4 things you need to know from the Greater Houston Partnership's annual report as it pertains to innovation

By the numbers

The Greater Houston Partnership has the facts. Nick Bee/Pexels

Every year, the Greater Houston Partnership — the city's economic development arm — gathers up data and reports to paint a full picture of the Bayou City. In the past few editions, innovation has been a key component.

The GHP's innovation coverage spans three pages under the top industry and sectors category. From tech startup growth to money raised, here's what you need to know from the 2019 Houston Facts.

Houston has the 12th largest tech sector in the United States

Christina Morillo/Pexels

The innovation section starts pretty strong with this fun fact. The No. 12 tech sector ranking comes from Computing Technology Industry Association, which cites that Houston has more than 223,000 tech workers. According to the report, about two-thirds of Houston's tech workers are in industries outside of computer and software.

GHP credits Houston's large population of tech workers to its connection to aerospace and oil and gas.

"As the home of NASA's Johnson Space Center and headquarters to the global energy industry, Houston has long been a global hub of engineering talent," the report reads. "In recent years, those skills have given rise to a thriving ecosystem of digital technology companies."

GHP's data reflect that Houston has more than 8,200 tech-related firms, which includes over 500 tech startups.

Venture funding was up over 50 percent between 2017 and 2018

Via Houston Facts

Houston's recorded venture funding doesn't have a hockey stick chart to brag about. Over the past few years, venture funding has been up and down, according to S&P Capital IQ.

"Houston companies in clean energy, health innovation and digital technology have received $3.1 billion in venture capital and growth funding across 333 deals since 2014, averaging $576 million every year," the report reads.

But between 2018 and 2017, VC funds were up 50.9 percent. Of the three categories, clean energy technology pulled in the most money each year and was responsible for 64 percent of the funding during the 2014-2018 period. Sunnova, a residential solar company, had the most money raised during this time with $1.3 billion.

The largest deals reported in Houston in 2018 were:

Sunnova Energy — $183 million
OncoResponse — $40 million
Trisun Energy Services — $39 million
Arundo Analytics — $25 million
Procyrion — $16 million
QuVa Pharma — $15 million
NeoSensory — $12 million

University-backed entrepreneurship remains strong

Courtesy of Rice University

The Princeton Review ranks Rice University and the University of Houston as having among the best entrepreneurship programs in the country. Rice runs its Rice Alliance for Technology and Entrepreneurship out of its Jones Graduate School of Business, while University of Houston's Cyvia and Melvyn Wolff Center for Entrepreneurship is housed in the Bauer College of Business.

Both schools have run accelerator programs for seven years — the past six of which have been in collaboration. Rice's OwlSpark and UH's RED Labs finished this summer's program on August 1 at the Bayou Startup Showcase with 16 startup pitches.

Meanwhile, the Rice Business Plan Competition is deemed the "richest pitch competition" in the country. In 2019, the competition saw $3 million invested. RBPC companies have gone on to raise $1.2 billion in capital during the competition's 18-year history.

At UH, which has its own set of pitch events, the Wolff Center's graduate students manage a million-dollar Cougar Venture Fund. The fund has a group of experts that analyze and invest in early stage technology companies.

The life science industry continues to grow

Via Houston Facts

In 2018, Houston housed 20.5 percent of the country's clinical trials, with over 1,800 active. The city has more than 1,760 life sciences companies and over 25,100 biotech experts and 7,200 medical researchers.

Thankfully, the money seems to match this volume of activity. Last year, Houston's medical research grant funding from the National Institutes of Health, which totaled $668 million in 2018, was up almost 7 percent from 2017. The city's medical institutions have received nearly $3 billion from NIH since 2014 — an average of $600 million a year.

According to the GHP, the top Houston institutions receiving NIH funding in 2018 were:

Baylor College of Medicine — $255 million
University of Texas MD Anderson Cancer Center — $149 million
University of Texas Health Science Center — $90 million
University of Texas Medical Branch Galveston — $87 million
University of Houston — $24 million
Methodist Hospital Research Institute — $19 million
Rice University — $14 million
Texas Southern University — $3 million

As mentioned before, venture capital and private equity investment has increased in Houston, and that trend is also represented in the life science sector. In 2018, life science startups raked in $119 million, which represents a a 41.7 percent increase from $84 million in 201717, according to S&P Capital IQ.

In 2018, the top biotech firms receiving investment were:

OncoResponse — $40 million
Procyrion — $16 million
QuVa Pharma — $15 million
Pulmotect — $10 million
Tvardi Therapeutics — $9 million

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Houston-based virtual reality startup raises $3.2M in first outside capital round

fresh funding

HTX Labs, a Houston-based company that designs extended reality training for military and business purposes, announced last week that it has raised its first outside capital.

The company has received a $3.2 million investment from Cypress Growth Capital. Founded in 2017, HTX Labs — developer of the EMPACT Immersive Learning Platform — has been granted funding from the Department of Defense as well as grown its client base of commercial Enterprises. The platform uses virtual and extended reality that "enables organizations to rapidly create, deploy, measure, and sustain cost-effective, secure, and centralized immersive training programs, all within engaging, fully interactive virtual environments," per a news release.

“We have been looking to secure outside capital to accelerate the growth of our EMPACT platform and customer base but we hadn’t found the right partner who provided an investment vehicle that matched our needs,“ says HTX Labs CEO Scott Schneider in the release. “We found everything we were looking for in Cypress Growth Capital. They have a non-dilutive funding model that aligns with our capital expectations and have the level of experience that really makes this smart money.

"Cypress has a decade-long track record of success in helping emerging software and services companies achieve scale," he continues. "It is clear that the team’s collective entrepreneurial and operating experience will be of tremendous benefit to us as we focus on expanding our customer base in a very intentional way.”

The fresh funding will go toward growing and scaling the company's operations — both within the current Department of Defense and expansion opportunities into key commercial markets, like heavy industry, manufacturing, and higher education. Additionally, the funding will support increased customer adoption.

“Scott and his team have built an exceptional business that is poised for dramatic growth,” says Cypress Partner Pat McCaffrey in the release. “HTX Labs’ modern, immersive training solution provides clients with a force multiplier for modernizing training and an unmatched ROI.”

Houston's biggest benefactors gift massive $50M to pivotal Rice University institute

big money

Houston’s most generous couple has once again gifted a massive sum to a local institution. Rich and Nancy Kinder’s Kinder Foundation has donated $50 million to Rice University’s Kinder Institute for Urban Research, the organization announced.

The Kinder's generous grant will assist the institute’s focus on what it dubs “inclusive prosperity” — that is, “ensuring that everyone can contribute to Houston's success and share in its opportunities.”

This new grant follows the approximately $30 million he Kinder Foundation previously gifted Rice’s Kinder Institute and its affiliates to facilitate its headquarters.

“Over the past decade, the Kinder Institute has played an integral role in shaping Houston,” said Rich Kinder, chairman of the Kinder Foundation. “However, we can do more to inform and more directly address the challenges our communities face, particularly in the areas of housing, education, economic mobility, health and population research.”

To that end, the Kinders’ funds will ensure the institute can assist its partners regardless of their ability to pay for research. Funds will also help the institute respond to community research needs quickly during times of crisis — such as a catastrophic storm or pandemic — when funds aren’t readily available.

Kinder Institute director Ruth López Turley calls the grant “a gift to all of Houston,” speaking to the institute’s work to improve lives through data, research, engagement and action.

“Inclusive prosperity doesn’t just happen spontaneously,” she noted in a statement. “It requires an explicit effort informed by research. Lots of organizations are working hard to make things better, but most of them have very limited research capacity, and that’s what the Kinder Institute is primed to do.”

Founded in 2010, the institute has evolved into a leader in research, data, and policy analysis of critical issues such as housing, transportation, and education. The institute also releases the familiar Kinder Houston Area Survey, which charts significant changes in the way area residents perceive and understand Houston’s ongoing challenges and opportunities.

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This article originally ran on CultureMap.

Expert: Building Hispanic wealth means investing in Houston

Guest column

Every year at this time ― Hispanic Heritage Month ― we collectively celebrate the economic, cultural, and social contributions of the Hispanic-Latino community to our nation. We honor the work of past generations which have allowed children and future generations to benefit from more opportunities.

As diverse a community as is the world, we strive to build a future where there are no barriers for success, and at Bank of America, we do our part to make an impact by helping build Hispanic-Latino wealth in Houston.

The numbers are clear: The 2020 Census revealed that the Hispanic-Latino population in the United States rose to 62.1 million, making up 18.7 percent of the total U.S. population and accounting for slightly more than half (51.1 percent) of the population growth between 2010 and 2020. Hispanic-Latinos now open more small businesses than any other group in the country and are also the fastest-growing demographic of small business owners across the nation. It is not surprising that Hispanic-Latino economic power continues to rise year after year. According to Nielsen Scarborough, the number of Houston Hispanic businesses have increased 85 percent since 2013.

Investing in business

Investing in Hispanic-Latino wealth means supporting entrepreneurs so they are set up for success. Early-stage funding is critical for the growth of a new business, especially when Hispanic-Latino entrepreneurs are still faced with gaps in financial literacy and business education, funding, and networking opportunities.

According to data from Crunchbase, Latino-founded startups accounted for only 2.1 percent of venture investments in the U.S. last year. This is unjustifiable.

As part of our commitment to advancing racial equality and economic opportunity, we have dedicated $350 million in minority- and women-led companies through capital investment by mission-focused venture funds. Of the funds we have in our portfolio, one in every four are led by Hispanic-Latino managers, providing capital that will help entrepreneurs and small business owners grow their businesses, create jobs, and improve financial stability.

An important element to creating opportunities for Hispanic-Latinos to build wealth, whether as a business owner or an employee, is ensuring that young people recognize higher education as a pathway to achieve success. That means partnering with colleges and universities and investing in job creation, skills-building, and support services for students to do so. Locally, we do this with EMERGE Fellowship and with the University of Houston College of Medicine. When we invest in students, we are investing in future professionals and business leaders who will build Hispanic-Latino wealth and contribute to Houston’s economy and culture. This is something we can celebrate together for years to come.

Investing in sustainable homeownership

Sustainable homeownership provides a lasting investment for future generations and cycles capital into the community. The National Association of Hispanic Real Estate Professionals (NAHREP) recently released data showing an increase in Latino homeownership, from 47.5 percent in 2019 to 48.4 percent in 2021, the highest level since the mid-2000s. Through the Community Homeownership Commitment, which provides low down payment loans and closing cost grants, families can take their savings and turn them into lasting legacies. It is a pillar for families to build wealth.

Here in Houston, we also support organizations that assist with homeownership, like Tejano Center, Avenue CDC, and Houston Habitat for Humanity. Building Hispanic-Latino home equity increases the amount of capital families can use now or in the future helping build our Houston economy.

During the past decade, the rate of Hispanic-Latino economic development has far outpaced rates among non-Hispanics. Supporting and honoring our Hispanic-Latino clients is not just a month-long initiative, it is a long-term, generational investment in America and we are proud to be investing in a stronger economy for Houston now and for years to come.