationally among the best STEM high schools.
  • BASIS San Antonio - Shavano Campus, No. 64 (up from No. 81 last year and No. 77 in 2022). No. 76 nationally among the best STEM high schools and No. 13 nationally among the best charter high schools.
  • Brownsville ISD's Early College High School, No. 71 (up from No. 229 last year).
  • Dallas ISD’s Judge Barefoot Sanders Law Magnet, No. 85 (up from No. 93 last year and No. 48 in 2022) . No. 21 nationally among the best magnet high schools.

When broken down just to Texas schools, Houston's Carnegie Vanguard High School (No. 5) and DeBakey High School for Health Professions (No. 8) are both in the top 10 best-rated public high schools in Texas this year, U.S. News says.

Other Houston-area schools that rank among Texas' 100 best are:

  • No. 24 – Kinder High School for Performing and Visual Arts, Houston ISD
  • No. 25 – Challenge Early College High School, Houston ISD
  • No. 29 – Young Women's College Prep Academy, Houston ISD
  • No. 32 – Eastwood Academy, Houston ISD
  • No. 37 – Harmony School of Innovation - Katy, Katy
  • No. 40 – Kerr High School, Alief ISD, Houston
  • No. 43 – Houston Academy for International Studies, Houston ISD
  • No. 47 – East Early College High School, Houston ISD
  • No. 59 – Clear Horizons Early College High School, Clear Creek ISD, Houston
  • No. 61 – Seven Lakes High School, Katy ISD
  • No. 63 – Early College Academy at Southridge, Spring ISD, Houston
  • No. 68 – KIPP Houston High School, Houston
  • No. 70 – North Houston Early College High School, Houston ISD
  • No. 71 – Victory Early College High School, Aldine ISD, Houston
  • No. 75 – Tompkins High School, Katy ISD
  • No. 76 – Clements High School, Fort Bend ISD, Sugar Land
  • No. 82 – Sharpstown International School, Houston ISD
  • No. 85 – Tomball Star Academy, Tomball ISD
  • No. 89 – Westchester Academy for International Studies, Spring Branch ISD, Houston
  • No. 95 – Harmony School of Innovation - Sugar Land, Sugar Land
  • No. 97 – Harmony School of Discovery - Houston, Houston
  • No. 98 – Energy Institute High School, Houston ISD

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This article originally ran on CultureMap.

Houston innovation leaders secure SBA funding to start equitability-focused energy lab

collaboration station

A group of Houston's innovation and energy leaders teamed up to establish an initiative supporting equitability in the energy transition.

Impact Hub Houston, a nonprofit incubator and ecosystem builder, partnered with Energy Tech Nexus to establish the Equitable Energy Transition Alliance and Lab to accelerate startup pilots for underserved communities. The initiative announced that it's won the 2024 U.S. Small Business Administration Growth Accelerator Fund Competition, or GAFC, Stage One award.

"We are incredibly honored to be recognized by the SBA alongside our esteemed partners at Energy Tech Nexus," Grace Rodriguez, co-founder and executive director of Impact Hub Houston, says in a news release. "This award validates our shared commitment to building a robust innovation ecosystem in Houston, especially for solutions that advance the Sustainable Development Goals at the critical intersections of industry, innovation, sustainability, and reducing inequality."

The GAFC award, which honors and supports small business research and development, provides $50,000 prize to its winners. The Houston collaboration aligns with the program's theme area of Sustainability and Biotechnology.

“This award offers us a great opportunity to amplify the innovations of Houston’s clean energy and decarbonization pioneers,” adds Juliana Garaizar, founding partner of the Energy Tech Nexus. “By combining Impact Hub Houston’s entrepreneurial resources with Energy Tech Nexus’ deep industry expertise, we can create a truly transformative force for positive change.”

Per the release, Impact Hub Houston and Energy Tech Nexus will use the funding to recruit new partners, strengthen existing alliances, and host impactful events and programs to help sustainable startups access pilots, contracts, and capital to grow.

"SBA’s Growth Accelerator Fund Competition Stage One winners join the SBA’s incredible network of entrepreneurial support organizations contributing to America’s innovative startup ecosystem, ensuring the next generation of science and technology-based innovations scale into thriving businesses," says U.S. SBA Administrator Isabel Casillas Guzman.

Grace Rodriguez (left) and Juliana Garaizar have partnered up — along with their teams — to collaborate on the Equitable Energy Transition Alliance and Lab. Photos courtesy

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