Houston VC funding surged nearly 50% in Q1 2026, report says

VC victories

Houston saw a jump in VC funding in Q1 2026, fueled by several major investments in clean energy startups. Image via Getty Images

First-quarter venture capital funding for Houston-area startups climbed nearly 50 percent compared to the same time last year, according to the PitchBook-NVCA Venture Monitor.

In Q1 2026, Houston-area startups raised $532.3 million, a 49 percent jump from $320.2 million in Q1 2025, according to the PitchBook-NVCA Venture Monitor.

However, the Q1 total fell 23 percent from the $671.05 million raised in Q4 2025.

Among the first-quarter funding highlights in Houston were:

  • Utility Global, which focuses on industrial decarbonization, announced a first close of $100 million for its Series D round.
  • Sage Geosystems raised a $97 million Series B round to support its geothermal energy storage technology.

Those funding rounds underscore Houston’s evolution as a magnet for VC in the energy sector.

“Today, the energy sector is increasingly extending into the startup economy as venture capital flows into companies developing the technologies that will shape the future of global energy,” the Greater Houston Partnership says.

The energy industry accounted for nearly 40 percent of Houston-area VC funding last year, according to market research and lead generation service Growth List.

Adding to Houston’s stature in VC for energy startups are investors like Chevron Technology Ventures, the investment arm of Houston-based oil and gas giant Chevron; Goose Capital; Mercury Fund; and Quantum Energy Partners.

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Energytech Cypher co-founders Nada Ahmed and Jason Ethier. Photo via energytechcypher.com

Leading Houston energy ecosystem rebrands for next phase

new look

Houston-based Energytech Nexus has rebranded.

The cleantech founders community will now be known as Energytech Cypher. Organizers say the new name was inspired by the Arabic roots of the word cypher, ṣifr, which is also the root of the word zero.

"A cypher is a key that unlocks what's hidden," Nada Ahmed, co-founder and chief revenue officer of Energytech Cypher, said in a news release. "And zero? Zero is where every transformation begins, the leap from 0 to 1, from idea to reality, from potential to power. We decode the energy transition by connecting the right founders, the right capital, and the right corporate partners at the right time, because the most important journey in energy is the one that takes you from nothing to something."

Energytech Nexus has rebranded to Energytech Cypher.

Co-founder and CEO Jason Ethier says that the name change better reflects the organization's mission.

"The energy transition doesn't have a technology problem. It has a connection problem," Ehtier added in the release. "The right founders exist. The right investors exist. The right partners exist. What's been missing is the infrastructure to bring them together—to decode the complexity, remove the friction, and make sure the best technologies find the markets that need them. That's what this community has always done. Energytech Cypher is the name that finally says it."

Energytech Cypher, previously known as Energytech Nexus, was first launched in 2023 and has grown from a podcast to a 130-member ecosystem. It has supported startups including Capwell Services, Resollant, Syzygy Plasmonics, Hertha Metals, Solidec and many others.

It is known for its flagship programs like the Pilotathon, which connects founders with industry partners for pilot opportunities. The event debuted in 2024.

Energytech Cypher also launched its COPILOT Accelerator last year. The accelerator partners with Browning the Green Space, a nonprofit that promotes diversity, equity and inclusion (DEI) in the clean energy and climatech sectors. The inaugural cohort included two Houston-based startups and 12 others from around the U.S.

It also hosts programs like Liftoff, Energy Tech Market, lunch and learns, CEO roundtables, investor workshops and international partnership initiatives.

Last year, Energytech Cypher also announced a new strategic ecosystem partnership with Greentown Labs, aimed at accelerating growth for clean energy startups. It also named its global founding partners, including Houston-based operations such as Chevron Technology Ventures, Collide, Oxy Technology Ventures, and others from around the world.

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This article originally appeared on our sister site, EnergyCapitalHTX.com.

The City of Sugar Land is putting money on the table to support startups that relocate jobs to southwest Houston. Photo via Getty Images.

Booming Houston suburb launches innovation grant to attract startups

innovation incentive

Think you’ve got a burgeoning startup? Consider moving it to southwest Houston. The City of Sugar Land announced the Sugar Land Starts Innovation Fund last week to support companies that move jobs to the area.

“The Sugar Land Starts Innovation Fund is designed to support companies that are ready to grow and make a meaningful, long-term commitment to our community,” Colby Millenbruch, business recruitment manager for the City of Sugar Land, said in a news release. “By focusing on revenue-generating startups and performance-based incentives, we are creating a clear pathway for innovative companies to scale while reenergizing existing office space.”

The performance-based, non-equity dilutive grant program is open to companies that demonstrate at least $250,000 in generated revenue or $500,000 in institutional backing from a bank or venture capital firm. They must commit to hiring or relocating at least three employees in Sugar Land for a minimum of three years and at an average salary of $61,240. Compliance will be verified through Texas Workforce Commission reporting.

The fund builds off the Sugar Land Plug and Play partnership to turn the city into an innovative technology hub.

Collaboration with the Silicon Valley-based startup incubator and accelerator on a physical location in southwest Houston has supported 22 startups and has raised $6.5 million in capital since it officially launched in Sugar Land last March. Companies located at the Sugar Land Plug and Play include Synaps, a browser-based design platform for architects, and Intero Biosystems, which produces miniature human organs for preclinical drug development.

In addition to direct funding and business space, both the new grant and the overall Plug and Play project facilitate meetings with Houston-area businesses like CenterPoint Energy.

This should not only bring new industries to Sugar Land, but also allow existing companies to expand outward as technological investors to create a web of new progress.

“This investment is about more than technology. It’s about creating an environment where innovation can take root, grow, and deliver lasting value for the Sugar Land community,” David Steele, director of Texas at Plug and Play, added in the release. “Sugar Land is setting itself apart by taking a long-term view, investing in founders, partnerships, and technologies that will define the next chapter of growth. We’re proud to partner with the city in building an innovation ecosystem that benefits both entrepreneurs and the broader community.”

Local startups collected $1.75 billion in venture capital in 2025. Photo via Pexels.

Houston startups closed $1.75 billion in 2025 VC funding, says report

by the numbers

Going against national trends, Houston-area startups raised 7 percent less venture capital last year than they did in 2024, according to the new PitchBook-NVCA Venture Monitor report.

The report shows local startups collected $1.75 billion in venture capital in 2025, down from $1.89 billion the previous year.

Houston-based geothermal energy company Fervo Energy received a big chunk of the region’s VC funding last year. Altogether, the startup snagged $562 million in investments, as well as a $60 million extension of an existing loan and $45.6 million in debt financing. The bulk of the 2025 haul was a $462 million Series E round.

In the fourth quarter of last year, Houston-area VC funding totaled $627.68 million. That was a 22 percent drop from $765.03 million during the same period in 2024. Still, the Q4 total was the biggest quarterly total in 2025.

Across the country, startups picked up $339.4 trillion in VC funding last year, a 59 percent increase from $213.2 trillion in 2024, according to the report. Over the last 10 years, only the VC total in 2021 ($358.2 trillion) surpassed the total from 2025.

Nationwide, startups in the artificial intelligence and machine learning sector accounted for the biggest share of VC funding (65.4 percent) in 2025, followed by software-as-a-service (SaaS), big data, manufacturing, life sciences and healthtech, according to the report.

“Despite an overall lack of new fundraising and a liquidity market that did not shape up as hoped in 2025, deal activity has begun a phase of regrowth, with deal count estimates showing increases at each stage, and deal value, though concentrated in a small number of deals, falling just [8 percent] short of the 2021 figure,” the report reads.

Houston ranked in the top 10 and Dallas-Fort Worth claimed the top spot on a recent tech hub report. Photo via Getty Images.

Houston climbs to top 10 spot on North American tech hubs index

tech report

Houston already is the Energy Capital of the World, and now it’s gaining ground as a tech hub.

On Site Selection magazine’s 2026 North American Tech Hub Index, Houston jumped to No. 10 from No. 16 last year. The index relies on data from Site Selection as well as data from CBRE, CompTIA and TeleGeography to rank the continent’s tech hotspots. The index incorporates factors such as internet connectivity, tech talent and facility projects for tech companies.

In 2023, the Greater Houston Partnership noted the region had “begun to receive its due as a prominent emerging tech hub, joining the likes of San Francisco and Austin as a major player in the sector, and as a center of activity for the next generation of innovators and entrepreneurs.”

The Houston-area tech sector employs more than 230,000 people, according to the partnership, and generates an economic impact of $21.2 billion.

Elsewhere in Texas, two other metros fared well on the Site Selection index:

  • Dallas-Fort Worth nabbed the No. 1 spot, up from No. 2 last year.
  • Austin rose from No. 8 last year to No. 7 this year.

San Antonio slid from No. 18 in 2025 to No. 22 in 2026, however.

Two economic development officials in DFW chimed in about the region’s No. 1 ranking on the index:

  • “This ranking affirms what we’ve long seen on the ground — Dallas-Fort Worth is a top-tier technology and innovation center,” said Duane Dankesreiter, senior vice president of research and innovation at the Dallas Regional Chamber. “Our region’s scale, talent base, and diverse strengths … continue to set DFW apart as a national leader.”
  • “Being recognized as the top North American tech hub underscores the strength of the entire Dallas-Fort Worth region as a center of innovation and next-generation technology,” said Robert Allen, president and CEO of the Fort Worth Economic Development Partnership.

While not directly addressing Austin’s Site Selection ranking, Thom Singer, CEO of the Austin Technology Council, recently pondered whether Silicon Hills will grow “into the kind of community that other cities study for the right reasons.”

“Austin tech is not a club. It is not a scene. It is not a hashtag, a happy hour, or any one place or person,” Singer wrote on the council’s blog. “Austin tech is an economic engine and a global brand, built by thousands of people who decided to take a risk, build something, hire others, and be part of a community that is still young enough to reinvent itself.”

South of Austin, Port San Antonio is driving much of that region’s tech activity. Occupied by more than 80 employers, the 1,900-acre tech and innovation campus was home to 18,400 workers in 2024 and created a local economic impact of $7.9 billion, according to a study by Zenith Economics.

“Port San Antonio is a prime example of how innovation and infrastructure come together to strengthen [Texas’] economy, support thousands of good jobs, and keep Texas competitive on the global stage,” said Kelly Hancock, the acting state comptroller.

Tempest Droneworx won the Best Speed Pitch award at SXSW Pitch earlier this year. Photo via LinkedIn.

10 promising Houston startups that made headlines in 2025

year in review

Editor's note: As we reflect on 2025, we're looking back at the stories and startups that made waves in Houston's innovation scene. These 10 startups reached memorable milestones, won prestigious awards, found creative solutions, and disrupted their industries.

Persona AI: Houston humanoid robotics startup inks new deal to deploy its rugged robots

A concept design rendering of Persona AI's humanoid robot. The company is expanding at the Ion and plans to deliver prototype humanoids by the end of 2026 for complex shipyard welding tasks. Rendering courtesy Persona AI.

Persona AI is building modularized humanoid robots that aim to deliver continuous, round-the-clock productivity and skilled labor for "dull, dirty, dangerous, and declining" jobs. The company was founded by Houston entrepreneur Nicolaus Radford, who serves as CEO, along with CTO Jerry Pratt and COO Jide Akinyode. It raised $42 million in pre-seed funding this year and is developing its prototype of a robot-welder for Hyundai's shipbuilding division, which it plans to unveil in 2026. The company won in the Deep Tech Business category at this year's Houston Innovation Awards. Continue reading.

Rheom Materials: Houston startup unveils its innovative leather alternative at the rodeo

Rheom Materials presented its bio-based alternative, Shorai, a 93 percent bio-based leather, at the rodeo and plans to scale it up this year. Photos courtesy Rheom Materials

Rheom Materials presented its scalable, bio-based alternative known as Shorai, a 93 percent bio-based leather, through two custom, western-inspired outfits that showed off cowboy flair through a sustainable lens at the Houston Livestock Show and Rodeo earlier this year.

Next up, the company said it aimed to scale production of Shorai, the Japanese word for “future,” at a competitive price point, while also reducing its carbon footprint by 80 percent when compared to synthetic leather. The company also made a large-scale production partnership with a thermoplastic extrusion and lamination company, Bixby International, this year. Continue reading.

Koda Health: Houston digital health platform Koda closes $7 million funding round

Tatiana Fofanova and Dr. Desh Mohan, founders of Koda Health, which recently closed a $7 million series A. Photo courtesy Koda Health.

Houston-based digital advance care planning company Koda Health closed an oversubscribed $7 million series A funding round this year. The round, led by Evidenced, with participation from Mudita Venture Partners, Techstars and Texas Medical Center, will allow the company to scale operations and expand engineering, clinical strategy and customer success. Koda Health, saw major growth this year by integrating its end-of-life care planning platform with Dallas-based Guidehealth in April and with Epic Systems in July. The company won the Health Tech Business category at the 2025 Houston Innovation Awards. Continue reading.

Veloci Running: Student-led startup runs away with prestigious prize at Rice competition

The H. Albert Napier Rice Launch Challenge awarded $100,000 in equity-free funding to student-led startups, including first-place finisher Veloci Running. Photo courtesy of Rice University.

Veloci Running took home the first-place prize and $50,000 at the annual Liu Idea Lab for Innovation and Entrepreneurship's H. Albert Napier Rice Launch Challenge. The company was founded by Tyler Strothman, a former track and field athlete and senior at Rice, majoring in sport management. Inspired by the foot pain he suffered due to the narrow toe boxes in his running shoes, Strothman decided to create a naturally shaped shoe designed to relieve lower leg tightness and absorb impact. Additional prize winners included SteerBio, Kinnections, Labshare and several others. Continue reading.

Square Robot Inc.: Houston robotics co. unveils new robot that can handle extreme temperatures

The new robot eliminates the need for humans to enter dangerous and toxic environments. Photo courtesy of Square Robot

Houston- and Boston-based Square Robot Inc.'s newest tank inspection robot became commercially available and certified to operate at extreme temperatures this fall. The new robot, known as the SR-3HT, can operate from 14°F to 131°F, representing a broader temperature range than previous models in the company's portfolio. According to the company, its previous temperature range reached 32°F to 104°F. The company also announced a partnership with downstream and midstream energy giant Marathon Petroleum Corp. (NYSE: MPC) last month. Continue reading.

Bot Auto: Houston autonomous trucking co. completes first test run without human intervention

Bot Auto completed its first test run without human assistance in Houston. Photo courtesy Bot Auto.

Houston-based Bot Auto, an autonomous trucking company, completed its first test run without human assistance earlier this year. Bot Auto conducted the test in Houston. The transportation-as-a-service startup added that this milestone “serves as a validation benchmark, demonstrating the maturity and safety of Bot Auto’s autonomy stack and test protocols.” This summer, founder Xiaodi Hou told the Front Lines podcast that Bot Auto had raised more than $45 million. Continue reading.

Nomad: Screen-free hiking app developed in Houston earns 'Best of the Best' award

NOMAD aims to help hikers stay in the moment while still utilizing technology. Photo courtesy UH.

An AI-powered, screen-free hiking system developed by Varshini Chouthri, a recent industrial design graduate from the University of Houston, received this year's Red Dot’s “Best of the Best” award, which recognizes the top innovative designs around the world. Known as NOMAD, the system aims to help users stay in the moment while still utilizing technology. Continue reading.

Little Place Labs, Helix Earth, Tempest Droneworx: Houston startups win big at SXSW 2025 pitch competition

Two Houston startups won the SXSW Pitch showcase in their respective categories. Photo via Getty Images

Houston had a strong showing at the SXSW Pitch showcase in Austin this year, with several local startups claiming top prizes in their respective categories.

Little Place Labs, a Houston space data startup, won the Security, GovTech & Space competition. Clean-tech company Helix Earth, which spun out of Rice University and was incubated at Greentown Labs, won in the Smart Cities, Transportation & Sustainability contest. Tempest Droneworx, a Houston-based company that provides real-time intelligence collected through drones, robots and sensors, won the Best Speed Pitch award. Continue reading.

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Houston quantum energy chip startup emerges from stealth with $12M round

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Houston-based Casimir has emerged from stealth with a $12 million seed round to commercialize its quantum energy chip.

The round was led by Austin-based Scout Ventures. Lavrock Ventures, Cottonwood Technology, Capital Factory, American Deep Tech, and Tim Draper of Draper Associates also participated in the round. The oversubscribed round exceeded the company’s original $8 million target, according to a news release.

Casimir’s semiconductor chips can generate power from quantum vacuum fields without the need for batteries or charging. The company plans to commercialize its first-generation MicroSparc chip by 2028.

The MicroSparc chip measures 5 millimeters by 5 millimeters and is designed to produce 1.5 volts at 25 microamps, comparable to a small rechargeable battery, without degradation and no replacement cycle.

“Casimir represents exactly the kind of breakthrough dual-use technology Scout Ventures was built to back,” Brad Harrison, founder and managing partner at Scout Ventures, said in the release. “This is based on 100 years of science and we’re finally approaching a commercial product … We’re proud to lead this round and support Casimir’s journey from applied science to deployed technology.”

Casimir says it aims to scale its technology across the ”full power spectrum,” including large-scale energy systems that can power homes, commercial infrastructures and electric vehicles.

Casimir's scientific work has been supported by DARPA-funded nanofabrication research and its technology was incubated at the Limitless Space Institute (LSI). LSI is a nonprofit that works to innovate interstellar travel and was founded by Kam Ghaffarian. Technology investor and serial entrepreneur Ghaffarian has been behind companies like X-energy, Intuitive Machines, Axiom Space and Quantum Space.

Harold “Sonny” White, founder and CEO of Casimir, believes the technology can power devices for years without replacements.

“Millions of devices will operate for years without a battery ever needing to be replaced or recharged because we have engineered a customized Casimir cavity into hardware capable of producing persistent electrical power,” White added in the release. “I spent nearly two decades at NASA studying how we power humanity’s future. That work led me to the Casimir effect and the quantum vacuum, where new tools have allowed us to build on a century of scientific knowledge and bring abundant power to the world.”

Houston leads the way in innovative brain research and more news to know

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Editor's note: The top Houston innovation news for the first half of May includes an initial round of brain research grants from Rice and FDA approval for clinical trial of a Houston startup's brain implant. Below are the five most-read InnovationMap stories published May 1-14, 2026:

1. Rice Brain Institute awards seed grants for dementia, Alzheimer’s research

The recently established Rice Brain Institute awarded 12 seed grants last month to support research on dementia, Alzheimer’s disease, Parkinson’s disease and other neurological disorders. The grants are part of the Rice DPRIT Seed Grant Program, which aims to help faculty members generate preliminary data, test and teams that would be supported under the Dementia Prevention and Research Institute of Texas. Continue reading.

2. Houston startup’s brain implant for depression advances to clinical trial

Houston-based Motif Neurotech has received FDA approval to move forward with its first clinical trial for its innovative way to fight treatment-resistant depression and other mental health disorders. The company has developed a brain-computer interface technology based on research from Rice University. The blueberry-sized, wirelessly powered implantable device known as the Digitally-programmable Over-brain Therapeutic (DOT) stimulator delivers electrical stimulation to brain circuits linked to depression. The DOT stimulator sits in the skull above the dura without touching the brain and is considered an alternative to transcranial magnetic stimulation, which requires multiple treatment sessions and can cause headaches. Continue reading.

3. Houston legacy planning platform secures $2.5M investment, adds to board

Houston-based Paige, a comprehensive life planning and succession software company, has secured a $2.5 million investment to expand the AI-driven tools on its platform. The funding comes from Alabama-based 22nd State Banking Company, according to a news release. Paige says it will use the funding to expand automation, AI-driven onboarding and self-service tools, as well as add to its sales and customer success teams. Continue reading.

4. 7+ can't-miss Houston business and innovation events in May

Houston is living up to its nicknames as Space City and the Energy Capital of the World this month with a lineup of insightful talks, pitch days and industry conferences. Plus, there are opportunities to network over crawfish, learn about brain health and more. Continue reading.

5. Houston rises in 2026 ranking of best U.S. cities to start a business

Houston has reaffirmed its commitment to a business-friendly environment and now ranks as the 26th best large U.S. city for starting a business in 2026. The city jumped up eight places after ranking 34th last year. Continue reading.

Houston-based Fervo Energy bumps up IPO target to $1.82 billion

IPO update

Houston-based geothermal power company Fervo Energy is now eyeing an IPO that would raise $1.75 billion to $1.82 billion, up from the previous target of $1.33 billion.

In paperwork filed Monday, May 11 with the U.S. Securities and Exchange Commission, Fervo says it plans to sell 70 million shares of Class A common stock at $25 to $26 per share.

In addition, Fervo expects to grant underwriters 30-day options to buy up to 8.33 million additional shares of Class A common stock. This could raise nearly $200 million.

When it announced the IPO on May 4, Fervo aimed to sell 55.56 million shares at $21 to $24 per share, which would have raised $1.17 billion to $1.33 billion. The initial valuation target was $6.5 billion.

A date for the IPO hasn’t been scheduled. Fervo’s stock will be listed on Nasdaq under the ticker symbol FRVO.

Fervo, founded in 2017, has attracted about $1.5 billion in funding from investors such as Bill Gates-founded Breakthrough Energy Ventures, Google, Mitsubishi Heavy Industries, Devon Energy (which is moving its headquarters to Houston), Tesla co-founder JB Straubel, CalSTRS, Liberty Mutual Investments, AllianceBernstein, JPMorgan, Bank of America and Sumitomo Mitsui Trust Bank.

Fervo’s marquee project is Cape Station in Beaver County, Utah, the world’s largest EGS (enhanced geothermal system) project. The first phase will deliver 100 megawatts of baseload clean power, with the second phase adding another 400 megawatts. The site can accommodate 2 gigawatts of geothermal energy. Fervo holds more than 595,000 leased acres for potential expansion.

Cape Station has secured power purchase agreements for the entire 500-megawatt capacity. Customers include Houston-based Shell Energy North America and Southern California Edison.

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This article originally appeared on our sister site, EnergyCapitalHTX.com.

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