Here's your latest roundup of Houston startup and innovation news you may have missed. Photo via Getty Images

We're on the other side of the hill that is Houston's summer, but the Bayou City's still hot — especially in terms of innovation news, and there might be some headlines you may have missed.

In this roundup of short stories within Houston startups and tech, a Houston venture capital fund has made its latest investment, Houston startups share big updates, and more.

Rivalry Technology rolls out mobile ordering at hot summer spot

You can now order poolside at this Houston-area resort. Image courtesy of Rivalry Tech

Lounging at Margaritaville Lake Resort at Lake Conroe was just made easier by Rivalry Tech, a Houston-based mobile ordering platform company. Rivalry Tech upgraded poolside ordering with its myEATz. According to a news release, customers can now order food and drinks from the 5 o’Clock Somewhere Bar and Lone Palm Bar via a custom QR code system for each lounge chair and table to increase operational efficiency for the Margaritaville Lake Resort staff.

“We wanted to be sure the rollout of the myEATz mobile ordering platform was helpful to the Margaritaville staff, not a hindrance to their existing process. We created custom QR codes and a color coded map to easily identify where the mobile orders are going,” says Charles Willis, COO of Rivalry Tech, in the release.

Rivalry, which provides mobile ordering at numerous sports stadiums and venues with sEATz, expanded into hospitality this year.

“The Rivalry Tech team helped us to seamlessly implement mobile ordering at Margaritaville Lake Resort. They created the marketing materials, established custom QR codes, uploaded mentors and trained our staff onsite. The whole process has been easy and collaborative,” says Amit Sen, director food and beverage for Margaritaville Lake Resort, in the release.

Mercury Fund invests in ReturnLogic's latest round

Mercury has led the latest fundraising round from a SaaS company. Image via Getty Images

Houston-based venture capital firm Mercury led Phillidelphia-based SaaS company ReturnLogic's $8.5 million series A funding round, which also had participation from Revolution’s Rise of the Rest Fund, White Rose Ventures, and Ben Franklin Technology Partners. The fresh funding will help the company double its workforce, accelerate product development, and expand Application Programming Interface capabilities, according to a news release.

Founded by CEO Peter Sobotta, Return Logic's SaaS platform, which can be plugged into existing e-commerce platforms, helps to enhance management of returns and prevent the challenging financial impacts of returns.

“While retailers have largely mastered forward logistics to get products into customers hands, the returns process remains an under-addressed, resource-draining problem that eats away at brands’ profits,” says Blair Garrou, managing director of Mercury, in a news release. “ReturnLogic is something entirely new to this market and uniquely built on Peter Sobotta’s deep operational experience in reverse logistics and supply chain management.

"While serving in the U.S. Navy, Peter specialized in reverse logistics and gained extensive expertise in ecommerce operations," Garrou continues. "With Peter at the helm, ReturnLogic’s innovative API-first returns solution is well-positioned to tackle the ever-growing operational returns problem facing retailers. We are excited to partner with Peter and his team as they continue to solve this massive problem for online retailers.”

Fluence Analytics named a top advanced manufacturing startup

Fluence Analytics was selected as one of 50 startups recognized. Graphic courtesy

Fluence Analytics, an analytics and process control solutions platform for the polymer and biopharmaceutical industries, was named as a Top 50 global advanced manufacturing startup by CB Insights. The Inaugural list breaks down 16 different cohorts, narrowed down from more than 6,000 companies who either submitted an application or were nominated. Fluence Analytics was one of three companies featured in the R&D Optimization category.

"Our team is very excited that our real-time process analytics, optimization and control products for the polymer and biopharma industries are included among such elite startups," says Jay Manouchehri, CEO of Fluence Analytics, in a statement to InnovationMap. "We wish to thank CB Insights for including Fluence Analytics in its inaugural list of the Top 50 global advanced manufacturing startups, as well as our customers and investors for supporting the development and roll-out of our transformative technology solutions."

Fluence Analytics moved to the Houston area from New Orleans last year. The company's tech platform allows for optimization and control products to polymer and biopharmaceutical customers worldwide.

HTX Labs secures $1.7M contract to expand within United States Air Force

HTX Labs' EMPACT product will be further developed to support the Air Force. Image courtesy of HTX Labs

HTX Labs, a Houston-based company that designs extended reality training for military and business purposes, that it has been awarded a $1.7 million Small Business Innovation Research Phase II Tactical Funding Increase with the US Air Force to enhance and operationalize to its product, EMPACT Immersive Learning Platform, in support of training modernization.

“We are very thankful to AFWERX and AFDT for this great opportunity to play an increasingly important role in helping the USAF accelerate training modernization," says Chris Verret, president HTX Labs, in a news release. "This TACFI award shows continued confidence in HTX Labs, with a strong commitment to accelerate usage and adoption of EMPACT.”

HTX Labs will leverage this contract to expand EMPACT's ability to rapidly create and distribute interactive, immersive training, collaborating closely with Advanced Force Development Technologies, per the release.

OpenStax to publish free edition of updated science textbook

OpenStax is growing its access to free online textbooks. Image via openstax.org

OpenStax, a tech initiative from Rice University that uploads free learning resources, has announced it will publish the 10th edition of an organic chemistry textbook by Cornell University professor emeritus John McMurry.

“This is a watershed moment for OpenStax and the open educational resources (OER) movement,” says Richard Baraniuk, founder and director of OpenStax, in a news release. “This publication will quickly provide a free, openly licensed, high-quality resource to hundreds of thousands of students in the U.S. taking organic chemistry, removing what can be a considerable cost and access barrier.”

Usually a big expense for organic chemistry students, McMurry, with the support of publisher Cengage, made the decision to offer the latest edition online as a tribute to his son, Peter McMurry, who died in 2019 after a long struggle with cystic fibrosis.

“If Peter were still alive, I have no doubt that he would want me to work on this 10th edition with a publisher that made the book free to students,” McMurry says in the release. “To make this possible, I am not receiving any payment for this book, and generous supporters have covered not only the production costs but have also made a donation of $500,000 to the Cystic Fibrosis Foundation to help find a cure for this terrible disease.”

This growing mobile ordering startup has rebranded to represent its growth. Photo courtesy of sEATz

Growing Houston sportstech company rebrands following platform expansion

the rivalry is on

The Houston startup that enabled in-seat food and beverage ordering at stadiums has grown over the past few years — and the company has entered into its new era with a rebrand.

Houston-based sEATz expanded this year to evolve its technology to enable optimized mobile ordering within hospitals. Launching that new platform, called myEATz, led to a need for a defined parent company to account for the growing company. Rivalry Technology will be run by the same sEATz and myEATz team.

“I always knew that sEATz would grow into something special," says Rivalry Tech CEO and Co-Founder Aaron Knape in a news release. "As we continue to expand and grow, our brand has also grown with it. With sEATz holding sway over Sports and Entertainment, and the myEATz platform making rapid inroads into healthcare, business dining and leisure, the Rivalry Tech branding will help pull it all together.”

The rebrand comes with a new logo, website, and social media accounts. Rivalry's chief of staff, Megan Fier, designed the new logo with sEATz's original design and colors in mind.

“Knowing how recognized the sEATz brand has become, I needed to design the Rivalry Tech logo to compliment that," she says in the release. "The dual arrows pointing together represent our two platform brands. The orange sEATz half shows where we started while the navy blue myEATz shows where we are going.”

The new website also showcases both brands with information for those interested in both platforms.

“Prior to our rebrand, we had two separate websites presenting as two separate companies," Fier says. "I wanted our website to be our go-to place for both sEATz and myEATz, to show that cohesion and showcase the depth of our offerings as Rivalry Tech. The new Rivalry Tech website shares our products, tells our story, and gives site visitors a place to connect to our team all in one website. Afterall, we are more than just mobile ordering.”

The name reflects the three sEATz co-founders' alma maters: Knape graduated from Texas A&M University, Marshall Law from the University of Texas, and Craig Ceccanti from Louisiana State University.

“An Aggie, a Longhorn, and an LSU Tiger walked into a bar," Knape explains, "and it was the only name on which we could agree.“

Founded in 2018, the company has raised two seed rounds — one in 2019 and another amid the pandemic in 2020. Following that funding, Knape previously told InnovationMap that he's focused on the company's growth.

"I tell the team that we're kind of coming out of stealth mode — I know we're not in a true stealth mode, but we haven't spent a lot of money on sales and marketing," Knape says on the Houston Innovators Podcast. "Now it's time to start putting that emphasis on who we are, that we're here, and we're ready to take over."

Craig Ceccanti joins the Houston Innovators Podcast to share what he's learned in his time as an entrepreneur in Houston — and what he's focused on now. Photo courtesy of Craig Ceccanti

Serial Houston entrepreneur's latest venture combines his passions for startups and software

houston innovators podcast episode 144

In 2020, Craig Ceccanti sat down to consider what his next career move would be. Former CEO and co-founder of national franchise Pinot's Palette and a co-founder of Houston sports tech startup sEATz, Ceccanti wanted a passion project.

His background is in software and computer science and, with years of experience in entrepreneurship, he decided a combination of his passions would be a software-focused consulting firm for startups and growing businesses. He founded T-Minus Solutions in November of 2020.

Ceccanti says on this week's episode of the Houston Innovators Podcast that at Pinot's Palette, he built the software himself, using freelancers to help build out and support his work. These developers were inconsistent and never lasted long, and Ceccanti says he experienced this challenge again when developing sEATz's software. He had the idea of providing a more reliable software outsourcing service for companies.

"I love technology and mentoring other entrepreneurs — those were two big factors," Ceccanti says on the show. "So, starting a consulting agency where we could help startups and mid sized-growth companies build custom software was kind of my perfect unicorn."

T-Minus Solutions, which is bootstrapped so far, has a team of six employees, and Ceccanti says they are specifically focused on working with impactful businesses. As a passion project, he explains he's less driven by revenue and more focused on the help and guidance he can provide his clients, whether it's building software for them or helping navigate a major business decision.

"Our statement is to empower entrepreneurs," he explains. "We want to make the accessibility to technology easy for them and have a trusted technology partner for them to come to."

Ceccanti, who's a mentor at Rice University, is dedicated to helping fellow Houston entrepreneurs and aspiring founders. He says over the years as he's doled out advice over coffee or beers, he got the idea to write down some of his lessons learned. The book, “A Founder’s Guide to A Software Startup,” is expected to release later this year.

Originally from Louisiana, Ceccanti — who moved to Houston after Hurricane Katrina — is enthusiastic about Houston's innovation ecosystem. He says he's seen so much progress for startups and entrepreneurs, and Houston has so many industries represented here — something extremely valuable when it comes to access to consumers.

"Houston is really unique — when you think about Dallas and Austin or even the West Coast or the Northeast — with the demand of our consumerbase. You can test out anything here — you can't say that about Austin or Dallas the way you can here," Ceccanti says. "Industrial, medical, consumer, retail, restaurant — you're in the right place. If you can make it work here, it's going to do good."

He shares more about the his career — from franchising to tech startups — as well as why he's bullish on Houston's business economy on the podcast. Listen to the interview below — or wherever you stream your podcasts — and subscribe for weekly episodes.


A new report finds that the Lone Star State is ideal for female entrepreneurs — and more Houston innovation news. Photo via Getty Images

Texas ranks as top state for female entrepreneurs, Houston startup wins VC competition, and more

short stories

Houston is starting summer strong in terms of innovation news, and there might be some headlines you may have missed.

In this roundup of short stories within Houston startups and tech, the Lone Star State ranks in the top 10 best states for women in business, a software startup rolls out a new tool, $5,000 small business grants are up for grabs, and more.

Texas named a top state for female entrepreneurs

The Lone Star State is prime for women entrepreneurs. Graphic courtesy

Banking platform NorthOne has ranked the top 10 states for women in entrepreneurship. Colorado took the No. 1 spot, but Texas ranked at No. 7. The report factored in data across eight metrics for all 50 US states including percentage of women-owned businesses, percentage of women-owned businesses with over 500 employees, number of women-owned businesses, startup survival rate, women-to-men pay ratio, unemployment rate for women, overall unemployment rate, and more.

According to the report, Texas has seen a boom in business growth over the last couple of years. The Lone Star State ranks seventh nationally for the percentage of new businesses at 18.18 percent and has the second highest startup survival rate in our top 10 at 79.63 percent.

"Texas offers a ton of opportunities for female entrepreneurs, too. It has one of the highest numbers of women-owned businesses in the country at a whopping 1.4 million, 2.11 percent of which have over 500 employees," reads the blog post. "That’s the fourth highest overall compared to all 50 states."

Pandata Tech selected for prestigious space innovation program

Pandata Tech is headed for St. Louis. Photos courtesy of Pandata

Pandata Tech was selected from hundreds of national applicants to join a first-of-its-kind program from the United States Government's National Geospatial-Intelligence Agency in partnership with Missouri Technology Corporation and St. Louis-based Capital Innovators.

The 13-week hybrid program will be held at NGA's Moonshot Labs in St. Louis. Eight companies have been selected for the third cohort, and they are tasked with tackling the NGA's four mission imperatives.

Pandata Tech's Data Quality Method (DQM) platform addresses the NGA's mission of Data Access and Data Integrity.

"We are grateful and excited to work directly with a team at NGA to explore multiple use cases that address internal cybersecurity risks and data validation," says Jessica Reitmeier, co-founder of Pandata Tech.

sEATz wins visiting VC competition

This Houston startup is headed to D.C. Photo courtesy

Revolution Ventures visited Houston and was hosted by the HX Venture Fund. On the visit, investors got a peek into the Houston innovation ecosystem, meet startups, and more. Managing Partner Tige Savage, who spoke with InnovationMap ahead of his visit, posed a challenge to startups to showcase their dream day in Houston. The winner would receive a trip to Washington D.C., where Revolution is based, and the Revolution team would return to the Bayou City to execute the dream day.

Houston-based in-venue mobile ordering solution sEATz won the competition with its submission, which included visiting Houston's sports stadiums, experiencing NASA, drinking at breweries, and BBQ. The submission can be viewed here.

Liongard expands its offerings

Houston-based Liongard's Roar technology is helping its customers get all their IT services under one umbrella. Image via Getty Images

Houston-based IT software and automation platform Liongard announced its collaboration with Gradient MSP to automate billing reconciliation. The new tool allows users to pull actual usage data from the customer systems and manage complex billing details more efficiently.

“We’re excited to streamline our Partners’ operations with an automated billing reconciliation solution that’s powerful and intuitive,” says Matt Miller, Liongard's vice president of product, in a news release. “We have the data that partners need to automate this manual process and partnering with Gradient to fully automate that workflow saves MSPs time and money.”

Liongard and Gradient MSP have been testing the integration for several months and have received rave reviews from their Partners.

“We’ve already been through our first billing cycle and I’m eager to deploy more inspectors and creatively address other reconciliation needs with the use of custom metrics,” says Brandon Myers, CEO at IMS Solutions Group. "In the end, the combined customization allows us to address unique situations. We all win together.”

Hello Alice launches latest fund opportunity

Hello Alice is giving out $5,000 grants to small businesses. Photo by Hero Images

Hello Alice has announced its latest round of the $5,000 Small Business Growth Fund. The fund provides the capital entrepreneurs need to make their next big move. Each recipient will receive a $5,000 grant, provided by Mastercard, to accelerate their growth and help make 2022 the year of their small business.

Eligible businesses must:

• Be a for-profit business

• Have less than $1 million in 2021 gross annual revenue

• Have a commitment to their customers and community

• Have a clear plan for use of funds If you applied and were not selected for a previous round of the program, you are welcome to submit a new application.

Hello Alice will evaluate applications based on any new information and judge it against a new pool of applicants. The deadline for this round is May 20, 2022, at 5 pm. Apply now.

This week's roundup of Houston innovators includes Aaron Knape of sEATz, Ivery Boston III of Houston Exponential, and Jesse Martinez of the LatinX Startup Alliance. Courtesy photos

3 Houston innovators to know this week

who's who

Editor's note: In this week's roundup of Houston innovators to know, I'm introducing you to three local innovators across industries — from sportstech to startup-focused nonprofit work — recently making headlines in Houston innovation.

Aaron Knape, CEO and co-founder of sEATz

Aaron Knape joins the Houston Innovators Podcast to share how he's taking the sEATz platform into a new vertical. Photo courtesy of sEATz

Although sEATz was founded in 2018, Aaron Knape, CEO and co-founder, says it's only now that the company is really coming into its own as a startup ready to scale in a big way.

"I tell the team that we're kind of coming out of stealth mode — I know we're not in a true stealth mode, but we haven't spent a lot of money on sales and marketing," Knape says on this week's episode of the Houston Innovators Podcast. "Now it's time to start putting that emphasis on who we are, that we're here, and we're ready to take over."

Knape joins the show to discuss sEATz's expansion into health care and what's next for the growing company. Click here to read more and stream the podcast.

Ivery Boston III, director of inclusive innovation at Houston Exponential

Ivery Boston III joins HX to lead inclusive efforts. Photo via LinkedIn

Houston Exponential made a new hire to reflect on the city's diversity. Ivery Boston III is one week into his role as HX's director of inclusive innovation. He will be tasked with leading prototyping and testing new inclusive ideas and ways of operating, according to a news release from HX. He will also be responsible for creating opportunities for underrepresented founders to succeed in Houston.

Boston joins HX from Miami, where he led research, strategy, recruitment of high-growth startups, and impact reporting for the Miami Downtown Development Authority.

"I am excited to serve the Houston community as the director of inclusive innovation at Houston Exponential," says Boston in the release. "I'm a massive fan of HX's work advocating for, connecting, and raising the profile of the Houston innovation ecosystem while linking local founders to funding. It is a privilege to join this exemplary team and provide additional attention to underrepresented and under-encouraged founders within the city." Click here to read more.

Jesse Martinez, founder of the LatinX Startup Alliance

Jesse Martinez, founder of the LatinX Startup Alliance, joins InnovationMap for a Q&A on why he's relocating his nonprofit to Houston. Photo courtesy of LSA

Wheen Jesse Martinez was looking for startup support as a Latino founder, he couldn't find it. So, he took the initiative to make it himself and launched the LatinX Startup Alliance. The Houston native announced his plans to relocate his Silicon Valley nonprofit to The Ion next year.

He tells InnovationMap why he thinks Houston is the right market for LSA.

"We're on the ground floor. We're helping to build that foundation. It's not an afterthought. It's not something that now we're trying to go back and think of diversity," Martinez tells InnovationMap. "I think that's the beautiful thing about Houston and everyone that I've met is that it's been so diverse and inclusive. That spirit is already there. So, how do we just maximize that?" Click here to read the full Q&A.

Aaron Knape joins the Houston Innovators Podcast to share how he's taking the sEATz platform into a new vertical. Photo courtesy of sEATz

Houston sportstech startup scales, plans expansion into health care

HOUSTON INNOVATORS PODCAST EPISODE 109

When sEATz launched, the startup was looking to provide a way for sports fans to order their beer and hotdog to their seat without having to miss a moment of a game. Over the years, the Houston company has expanded its technology to be a reliable platform for mobile order management in stadiums and arenas — and now Aaron Knape, co-founder and CEO, knows the technology can do so much more.

"We started this company with a focus on mobile ordering for sports and entertainment venues," Knape says on this week's episode of the Houston Innovators Podcast. "We've always known we wanted to get into other industry verticals, and one that stuck out, primarily because it's such a big deal in Houston, is the health care industry."

Knape says he and his co-founder, Marshall Law, let this idea be known to their vendor partners, and eventually sEATz got the right connection to a health care campus to try out a new product: MyEatz.

"What we're building now is a mobile ordering platform for these large health care campuses," Knape says, explaining that the campuses have thousands of employees with limited space and time for dining. "We're starting on our first pilots in the health care industry where we provide that mobile ordering platform and back-end support with our partner Aramark."

Among the first groups to pilot the new product is Houston Methodist, Knape says. The pilots should launch this quarter — either this month or next.

"This could be a much bigger market than sports and entertainment," Knape says. "Sports will continue to be our core market, but this will be a little less seasonal."

And, in light of the last 18 months, less averse to the effects of a shutdown of sports and entertainment. However, the sEATz team entered the COVID-19 pandemic with uncertainty — like most of the world — but the team was able to market sEATz mobile ordering platform as something crucial to bringing back fans in stadiums.

"Our goal was to go out and market ourselves and push the branding of 'we facilitate social distancing, mitigate crowds, and get rid of lines,'" Knape says on the show. "That really resonated with a lot of our clientbase."

Remarkably, sEATz even raised fresh funding amid the pandemic. In November of 2020, the startup closed an oversubscribed $1.6 million seed round led by Valedor Partners. Knape says he's currently focused on the company's to support scaling and growing the team by six or so new employees over the next few months.

"I tell the team that we're kind of coming out of stealth mode — I know we're not in a true stealth mode, but we haven't spent a lot of money on sales and marketing," Knape says. "Now it's time to start putting that emphasis on who we are, that we're here, and we're ready to take over."

Knape shares more on how sEATz is growing and the potential for Houston to build a sportstech niche within the innovation ecosystem on the podcast. Listen to the full interview below — or wherever you stream your podcasts — and subscribe for weekly episodes.


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Houston innovator on seeing a greener future on built environment

HOUSTON INNOVATORS PODCAST EPISODE 162

An architect by trade, Anas Al Kassas says he was used to solving problems in his line of work. Each project architects take on requires building designers to be innovative and creative. A few years ago, Kassas took his problem-solving background into the entrepreneurship world to scale a process that allows for retrofitting window facades for energy efficiency.

“If you look at buildings today, they are the largest energy-consuming sector — more than industrial and more than transportation,” Kassas, founder and CEO of INOVUES, says on the Houston Innovators Podcast. “They account for up to 40 percent of energy consumption and carbon emissions.”

To meet their climate goals, companies within the built environment are making moves to transition to electric systems. This has to be done with energy efficiency in mind, otherwise it will result in grid instability.

"Energy efficiency goes hand in hand with energy transition," he explains.

Kassas says that he first had the idea for his company when he was living in Boston. He chose to start the business in Houston, attracted to the city by its central location, affordable labor market, and manufacturing opportunities here.

Last year, INOVUES raised its first round of funding — a $2.75 million seed round — to scale up the team and identify the best markets to target customers. Kassas says he was looking for regions with rising energy rates and sizable incentives for companies making energy efficient changes.

"We were able to now implement our technology in over 4 million square feet of building space — from Boston, Seattle, Los Angeles, New York City, Portland, and very soon in Canada," he says.

Notably missing from that list is any Texas cities. Kassas says that he believes Houston is a great city for startups and he has his operations and manufacturing is based here, but he's not yet seen the right opportunity and adaption

"Unfortunately most of our customers are not in Texas," "A lot of work can be done here to incentivize building owners. There are a lot of existing buildings and construction happening here, but there has to be more incentives."

Kassas shares more about his growth over the past year, as well as what he has planned for 2023 on the podcast. Listen to the interview below — or wherever you stream your podcasts — and subscribe for weekly episodes.

Houston SPAC announces merger with Beaumont-based tech company in deal valued at $100M

speaking of spacs

A Houston SPAC, or special purpose acquisition company, has announced the company it plans to merge with in the new year.

Beaumont-based Infrared Cameras Holdings Inc., a provider of thermal imaging platforms, and Houston-based SportsMap Tech Acquisition Corp. (NASDAQ: SMAP), a publicly-traded SPAC with $117 million held in trust, announced their agreement for ICI to IPO via SPAC.

Originally announced in the fall of last year, the blank-check company is led by David Gow, CEO and chairman. Gow is also chairman and CEO of Gow Media, which owns digital media outlets SportsMap, CultureMap, and InnovationMap, as well as the SportsMap Radio Network, ESPN 97.5 and 92.5.

The deal will close in the first half of 2023, according to a news release, and the combined company will be renamed Infrared Cameras Holdings Inc. and will be listed on NASDAQ under a new ticker symbol.

“ICI is extremely excited to partner with David Gow and SportsMap as we continue to deliver our innovative software and hardware solutions," says Gary Strahan, founder and CEO of ICI, in the release. "We believe our software and sensor technology can change the way companies across industries perform predictive maintenance to ensure reliability, environmental integrity, and safety through AI and machine learning.”

Strahan will continue to serve as CEO of the combined company, and Gow will become chairman of the board. The transaction values the combined company at a pre-money equity valuation of $100 million, according to the release, and existing ICI shareholders will roll 100 percent of their equity into the combined company as part of the transaction.

“We believe ICI is poised for strong growth," Gow says in the release. "The company has a strong value proposition, detecting the overheating of equipment in industrial settings. ICI also has assembled a strong management team to execute on the opportunity. We are delighted to combine our SPAC with ICI.”

Founded in 1995, ICI provides infrared and imaging technology — as well as service, training, and equipment repairs — to various businesses and individuals across industries.

Report: Federal funding, increased life science space drive industry growth in Houston

by the numbers

Federal funding, not venture capital, continues to be the main driver of growth in Houston’s life sciences sector, a new report suggests.

The new Houston Life Science Insight report from commercial real estate services company JLL shows Houston accounted for more than half (52.7 percent) of total funding from the National Institutes of Health (NIH) across major Texas markets through the third quarter of this year. NIH funding in the Houston area totaled $769.6 million for the first nine months of 2022, exceeding the five-year average by 19.3 percent.

VC funding for Houston’s life sciences sector pales in comparison.

For the first nine months of this year, companies in life sciences raised $147.3 million in VC, according to the report. Based on that figure, Houston is on pace in 2022 to meet or surpass recent life sciences VC totals for most other years except 2021. JLL describes 2021 as an “outlier” when it comes to annual VC hauls for the region’s life sciences companies.

JLL notes that “limited venture capital interest in private industry has remained a challenge for the city’s life sciences sector. Furthermore, it may persist as venture capital strategies are reevaluated and investment strategies shift toward near-term profits.”

While life sciences VC funding has a lot of ground to cover to catch up with NIH funding, there are other bright spots for the sector.

One of those bright spots is the region’s rising amount of life sciences space.

The Houston area boasts more than 2.4 million square feet of space for life sciences operations, with another 1.1 million under construction and an additional 1.5 million square feet on the drawing board, the report says. This includes a soon-to-open lab spanning 25,000 square feet in the first phase of Levit Green.

A second bright spot is the migration of life sciences companies to the region. Two Southern California-based life sciences companies, Cellipoint Bioservices and Obagi Cosmeceuticals, plan to move their headquarters and relocate more than half of their employees to The Woodlands by the first half of 2023, according to the report.

“Houston’s low tax rate and cost of living were primary drivers for the decisions, supported by a strong labor pool that creates advantages for companies’ expansion and relocation considerations,” JLL says.