Houston and Texas recognized as top regions for startups, according to new reports

best around

Both Houston and the Lone Star State as a whole have been named top places to start a business. Photo via Getty Images

When it comes to corporate giants, the Houston area has plenty to brag about: It’s home to the headquarters of two dozen Fortune 500 companies.

However, Houston can also boast that it’s one of the best U.S. metro areas to launch a business. Houston ranks ninth on a new list from the 42Floors real estate website of the top spots for new entrepreneurs. Austin lands at No. 3 on the list, Dallas appears at No. 8, and San Antonio winds up at No. 19. Las Vegas ranks first.

The website judged metro areas based on factors reflecting business opportunity and affordability.

“Starting out in a business-friendly environment, being able to afford a small office, or even having access to the right consulting services and networking opportunities can all contribute to your new business’s chances for success,” 42Floors says.

Among the factors favoring Houston are:

  • A cost of living on par with the national average, and lower than Austin’s and Dallas’ averages.
  • Average annual labor costs of $45,750 per employee, below the figures for Austin and Dallas.

Referring to Houston, Austin, and Dallas, 42Floors says: “As you might expect, each metro in the Texas trio offered a different context in which different businesses could thrive. For this reason, entrepreneurs will need to weigh the importance of affordability and opportunity for their respective business ideas.”

The presence of Houston, Austin, Dallas, and San Antonio in the top 20 of the 42Floors study underscores the Lone Star State’s standing as a top state for startups.

Job search platform Lensa recently ranked Texas as the best state to launch a startup. To developing its ranking, Lensa examined factors such as volume of new-business applications, corporate tax rates, and cost of living.

Texas earned a 7.09 out of 10 on Lensa’s scale. Helping driving that score was the 492,243 new-business applications filed in the past year in Texas, beating all other states except California and Florida. The application number “demonstrates just how many ambitious entrepreneurs there are in Texas,” Lensa says.

In addition, Texas lands at No. 2 among the top 10 startup states for the lowest corporate tax rate, at 3.95 percent, and at No. 3 among the top 10 startup states for the lowest cost of living.

According to a new report, Houston's workforce isn't among the happiest in the nation. Photo via Getty Images

Report: Texas is home to a not-so happy workforce

by the numbers

Call it the Bayou City Blues. A report from job website Lensa ranks Houston third among the U.S. cities with the unhappiest workers.

The report looks at four factors — vacation days taken, hours worked per week, average pay, and overall happiness — to determine the happiest and unhappiest cities for U.S. workers.

Lensa examined data for 30 major cities, including Dallas and San Antonio. Dallas appears at the top of the list of the cities with the unhappiest workers, and San Antonio lands at No. 8.

Minneapolis ranks first among the cities with the happiest workers.

Here's how Houston fared in the four ranking categories:

  • 16.6 million unused vacation days per year.
  • 40.1 average hours worked per week.
  • Median annual pay of $32,251.
  • Happiness score of out of 50.83.

Dallas had 19.4 million unused vacation days per year, 40.5 average hours worked per week, median annual pay of $34,479, and a happiness score of 53.3 out of 100.

Meanwhile, San Antonio had 5.7 million unused vacation days per year, 39.2 average hours worked per week, median annual pay of $25,894, and a happiness score of 48.61.

Texas tops Lensa's list of the states with the unhappiest workers.

"While the Lone Star State had a decent happiness score of 52.56 out of 100, it scored poorly on each of the other factors, with Texans allowing an incredible 67.1 million earned vacation days go to waste over the course of a year," Lensa says.

In terms of general happiness, Houston shows up at No. 123 on WalletHub's most recent list of the happiest U.S. cities. Dallas takes the No. 104 spot, and San Antonio lands at No. 141. Fremont, California, grabs the No. 1 ranking.

Ad Placement 300x100
Ad Placement 300x600

CultureMap Emails are Awesome

Property Showcase

Rice University breaks ground on new innovation hub, The Arc

breaking ground

Construction is officially underway on Rice University's The Arc in Houston’s Ion District.

The university broke ground on the 200,000-square-foot research, corporate innovation and office building on Nov. 4. The facility will share a plaza with the existing Ion building, fostering collaboration within the innovation space, according to Rice.

“The Arc will bring Rice’s extraordinary research and talent and Houston’s impactful innovation ecosystem into even closer connection with the industries and innovators working to solve some of the world’s most consequential challenges,” Rice President Reginald DesRoches said in an announcement. “That constant exchange of ideas and expertise will help move discoveries more rapidly from the laboratory to real-world impact.”

Construction is scheduled to be completed by Q2 2028. Rice Real Estate Co. is developing the project, and Rice University will occupy about 80,000 square feet in the building (about 40 percent). Preleasing has begun, with floor plans ranging from 28,000 to 31,000 square feet.

The Arc will feature conference and meeting spaces, an amenity lounge, fitness center, outdoor plazas, underground parking, and on-site retail and dining, according to the release.

It aims to host tenants focused on artificial intelligence and machine learning, data science, robotics, quantum science and engineering and energy, including Rice's new AI Foundry.

Rice says the AI Foundry will be a space where university experts and partners can support organizations with AI challenges. Rice recently committed to hiring 75 new AI-focused faculty and announced plans to launch a new Master of Artificial Intelligence (MAI) next fall.

“The AI Foundry is exactly the kind of collaboration the Arc is designed to enable,” Amy Dittmar, the Howard R. Hughes Provost and executive vice president for academic affairs at Rice, added in the release. “By bringing Rice researchers together with industry partners in a shared environment, we can accelerate the movement of ideas from research into practical applications while helping organizations build the capabilities they need to succeed as AI continues to evolve.

Developers of The Arc are targeting LEED Gold certification by incorporating smart building automation and energy-saving features into the project's design. Rice first announced the project in September 2025.

Rendering courtesy Bogza

Houston battery tech startup FlowCellutions acquired by Katy energy co.

M&A

Katy-based TerraFlow Energy, an energy storage and infrastructure company, has acquired Houston-based battery technology startup FlowCellutions. Financial terms weren’t disclosed.

FlowCellutions still operates under its established name, but with the tagline “A TerraFlow Energy Company.” Becca Segel, founder and CEO of FlowCellutions, now runs the business as its president.

FlowCellutions specializes in electrochemical sensing, diagnostics, analytics, and testing that offer insights into battery chemistry, charging capabilities, and system performance.

“FlowCellutions has always been focused on developing better ways to understand what is happening inside a flow battery and using that information to improve how these systems perform,” Segal said in a press release. “Joining TerraFlow gives us the opportunity to apply that work at a much larger scale while continuing to build the capabilities and expertise that make FlowCellutions unique.”

The FlowCellutions platform supports data centers and other heavy users of power. It’s designed to help reduce operating costs, prevent failures and costly downtime, and extend battery lifetime from about seven years to more than 30 years.

Segel founded the company in 2022. A member of Greentown Labs, the company raised more than $2 million in non-dilutive funding and received $1.5 million in National Science Foundation funding earlier this year.

FlowCellutions is one of five finalists in the Energy Transition Business category of InnovationMap’s 2026 Houston Innovation Awards.

“FlowCellutions brings a depth of scientific and technical expertise that fits naturally with where TerraFlow is going,” Jon Parrella, CEO of TerraFlow, said in the release.

“As we move from developing these systems to deploying them at commercial scale, understanding performance at a deeper level matters,” he said. “Bringing FlowCellutions into TerraFlow strengthens that capability and gives both teams more opportunity to advance the technology.”TerraFlow, founded in 2024, develops long-duration energy storage and power infrastructure for data centers, industrial facilities, utilities and other large power consumers.

---

This article originally appeared on EnergyCapitalHTX.com.

3 fast-growing Houston scaleups named Innovation Awards finalists

meet the finalists

From IPOs to groundbreakings, some of Houston's most innovative companies reached major milestones this year.

As part of the 2026 Houston Innovation Awards, our Scaleup of the Year category honors innovative later-stage startups that have recently reached a significant milestone in company growth. Three scaleups have been named finalists for the 2026 award.

Read more about these businesses, their founders and their breakthrough technologies below. The 2026 winners will be announced on InnovationMap.com in mid-November.

Erock

Energy infrastructure company Erock, previously known as Enchanted Rock, develops dual-purpose microgrids that rely on natural gas and renewable natural gas to produce lower carbon emissions and air pollutants than diesel generators. Its products can provide bridge power before grid interconnection, backup power during outages and dispatchable capacity that supports long-term grid reliability. The company has more than 1,100 megawatts of installed capacity and over 20 years of experience serving commercial, municipal and large-scale technology customers.

Erock completed its initial public offering this year, raising approximately $600 million in gross proceeds. It also grew its contracted power system sales backlog to approximately $1.7 billion, up tenfold year-over-year, with production sold out through 2028, according to the company's application. The company secured a major equipment order from Anthropic, began construction of the 366-megawatt El Paso Electric project supporting Meta's data center campus, and started assembly operations at its Hyperion facility in Cypress, Texas.

Hertha Metals

Hertha Metals produces lower-cost, lower-emission steel and high-purity iron. The company has developed a single-step process that uses natural gas as a direct reductant instead of metallurgical coal, which cuts production costs by more than 25 percent and emissions by up to 50 percent, according to the company. The same process produces high-purity iron needed for high-purity steels and rare earth magnets. The company says it aims to "re-industrialize America’s production of critical materials."

Hertha Metals was founded by CEO Laureen Meroueh in 2022 and emerged from stealth last year with more than $17 million in venture capital funding. The company closed a $133.65 million Series A this month and also broke ground on its $100M high-purity iron factory known as Chalyx in Conroe.

Venus Aerospace

Spacetech company Venus Aerospace is developing a high-thrust rotating detonation rocket engine (RDRE) that replaces the subsonic combustion used in conventional rocket engines. The RDRE is a compact, simpler engine that can deliver up to 15 percent greater efficiency for defense and space applications. It completed its first U.S. flight test of the engine last summer.

Venus Aerospace was founded in 2020 by CEO Cassie Duggleby and CTO Andrew Duggleby. It raised a $20 million Series A in 2022 and $42 million Series A2 in 2025. It closed a $91 million Series B earlier this year and expanded its leadership team. The company is working toward longer-duration and higher-thrust testing and advancing its flight program.

View All Listings