Houston ranked in the top emerging North American startup ecosystems

We're No. 4!

Houston fell on the international list of emerging startup hubs, but — when it comes to North America — Houston still ranks favorably. Photo via Getty Images

The evolution of Houston’s startup scene continues: A new report awards the region a No. 1 ranking for the robustness of early-stage funding among North America’s emerging startup ecosystems.

Policy advisory and research firm Startup Genome reports that startups in the Houston area attracted $884 billion in early-stage funding from the second half of 2020 to the end of 2022. Early-stage funding generally refers to a startup’s seed and series A rounds.

The $884 million figure puts Houston at No. 1 for early-stage funding among emerging startup ecosystems in North America and at No. 9 globally. Istanbul, Turkey, grabs the top global spot. Startup Genome characterizes the funding meccas in this ranking category as “Strong Starters.”

Startup Genome’s 2023 report on startup ecosystems emphasizes that early-stage funding “is an important indicator of potential success,” since most startups that receive series A rounds have demonstrated their potential by generating revenue, creating a minimal viable product, or being close to launching a product.

In Startup Genome’s global ranking of emerging startup ecosystems as a whole, Houston falls to No. 11 this year from No. 5 in 2022. The report doesn’t cite a reason for the drop. Copenhagen, Denmark, takes the No. 1 ranking in this category.

While its global ranking slipped, Houston still makes this year’s list of the top five emerging ecosystems in North America:

Detroit (same position as last year)
North Carolina’s Research Triangle (up two spots from last year)
Minneapolis (down one spot from last year)
Houston (down one spot from last year)
Phoenix (up two spots from last year)

Startup Genome pegs the value of Houston’s startup ecosystem at $22 billion, based on startup exits and valuations from the second half of 2020 to the end of 2022.

A 2022 report from the Greater Houston Partnership noted that the Houston area is home to more than 60 organizations that foster startup growth. These include incubators, accelerators, coworking spaces, makerspaces, college and university programs, and nonprofit initiatives.

“These organizations have formed a growing web of resources assisting tech entrepreneurs across the Houston region,” says the report.

Silicon Valley once again tops Startup Genome’s list of the world’s leading startup ecosystems, followed by New York City and London (tied at No. 2), Los Angeles (No. 4), and Tel Aviv, Israel (No. 5).

Startup Genome defines a startup ecosystem as a shared pool of resources generally within a 60-mile radius of a central point, such as the city of Houston. These resources include accelerators, incubators, funding groups, coworking spaces, schools, and policymakers.

Startup Genome’s six ranking factors for ecosystems are performance, funding, talent and experience, market reach, knowledge, and “connectedness.”

“Despite current economic challenges, we are confident that, equipped with the right knowledge, entrepreneurs, policymakers, and community leaders everywhere can leverage opportunities to come together and show how innovative technologies can not only continue to drive growth and job creation, but simultaneously help save the planet and ensure a better future for everyone,” JF Gauthier, founder and CEO of Startup Genome, says in a news release. “This essential mission cannot be put on hold while we wait out rocky economic times.”

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Houston's ranking on this global report improved 14 spots between now and last year. Photo via Getty Images

Houston tech ecosystem ranks as No. 5 in the world for emerging startup hubs

tech in texas

As a startup hub, Houston is movin’ on up.

In a new report from Startup Genome and the Global Entrepreneurship Network, Houston ranks fifth among the world’s top 100 emerging ecosystems for startups. Last year, the groups’ report put Houston at No. 19 in the same category.

Ahead of Houston on the list of the top emerging ecosystems for startups are first-ranked Detroit; second-ranked Hong Kong; third-ranked Dublin, Ireland; and fourth-ranked Minneapolis.

Further bolstering Houston’s status as a rising startup hub, Bayou City ranks third among the top North American challengers to traditional startup anchors like Silicon Valley, Boston, and Seattle. Joining Houston on the challengers’ list are first-ranked Detroit; second-ranked Minneapolis; third-ranked Research Triangle, North Carolina; and fifth-ranked Pittsburgh.

A recent report from Houston Exponential, which was recently acquired, emphasizes Houston’s position as the third fastest-growing tech ecosystem in the U.S. for early-stage startups. Houston sits behind Miami (No. 2) and Bridgeport-Stamford-Norwalk, Connecticut (No. 1).

Houston startups at all stages raised $2.34 billion in 2021, setting a record for the region’s annual VC haul, the HX report says. Of that total, early-stage startups collected $618.9 million in 46 deals.

Health and information technology startups dominate the VC landscape in Houston, with each accounting for 30 percent of VC deals in 2021, according to the HX report.

Elsewhere in Texas, Austin ranks 25th among the world’s top 100 ecosystems for startups, while Dallas ties for 31st place, according to the Startup Genome and Global Entrepreneurship Network report. San Antonio is wedged into the 91-to-100 range in the ranking of the world’s top 100 ecosystems.

“The importance and dispersal of tech startups have amplified the influence — for both good and ill — of geopolitics,” the report notes. “Where once the sector was sufficiently small to avoid the kind of pressures experienced by large industries such as energy and travel, those garage-spawned entrepreneurs have grown into a major economic force. Keeping their heads down is no longer an option.”

According to a new report, Houston is among the top emerging ecosystems. Photo by Zview/Getty Images

Houston rise in the ranks of the top emerging ecosystems in the world

stacking up

If you need evidence that Houston's startup ecosystem is flourishing, look no further than a new report from Startup Genome and the Global Entrepreneurship Network.

This year's Global Startup Ecosystem Report, released September 22, places Houston at No. 19 among the world's top 100 emerging startup ecosystems. Furthermore, it puts Houston at No. 4 among the top regional challengers in North America. Last year's report lumped Houston with other emerging startup ecosystems in the 31-to-40 ranking range.

Mumbai, India, appears at No. 1 among the world's top 100 emerging startup ecosystems this year, while Miami lands at No. 1 among the top regional challengers in North America.

According to Houston Exponential, the city's startup ecosystem "is experiencing a growth spurt that appears to show no signs of abating."

Case in point: Houston startups raised more than $1 billion in the first six months of 2021, surpassing all annual totals from previous years. In 2020, Houston startups reaped a record-high $753 million in venture capital.

"Venture capital invested in Houston startups has nearly quadrupled since 2016," according to a recent Houston Exponential report. "The sustained level of progress we've seen in startup formation and growth over the past four years shows that Houston has what it takes to build a vibrant, healthy innovation economy with an emphasis on equity."

Collectively, the health care and information technology sectors accounted for nearly 60 percent of Houston's VC deals in the first half of 2021, the report says.

Another sign of the expansion of Houston's startup ecosystem: the rising number of workspaces, incubators, and accelerators designed to foster startups.

"These key institutions create density and drive collisions among founders, investors, and talent, significantly increasing the rate of startup formation and growth," according to the Greater Houston Partnership.

Those institutions include The Ion entrepreneurial hub, the Greentown Labs climate-tech incubator, and the DivInc startup accelerator. All are new arrivals on the Houston startup scene.

"DivInc is about broadening the startup ecosystem by making it more authentically diverse, equitable, and inclusive of underrepresented entrepreneurs," Preston James II, CEO of DivInc, said in April. "When we, as a community, do this successfully, we optimize our opportunities for economic GDP growth, we can help reduce racial/gender wealth divide, and drive greater innovation."

Elsewhere in Texas, Austin ranks 20th among the leading startup ecosystems in the Global Startup Ecosystem Report, down from No. 19 last year, and Dallas repeats its 31st-place tie. Silicon Valley tops the global list.

The report says North America represents half of the top 30 ecosystems in the world.

"Entrepreneurs, policymakers, and community leaders in North America have been working hard to build inclusive innovation ecosystems that are engines of economic growth and job creation for all," JF Gauthier, founder and CEO of Startup Genome, says in a news release.

San Francisco-based Startup Genome is a research and advisory firm specializing in startup ecosystems.

A new hub on Rice University campus, Houston receives national rankings, and more local innovation news. Photo courtesy of Rice University

Shell commits to $10M carbon initiative with Rice University, Houston startup acquired by Honeywell, and more innovation news

Short Stories

Even toward the end of the year and amid the holiday season, Houston's innovation news can be a lot to keep up with. Here are seven short stories of Houston innovation — from an exit for a Houston startup and a multimillion-dollar clean energy commitment from Shell to new national recognitions for Houston and 2020 plans unveiled for MassChallenge in Houston.

Shell commits $10 million to new Carbon Hub at Rice University

Matteo Pasquali will lead the new hub at Rice University. Courtesy of Rice University

Rice University has introduced its Shell-backed Carbon Hub — a research initiative to innovate zero-emissions technologies. According to a news release, Shell has committed to a $10 million arrangement for the hub.

"Trying to address climate change is like playing whack-a-mole; you think you're making something better, and you realize that made something else get worse," says Carbon Hub director, Matteo Pasquali, in the release. "For example, you make cars more fuel efficient by removing weight, and then realize you've increased CO2 emissions by using more aluminum and carbon fibers. Or you try to fix CO2 into a useful product, and you realize you now need much more energy than you had gotten by making the CO2 in the first place."

The plan is to "fundamentally change how the world uses hydrocarbons," reads the release. Rather than burning hydrocarbons for fuel, creating carbon dioxide, the hydrocarbons "will be split to make clean-burning hydrogen fuel and solid carbon materials that can be used to make buildings, cars, clothing and more."

Through the partnership with Shell — and other potential partners — the hub will help fund and lead $100 million of science and engineering initiatives. The inaugural meeting for the hub is expected to be early next year and will be hosted by The Center for Energy Studies at Rice's Baker Institute for Public Policy.

"Providing energy to the world's population in an economically and environmentally sustainable manner is the global energy challenge," says Ken Medlock, senior director of the Center for Energy Studies, in the release. "In part, this will require new technologies and forward-looking, creative thinking, which is exactly what Carbon Hub offers."

Houston-based Rebellion Photonics acquired by Honeywell

Photo via rebellionphotonics.com

Innovative gas monitoring technology company, Rebellion Photonics, founded by Allison Sawyer and Robert Kester in Houston in 2009, has been acquired by Honeywell for an undisclosed amount.

The business will be rolled into Honeywell's Safety and Productivity Solutions business, as well as through Honeywell's Performance Materials and Technologies business, according to a press release.

"Honeywell is an amazing company and a recognized leader in our industry. We are excited to be part of their world-class family," Kester, who serves as CEO of Rebellion Photonics, says in the release. "Automated visual monitoring is the future of gas leak detection. Combining our products with Honeywell's platform will make this the new industry standard for safety and environmental monitoring globally."

MassChallenge to announce details of its second Houston cohort

Photo courtesy of MassChallenge

MassChallenge Texas has released new details of its second cohort in Houston. The zero equity startup accelerator based in downtown will run its second cohort from June to September of next year. Up to 100 startups will be selected for the Houston program, and another cohort of up to 100 startups will run along the same timeline in Austin.

On the line for prizes this year is six months of free office space, experts and mentors, the MassChallenge curriculum, access to top corporate leaders, as well as cash prizes and in-kind support — valued at over $500,000.

Both Austin and Houston will celebrate the launch of the two programs on January 29 — Houston's event will take place at the Four Seasons Hotel (1300 Lamar St.) from 5:30 to 7:30 pm.

MassChallenge recently announced its new home in The Cannon's Downtown Launch Pad in partnership with Amegy Bank.

Houston named in Inc.'s top 50 cities to start a business

Getty Images

Houston just made it onto the list of the top 50 cities to start a business, according to Surge Cities index, Inc., and Startup Genome. Coming in at No. 45, the Bayou City ranked behind Austin (No. 1) and Dallas (No. 29).

"Houston wants to be known as the Third Coast, a place that is both a business and cultural hub," the blurb on Inc. reads. "A place where people want to be. And this city, one of the most diverse in the country, is well on its way."

The report highlights Houston's historic hold on the oil and gas industry, the Texas Medical Center's established presence, and the space innovation happening at NASA. Roger Griesmeyer, a partner at Hunton Andrews Kurth, says in the article that Houston has low regulations and taxes coupled with "a highly educated populace, great weather, and a bunch of money."

"There's such diversity and a confluence of talent and opportunity in one place," says Griesmeyer in the article. "Houston is selling a lifestyle brand with all the resources to bear."

Houston was ranked highly on three factors:

No. 23 for job creation
No. 20 for wage growth
No. 25 for population growth

Accenture announces finalists for Houston-based competition

Courtesy of Accenture

In February, Accenture's Houston innovation hub will host the fourth annual Accenture HealthTech Innovation Challenge. Eleven companies have been named finalists and are headed to Houston in the new year.

"This annual HealthTech challenges creates an exciting opportunity to connect healthcare incumbents with emerging businesses to drive health system evolution focused on improving the lives of consumers and clinicians by enhancing access, affordability, quality and experience," says Brian Kalis, managing director of digital health and innovation services at Accenture, in the news release. "We are all looking forward to the final round and awards ceremony on February 6, 2020 in Houston when the finalists will present to an exclusive panel of healthcare executive judges."

No Texas companies were selected as finalists. The 11 selected startups are: New York-based Capital Rx, Minneapolis-based Carrot Health, San Francisco-based Cleo, Boston-based DynamiCare Health, San Francisco-based InsightRX, United Kingdom-based Lantum, Washington, D.C.-based Mira, Denver-based Orderly Health, New York City-based Paloma Health, St. Louis-based TCARE, and Seattle-based Xealth.

Houston area ranked the 18th best-paying city for software developers

Chart via heytutor.com

According to a new report from HeyTutor.com, the Houston-The Woodlands-Sugar Land metroplex is the 18th best-paying city for software developers. The report factored in salary and employment statistics for Houston and other U.S. metropolitan areas using data from the U.S. Bureau of Labor Statistics Occupational Employment Statistics.

Houston's mean adjusted software developer salary is $107,672 annually, according to the report. Here are some other interesting statistics regarding the Houston area from the data:

Mean software developer salary (adjusted): $107,672
Mean software developer salary (unadjusted): $109,503 — compared to $109,914 nationally
Mean salary across all occupations (unadjusted): $54,290 — compared to $51,960 nationally
Number of software developer jobs: 20,400 — compared to $51,960 nationally
Median home price: $205,600 — compared to $226,800 nationally

Business idea competition calls for applications

Photo courtesy of LILIE

The Liu Idea Lab for Innovation and Entrepreneurship has announced the applications for the 2020 H. Albert Napier Rice Launch Challenge business idea competition, which will take place on March 25. On the line is $60,000 in prize money to the teams, and the applications are open to Rice-affiliated teams until 11:59 pm on January 20.

To apply, click here.

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Meet 6 mentors who are helping the Houston startup scene flourish

meet the finalists

Few founders launch successful startups alone — experienced and insightful mentors often play an integral role in helping the business and its founders thrive.

The Houston startup community is home to many mentors who are willing to lend an ear and share advice to help entrepreneurs meet their goals.

The Mentor of the Year category in our 2025 Houston Innovation Awards will honor an individual like this, who dedicates their time and expertise to guide and support budding entrepreneurs. The award is presented by Houston City College Northwest.

Below, meet the six finalists for the 2025 award. They support promising startups in the medical tech, digital health, clean energy and hardware sectors.

Then, join us at the Houston Innovation Awards this Thursday, Nov. 13 at Greentown Labs, when the winner will be unveiled. The event is just days away, so secure your seats now.

Anil Shetty, InformAI

Anil Shetty serves as president and chief medical officer for biotech company Ferronova and chief innovation officer for InformAI. He's mentored numerous medical device and digital health companies at seed or Series A, including Pathex, Neurostasis, Vivifi Medical and many others. He mentors through organizations like Capital Factory, TMC Biodesign, UT Venture Mentoring, UTMB Innovation and Rice's Global Medical Innovation program.

"Being a mentor means empowering early-stage innovators to shape, test, and refine their ideas with clarity and purpose," Shetty says. "I’m driven by the opportunity to help them think strategically and pivot early before resources are wasted. At this critical stage, most founders lack the financial means to bring on seasoned experts and often haven’t yet gained real-world exposure. Mentorship allows me to fill that gap, offering guidance that accelerates their learning curve and increases the chances of meaningful, sustainable impact."

Jason Ethier, EnergyTech Nexus

Jason Ethier is the founding partner of EnergyTech Nexus, through which he has mentored numerous startups and Innovation Awards finalists, including Geokiln, Energy AI Solutions, Capwell Services and Corrolytics. He founded Dynamo Micropower in 2011 and served as its president and CEO. He later co-founded Greentown Labs in Massachusetts and helped bring the accelerator to Houston.

"Being a mentor means using my experience to help founders see a clearer path to success. I’ve spent years navigating the ups and downs of building companies, struggling with cash flow, and making all the mistakes; mentoring gives me the chance to share those lessons and show entrepreneurs the shortcuts I wish I’d known earlier," Ethier says. "At Energytech Nexus, that role goes beyond just helping individual founders — it’s about creating a flywheel effect for Houston’s entire innovation ecosystem."

Jeremy Pitts, Activate Houston

Jeremy Pitts serves as managing director of Activate Houston, which launched in Houston last year. He was one of the founders of Greentown Labs in the Boston area and served in a leadership role for the organization between 2011 and 2015. Through Activate, he has mentored numerous impactful startups and Innovation Awards finalists, including Solidec, Coflux Purification, Bairitone Health, Newfound Materials, Deep Anchor Solutions and others.

"Being a mentor to me is very much about supporting the person in whatever they need. Oftentimes that means supporting the business—providing guidance and advice, feedback, introductions, etc," But just as important is recognizing the person and helping them with whatever challenges they are going through ... Sometimes they need a hype man to tell them how awesome they are and that they can go do whatever hard thing they need to do. Sometimes they just need an empathetic listener who can relate to how hard these things are. Being there for the person and supporting them on their journey is key to my mentorship style."

Joe Alapat, Liongard

Joe Alapat founded and serves as chief strategy officer at Houston software company Liongard and chief information officer at Empact IT, which he also owns. He mentors through Founder Fridays Houston Group, Software Day by Mercury Fund, SUPERGirls SHINE Foundation, Cup of Joey and at the Ion. He's worked with founders of FlowCare, STEAM OnDemand, Lokum and many other early stage startups.

"Being a mentor to me means unleashing an individual’s 10x—their purpose, their ikigai (a Japanese concept that speaks to a person’s reason for being)," Alapat says. "Mentoring founders in the Houston community of early stage, high-growth startups is an honor for me. I get to live vicariously through a founder’s vision of the future. Once they show me that compelling vision, I’m drawn to bring the future forward with them so the vision becomes reality with a sense of urgency."

Neal Dikeman, Energy Transition Ventures

Neal Dikeman serves as partner at early stage venture fund Energy Transition Ventures, executive in residence at Greentown Labs, and offices in and supports Rice Nexus at the Ion. He mentors startups, like Geokiln, personally. He also mentored Helix Earth through Greentown Labs. The company went on to win in the Smart Cities, Transportation & Sustainability contest at SXSW earlier this year. Dikeman has helped launch several successful startups himself, most recently serving on the board of directors for Resilient Power Systems, which was acquired by Eaton Corp for $150 million.

"Founders have to find their own path, and most founders need a safe space where they can discuss hard truths outside of being 'on' in sales mode with their team or board or investors, to let them be able to work on their business, not just in it," Dikeman says.

Nisha Desai, Intention

Nisha Desai serves as CEO of investment firm Intention and mentors through Greentown Labs, TEX-E, Open Minds, the Rice Alliance Clean Energy Accelerator, Avatar Innovations and The Greenhouse. She currently works with founders from Solidec, Deep Anchor Solutions, CLS Wind and several other local startups, several of which have been nominated for Innovation Awards this year. She's served a board member for Greentown Labs since 2021.

"When I first started mentoring, I viewed my role as someone who was supposed to prevent the founder from making bad decisions. Now, I see my role as a mentor as enabling the founder to develop their own decision-making capability," Desai says. "Sometimes that means giving them the space to make decisions that might be good, that might be bad, but that they can be accountable for. At the end of the day, being a mentor is like being granted a place on the founder's leadership development journey, and it's a privilege I'm grateful for."

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The Houston Innovation Awards program is sponsored by Houston City College Northwest, Houston Powder Coaters, FLIGHT by Yuengling, and more to be announced soon. For sponsorship opportunities, please contact sales@innovationmap.com.

Rice, Houston Methodist developing soft 'sleep cap' for brain health research

Researchers and scientists at Rice University and Houston Methodist are developing a “sleep cap” that aims to protect the brain against dementia and other similar diseases by measuring and improving deep sleep.

The project is a collaboration between Rice University engineering professors Daniel Preston, Vanessa Sanchez and Behnaam Aazhang; and Houston Methodist neurologist Dr. Timea Hodics and Dr. Gavin Britz, director of the Houston Methodist Neurological Institute and chairman of the Department of Neurosurgery.

According to Rice, deep sleep is essential for clearing waste products from the brain and nightly “cleaning cycles” help remove toxic proteins. These toxic proteins, like amyloids, can accumulate during the day and are linked to Alzheimer’s disease and other neurological issues.

Aazhang, director of the Rice Neuroengineering Initiative, and his team are building a system that not only tracks the brain’s clearing process but can also stimulate it, improving natural mechanisms that protect against neurodegeneration.

Earlier proof-of-concept versions of the caps successfully demonstrated the promise of this approach; however, they were rigid and uncomfortable for sleep.

Preston and Sanchez will work to transform the design of the cap into a soft, lightweight, textile-based version to make sleep easier, while also allowing the caps to be customizable and tailored for each patient.

“One of the areas of expertise we have here at Rice is designing wearable devices from soft and flexible materials,” Preston, an assistant professor of mechanical engineering, said in a news release. “We’ve already shown this concept works in rigid device prototypes. Now we’re building a soft, breathable cap that people can comfortably wear while they sleep.”

Additionally, the research team is pursuing ways to adapt their technology to measure neuroinflammation and stimulate the brain’s natural plasticity. Neuroinflammation, or swelling in the brain, can be caused by injury, stroke, disease or lifestyle factors and is increasingly recognized as a driver of neurodegeneration, according to Rice.

“Our brain has an incredible ability to rewire itself,” Aazhang added in the release. “If we can harness that through technology, we can open new doors for treating not just dementia but also traumatic brain injury, stroke, Parkinson’s disease and more.”

The project represents Rice’s broader commitment to brain health research and its support for the Dementia Prevention Research Institute of Texas (DPRIT), which passed voter approval last week. The university also recently launched its Rice Brain Institute.

As part of the project, Houston Methodist will provide access to clinicians and patients for early trials, which include studies on patients who have suffered traumatic brain injury and stroke.

“We have entered an era in neuroscience that will result in transformational cures in diseases of the brain and spinal cord,” Britz said in the release. “DPRIT could make Texas the hub of these discoveries.”

Autonomous truck company with Houston routes goes public

on a roll

Kodiak Robotics, a provider of AI-powered autonomous vehicle technology, has gone public through a SPAC merger and has rebranded as Kodiak AI. The company operates trucking routes to and from Houston, which has served as a launchpad for the business.

Privately held Kodiak, founded in 2018, merged with a special purpose acquisition company — publicly held Ares Acquisition Corp. II — to form Kodiak AI, whose stock now trades on the Nasdaq market.

In September, Mountain View, California-based Kodiak and New York City-based Ares disclosed a $145 million PIPE (private investment in public equity) investment from institutional investors to support the business combo. Since announcing the SPAC deal, more than $220 million has been raised for the new Kodiak.

“We believe these additional investments underscore our investors’ confidence in the value proposition of Kodiak’s safe and commercially deployed autonomous technology,” Don Burnette, founder and CEO of Kodiak, said in a news release.

“We look forward to leading the advancement of the commercial trucking and public sector industries,” he added, “and delivering on the exciting value creation opportunities ahead to the benefit of customers and shareholders.”

Last December, Kodiak debuted a facility near George Bush Intercontinental/Houston Airport for loading and loading driverless trucks. Transportation and logistics company Ryder operates the “truckport” for Ryder.

The facility serves freight routes to and from Houston, Dallas and Oklahoma City. Kodiak’s trucks currently operate with or without drivers. Kodiak’s inaugural route launched in 2024 between Houston and Dallas.

One of the companies using Kodiak’s technology is Austin-based Atlas Energy Solutions, which owns and operates four driverless trucks equipped with Kodiak’s driver-as-a-service technology. The trucks pick up fracking sand from Atlas’ Dune Express, a 42-mile conveyor system that carries sand from Atlas’ mine to sites near customers’ oil wells in the Permian Basin.

Altogether, Atlas has ordered 100 trucks that will run on Kodiak’s autonomous technology in an effort to automate Atlas’ supply chain.

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