Houston VC funding surged in Q1 2025 to highest level in years, report says

by the numbers

In the first quarter of 2025, Houston-area startups raised $544.2 million in venture capital from investors, PitchBook-NVCA data shows. Image via Getty Images.

First-quarter funding for Houston-area startups just hit its highest level since 2022, according to the latest PitchBook-NVCA Venture Monitor. But fundraising in subsequent quarters might not be as robust thanks to ongoing economic turmoil, the report warns.

In the first quarter of 2025, Houston-area startups raised $544.2 million in venture capital from investors, PitchBook-NVCA data shows. That compares with $263.5 million in Q1 2024 and $344.5 million in Q1 2023. For the first quarter of 2022, local startups nabbed $745.5 million in venture capital.

The Houston-area total for first-quarter VC funding this year fell well short of the sum for the Austin area (more than $3.3 billion) and Dallas-Fort Worth ($696.8 million), according to PitchBook-NVCA data.

While first-quarter 2025 funding for Houston-area startups got a boost, the number of VC deals declined versus the first quarters of 2024, 2023 and 2022. The PitchBook-NVCA Monitor reported 37 local VC deals in this year’s first quarter, compared with 45 during the same period in 2024, 53 in 2023, and 57 in 2022.

The PitchBook-NVCA report indicates fundraising figures for the Houston area, the Austin area, Dallas-Fort Worth and other markets might shrink in upcoming quarters.

“Should the latest iteration of tariffs stand, we expect significant pressure on fundraising and dealmaking in the near term as investors sit on the sidelines and wait for signs of market stabilization,” the report says.

Due to new trade tariffs and policy shifts, the chances of an upcoming rebound in the VC market have likely faded, says Nizar Tarhuni, executive vice president of research and market intelligence at PitchBook.

“These impacts amplify economic uncertainty and could further disrupt the private markets by complicating investment decisions, supply chains, exit windows, and portfolio strategies,” Tarhuni says. “While this may eventually lead to new domestic investment and create opportunities, the overall environment is facing volatility, hesitation, and structural change.”

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Houston startups raised a combined $380 million in venture funding last quarter. Photo via Getty Images

Here's what Houston startups have raised in funding so far in 2024

Q1 2024 VC ACTIVITY

Seven Houston startups have started the new year strong with over $380 million in venture funding — most of which from one mega deal for a geothermal company.

According to InnovationMap reporting, Houston's VC activity in the first quarter of 2024 spanned industry and stage — from pre-seed to series E. It's a large chunk of money raised in Houston for one quarter — but not in terms of deals closed, at least compared to the previous quarter, in which startups raised over $170 million but across nine deals.

On the national side, it's not too different of a story. According to a quarterly report from PitchBook, the United State's VC activity for the start of the year "showed to be one of the slowest areas of the venture market during the quarter." Only $9.3 billion in capital was raised in the U.S. last quarter, which is only 11.3 percent of the total raised in the already slowed market of 2023.

"While dry powder remains high, slowed fundraising portends to LP hesitancy toward VC, and should predict a more difficult dealmaking environment down the road," reads an email from PitchBook. "During the past few years, large mega-funds drove fundraising trends, but Q1 VC fundraising shows there may be no appetite for such vehicles in today’s market."

These are the seven startup VC deals closed in Houston so far this year, according to reporting on InnovationMap.

Fervo Energy raises $244M in latest funding round

Fervo Energy scored a $244 million round of funding thanks to existing and new investors. Photo via Fervo Energy

An Oklahoma-based shale oil and gas leader has backed Fervo Energy's latest round of funding, supporting the startup's geothermal technology yet again.

Fervo announced its latest round of funding this week to the tune of $244 million. The round was led by Devon Energy, a company that's previously backed the startup.

“Demand for around-the-clock clean energy has never been higher, and next-generation geothermal is uniquely positioned to meet this demand,” Tim Latimer, Fervo CEO and co-founder, says in a news release. “Our technology is fully derisked, our pricing is already competitive, and our resource pipeline is vast. This investment enables Fervo to continue to position geothermal at the heart of 24/7 carbon-free energy production.” Read more about the round.

Procyrion secures $57.7M series E

Procyrion has announced the closing of its series E round of funding. Photo via Getty Images

Houston-born and bred medical device company, Procyrion, has completed its series E with a raise of $57.7 million, including the conversion of $10 million of interim financing.

Procyrion is the company behind Aortix, a pump designed to be placed in the descending thoracic aorta of heart failure patients, which has been shown to improve cardiac performance in seriously ill subjects. The money raised will allow the company to proceed with a the DRAIN-HF Study, a pivotal trial that will be used for eventual FDA approval and commercialization.

The Aortix is the brainchild of Houston cardiologist Reynolds Delgado. According to Procyrion’s CSO, Jace Heuring, Delgado, gained some of his experience with devices for the heart working with legendary Texas Heart Institute surgeon O.H. “Bud” Frazier. He filed his first patents related to the Aortix in 2005. Read more about the round.

Welligence Energy Analytics raises $41M series B

Houston-based Welligence Energy Analytics specializes in data and intelligence for the oil and gas markets, greenhouse gas emissions sector, and CCUS projects. Photo via Getty Images

A group of investors has chipped in $41 million to purchase a minority stake in Houston-based Welligence Energy Analytics, a provider of energy data and intelligence.

Boston-based venture capital firm Elephant Partners led the series B round, with participation from Veriten, a Houston-based, energy-focused research, investing, and strategy firm, and EDG, a Metairie, Louisiana-based energy consulting firm. Several executives from the energy, information services, and software sectors also contributed to the round.

Founded in 2016, Welligence specializes in data and intelligence for the oil and gas markets, greenhouse gas emissions sector, and carbon capture, storage, and utilization (CCUS) projects. Clients include major oil and gas companies, as well as large investment banks. Read more about the round.

Motif Neurotech secures nearly $19M series A

Motif Neurotech, which develops minimally invasive bioelectronics for mental health treatment, closed its series A round with an oversubscribed $18.75 million. Photo via Rice.edu

A health tech startup based out of a newly formed accelerator program at Rice University has raised venture funding.

Motif Neurotech closed its series A round with an oversubscribed $18.75 million. The company, which develops minimally invasive bioelectronics for mental health treatment, was formed out of the Rice Biotech Launch Pad that launched last fall.

The round was led by Arboretum Ventures, with participation from new investors KdT Ventures, Satori Neuro, Dolby Family Ventures, re.Mind Capital and existing investors Divergent Capital, TMC Venture Fund, PsyMed Ventures, Empath Ventures and Capital Factory. Read more about the round.

Sage Geosystems closes $17M series A 

Houston-based Sage Geosystems announced the first close of $17 million round led by Chesapeake Energy Corp. Photo via sagegeosystems.com

A Houston geothermal startup has announced the close of its series A round of funding.

Houston-based Sage Geosystems announced the first close of $17 million round led by Chesapeake Energy Corp. The proceeds aim to fund its first commercial geopressured geothermal system facility, which will be built in Texas in Q4 of 2024. According to the company, the facility will be the first of its kind.

The venture is joined by technology investor Arch Meredith, Helium-3 Ventures and will include support from existing investors Virya, LLC, Nabors Industries Ltd., and Ignis Energy Inc.

“The first close of our Series A funding and our commercial facility are significant milestones in our mission to make geopressured geothermal system technologies a reality,” Cindy Taff, CEO of Sage Geosystems, says in a news release. “The success of our GGS technologies is not only critical to Sage Geosystems becoming post-revenue, but it is an essential step in accelerating the development of this proprietary geothermal baseload approach. Read more about the round.

Ema raises $2M round of bridge funding

Ema, which operates as a health and wellness-focused, AI-based chat for women, has raised additional funding. Screenshot courtesy of Ema

A Houston-based startup that's improving health and wellness for women with its artificial intelligence-backed platform has raised a bridge round of funding.

Ema closed its latest bridge round, bringing its total funding to nearly $2 million. The company received investment from Kubera's Venture Capital and Victorum Capital, which joined existing investors Hearst Labs, Wormhole Capital, Acumen America, and Techstars.

Ema strives to deliver "personalized, empathetic, and evidence-based support" to its users through its generative AI technology. The platform has more than 100,000 users, and has expanded into the B2B sector with $100,000 in contracts within just 30 days after pivoting to this model, according to the company. Read more about the round.

TrueLeap Inc. raises oversubscribed $610,000 pre-seed round

The edtech company offers a comprehensive approach to shrinking the digital divide with a suite of technology including software, hardware, and more. Photo courtesy of TrueLeap

An edtech startup has just secured funding to further its mission of increasing accessibility to education.

TrueLeap Inc., global digital education startup addressing the digital divide in education, has raised $610,000, which is over its target of $500,000. The round was led by United Kingdom-based Maya Investments Limited.

"This oversubscribed funding round, led by Maya Investments Limited, is a testament to the urgent need for innovative educational technologies in emerging markets. Our commitment to providing affordable and integrated solutions is stronger than ever," says Sandip Bordoloi, CEO and Co-Founder of TrueLeap, in a news release. Read more about the round.

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Report: Houston reclaims top 10 ranking among America's best cities

Houston has made a triumphant return to America's 10 best cities for 2026, certifying the city is a cornerstone of the country's growth and economic prosperity.

Houston ranks No. 9 nationwide in the annual "America's Best Cities" report from Canada-based real estate and tourism marketing firm Resonance Consultancy. Each year, the report ranks the relative qualities of livability, cultural "lovability," and economic prosperity in 393 American cities with metropolitan populations of 500,000 or more.

Dallas surpassed H-Town as the No. 8 best city in America, and the Lone Star State boasts a strong presence among the top 25. Austin and San Antonio, respectively, were named the 11th and 24th best American cities this year.

Previously, Houston was dubbed the 13th best American city in 2025, down from its No. 10 ranking in the 2024 report.

Rather than profiling each individual city like in past reports, the 2026 edition focuses on regional and state prosperity. Texas' economic dominance is second only to Florida's, and the state's growth is solidified by the Dallas-Houston-Austin "triangle," where each metro has its own distinct economic identity, but when combined "form one of the most formidable regional economies in the world."

"In our 2026 survey, Dallas ranks third nationally as the place Americans believe offers the best job opportunities, Austin fifth, and Houston seventh," the report's author wrote. "That concentration of perceived economic opportunity in a single state is unmatched, and the GDP data confirms it isn’t just perception."

After being named one of the best places to start a business or a career earlier in 2026, Houston has continued to punch above its weight with its success in tourism, education, and housing growth.

Overall, the report found a correlation between a city's population growth and its latest ranking, with bigger cities appearing higher up on the list. The top three best American cities — New York, Los Angeles, and Chicago — are coincidentally the three largest metros, while Dallas and Houston are the fourth and fifth largest but appear eighth and ninth on the list.

"Scale compounds at the large city level — more people generate more economic activity, more cultural infrastructure, more employer presence, which attracts more people," the report said.

The top 10 best cities in America for 2026 are:

  • No. 1 – New York
  • No. 2 – Los Angeles
  • No. 3 – Chicago
  • No. 4 – Miami
  • No. 5 – San Francisco
  • No. 6 – Seattle
  • No. 7 – Las Vegas
  • No. 8 – Dallas
  • No. 9 – Houston
  • No. 10 – Boston

New probe into Tesla after vehicle slams into Houston-area home at high speed

Tesla Talk

The top U.S. auto regulator opened an investigation Monday, June 22, after a Tesla using an automated driving feature slammed into a Texas home at high speed and killed a 76-year-old woman standing inside.

The National Highway Traffic Safety Administration said it's opening a special investigation into the Tesla Model 3 crash on Friday near Houston, a significant probe because the car was using technology that Elon Musk considers key to the company's future.

The Tesla CEO is rolling out robotaxis using automated software in several U.S. cities this year and plans to invite Tesla owners to put their cars into the fleet using the same system across the country.

The driver told the Harris County Sheriff's Office that he was using the technology, according to a police report on the crash, but it's not clear what role, if any, it played in the incident.

Tesla did not respond to a request for comment but the head of the company's artificial intelligence efforts suggested on social media later Monday that the self-driving feature was not to blame.

“In this case, the driver manually overrode self-driving by pressing the accelerator all the way to 100% of the accel pedal in this residential area,” wrote Ashok Elluswamy on X, the platform that is now part of Musk's rocket company, SpaceX. “They reached a speed of 73 mph during the crash, and had the accelerator pressed even after the crash.”

The police report noted that the driver was not drunk and is cooperating. It identified the woman killed as Martha Avila.

Video obtained by KHOU-TV shows the car traveling at top speed over the front lawn of a brick home in Katy, then ramming into a front room. The next shot shows the car encased in the home amid piles of crumbling plaster, split beams and bits of furniture.

The auto safety regulator, known as NHTSA, has launched several investigations into Tesla, including one late last year into 58 incidents in which Teslas reportedly violated traffic safety laws while using self-driving technology, leading to more than a dozen crashes and fires and nearly two dozen injuries.

A few months earlier, the NHTSA opened an investigation into why Tesla apparently had not been reporting crashes promptly as required.

As for special crash investigations, the NHTSA has opened 46 involving Teslas using self-driving or driver-assistance technology over the past decade, according to the agency's records. In more than a dozen of those crashes, at least one person — a driver, passenger or pedestrian — was killed.

Tesla stock fell sharply early last year as car sales plunged amid a boycott of Musk after he waded into politics, leading President Donald Trump's budget-cutting Department of Government Efficiency initiative and embracing European extremist candidates.

Musk has since shifted the Tesla story to one less about car sales and more about AI and robotaxis, and done so successfully. The stock is up 16% in the past year.

Intuitive Machines lands $1M grant to expand robotics operations

Expansion mode

Houston-based Intuitive Machines is expanding its operations around the country.

The space tech company—which has offices and labs in Texas, California, Arizona, Colorado and Maryland—announced that it has received a $1 million grant from Maryland Gov. Wes Moore through the state's Build Our Future Grant. The funding will go toward expanding Intuitive Machines’ Super Cislunar Robotics Assembly Building (Supa-CRAB) Mechanisms and Robotics Center of Excellence in Anne Arundel County.

The company will move into a 69,000-square-foot facility and build out additional lab and office space. It will also procure equipment that will allow for in-house Assembly, Integration and Test (AI&T) activities, according to a news release. Intuitive Machines says the expansion will take place this fall.

“This collaboration shows how industry, state programs, and education can reinforce one another,” Steve Altemus, CEO of Intuitive Machines, said in the release. “Maryland invests in innovation, companies grow and hire, students gain experience, and communities benefit from new opportunities and long-term career pathways. Together with Governor Moore, the state of Maryland, and Anne Arundel County leaders, we are building a permanent path to long-term lunar operations, an advanced robotics and mechanisms center of excellence, and a technology edge for our nation.”

Intuitive Machines first launched operations in Maryland in 2021 and has since expanded five times in the state. The company officially opened its robotics and mechanisms facility in 2024.

The Maryland team has built robotics and mechanisms for the Nova-C landers and IM-1 and IM-2 missions. In the future, Intuitive Machines expects the Maryland team to work on its IM-3 Rover Deployment Mechanism (RDM), a 360 pan-tilt camera for panoramic views, the Main Engine Gimbal (MEG), and the company's first data relay satellite, known as Altus-1.

Intuitive Machines moved into a new $40 million headquarters at the Houston Spaceport in 2023. The company announced an expansion of its lease last year.

The company announced a $175 million equity investment to fuel growth in March. It's since landed a $180 million NASA CLPS award to deliver seven payloads to the moon's Mons Malapert on the IM-5 mission.

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